Thank you, Mr. Chairman.
If the amendment is adopted, there will be no need for us to deal with Mr. McKay's amendment, because it involves a partial withdrawal.
In fact, we've already stated that we supported the principle of the bill which calls for making contributions to RESPs tax deductible, as is the case with RRSP contributions. However, we find the $18,000 limit provided for in the bill to be much too high. We also feel that the provision that would allow unused deductions to be accumulated is far too advantageous and that it would apply solely be the most wealthy individuals.
Aside from the amount the government contributes to a RESP—if memory serves me well, it contributes 20%—the only advantage compared to a conventional RRSP is the increase in the contribution limit.
For example, when a person contributes up to $4,000 in a RESP, the government contributes an additional 20% to the plan. That's quite interesting. Aside from that, the only reason to increase contributions would be if one had already contributed the maximum amount to one's RRSP. Therefore, most members of the middle class and lower income earners will not be able to take advantage of this new provision.
The purpose of the amendment is twofold. First, it would set the maximum deduction at $4,000 for 2005, and at $5,000 for 2006. For 2007 and every year thereafter, it would be indexed to the cost of living. The second amendment to the bill as it is now worded would eliminate the possibility for taxpayers to accumulate unused contributions, which seems irrelevant. If a person waits until his child is ready for post-secondary studies, it's already too late to invest in his RESP.