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Oakville, October 14, 2004
David Newman, Registered Deposit Broker

Canada Deposit Insurance Corporation (CDIC) protection seriously eroded by inflation.

Attention: Personal Finance Editors

Canada Deposit Insurance Corporation (CDIC) protection seriously eroded by inflation, petition launches campaign calling for CDIC reform

OAKVILLE, ONT. - The banking protection offered Canadians by the Canada Deposit Insurance Corporation (CDIC) has been seriously eroded over time due to inflation, to the point where the program has fallen way behind other deposit-insurance plans.

So says David Newman, Director, Information Services of Oakville, Ont.-based Fiscal Agents, and to press his case, Fiscal Agents has launched a campaign for reform of the 30-year-old CDIC program.

Fiscal Agents, a deposit broker and financial-planning and -information house that was founded in 1977, has prepared a form letter accessible on its website and is encouraging Canadian investors to send a copy of the letter to the CDIC, demanding changes.

And at the same time, Newman has initiated a public-awareness campaign aimed at waking up Canadians to the fact of the inadequate CDIC protection.

The CDIC insures eligible deposits at member institutions and reimburses depositors for the amount of their insured deposits when a member institution fails. But its threshold level of protection, $60,000, was instituted 21 years ago, in 1983. Since that time, inflation has decreased the buying power of that protection by 56 per cent, based on changes in the Consumer Price Index. Inflation has decreased the buying power of CDIC coverage by the same amount.

Says Newman, "After the financial debacles of the seventies, the CDIC's coverage was increased from $20,000 to its current $60,000, but inflation has eaten away about half the value of the coverage. What this mean is that the $60,000 is around $34,000 in today's dollars.

"Compare this with today's alternatives," says Newman. "If your deposits are insured in a credit union in Ontario, your insurance coverage is $100,000. In Nova Scotia it's a whopping $250,000. In some Western Canadian jurisdictions, credit-union investments are guaranteed for every penny - 100-per-cent coverage."

Newman also points to other investment programs that offer far greater protection than the CDIC does.

"If you have investments with a insurance company, the same $60,000 is at play," he says. "However, if you're receiving income from an annuitized investment, that income could be insured to a maximum of $2,000 per month to a total of $200,000. Beyond that, an 85-per-cent coverage rule applies."

Says Newman, "Many financial planners preparing advice for clients seeking protection for their securities are now recommending alternate investment schemes that take advantage of the vastly better insurance protection offered by other plans."

Newman argues that many Canadians are complacent and ignorant about CDIC coverage, and uses a recent consumer survey by the institution itself to make a point.

"Canadians vaguely believe that their bank and other deposits are adequately protected by the CDIC," says Newman. "But this sense of security is misplaced.

"Sixty per cent of Canadians are clueless about what products the CDIC insures, and a greater number are unaware that the value of coverage has been severely eroded by inflation. What's also astounding is that 92 percent of respondents in the CDIC's public-opinion survey early this year said the most important factor when making an investment was protecting their savings.

"The point we are making is that the CDIC no longer adequately protects their savings."

Newman comments:

"The inadequacy of CDIC protection has prompted investors to attempt to circumvent the rules through multiple registrations: me and my wife, even, believe it or not, me, my wife and the dog. But such creativity won't get you too far. CDIC rules are explicit in saying that if the investment is not registered properly, you're out of luck. So if the bank or trust fails, your cash has gone the same way - down the drain." Moreover, some depositors while using multiple registrations, such as adding other family member's names to some of their GIC type investments, in order to keep all of their deposits insured. This practice might insure a deposit but it also results in a sharing of ownership, which may not be in the best interest of the original owner.

"Recently, we've seen bank and trust mergers swallow otherwise independent issues under one corporate brand. The re-investor increasingly has less choice, often relying on the larger institution's reputation to provide comfort in the form of the guarantee."

"It should be noted the CDIC does not guarantee your investment, nor does any other federal government agency. The CDIC provides insurance coverage for your money only if the institution's doors don't open tomorrow."

"If the CDIC is to regain its relevance, it needs to bring its insurance coverage into the 21st century by increasing its coverage to $100,000. But this isn't likely to happen unless savers start making a stink. We need to put pressure on CDIC to increase the value of deposit coverage to a satisfactory level and also ensure indexation for inflation."

The Fiscal Agents CDIC reform campaign was launched in its September Money Management Newsletter, available online at The petition recommends sending letters to Jean Pierre Sabourin, President and CEO of the CDIC. The form letter can be found at:


For more information contact David Newman at 905-844-7700.



About Fiscal Agents:

Since 1977, Fiscal Agents Financial Services Group has grown considerably, combining the services of both Mutual Fund Dealer and Limited Market Dealership with the expertise of a Deposit Broker and the understanding of a Life Insurance Agency.

Fiscal Agents' advisors are uniquely qualified to provide investment advisory services on guaranteed accounts, retirement income planning, investment funds and life insurance. They specialize in recommending products best suited to you and your family as well as to investment groups and individuals who manage trusts, estates, charities, organizations and religious organizations.

Fiscal Agents represents a large majority of Canadian financial institutions including Chartered Banks, Trust and Loan and Life Insurance and Investment Management firms.

From the backdrop of being one of Canada's foremost financial research houses, Fiscal Agents Financial Information Services publish The Fiscal Reports, a set of 12 annual financial services product studies. Our most public investment tools are the retail interest rates tables that we supply to Canada's national and regional newspapers including The National Post, Toronto Star, and Sun Media Group. Our seasonal specialty studies have included the Globe and Mail and included in the Globes' Personal Finance Library book entitled RRSPs 2000, authored by Steve Kelman.

More recently Fiscal Agents has become a major electronic presence with on-line and web site publishing via webfin section on, Canada largest web site with over 10 million page views per month. Fiscal Agents has been involved with other sites including and both interrelated and providing an Internet presence for Canada's largest newspaper group, Canwest Inc. Another unique site is, the joint effort of Bell Canada and Microsoft Internet sites. Fiscal Agents are providing Canada largest newspaper the Toronto Star's web site with specialized consumer reports on such items as Drug dispensing fees, travel insurance fees and deposit interest rate surveys. Newer web based services also include financial calculators and worksheets Fiscal Agents has also been responsible for the creation of a professional advisors information resource service, that is provided to the financial industry via

Millions of investors have access to our rate tables, using them to make informed decisions and purchases of Guaranteed Investment Certificates (GICs) , Registered Retirement Savings Plans (RRSPs) and Retirement Income Funds (RIFs). However, only Fiscal Agents clients have the extra advantage of using our no-fee placement service. To find out more about how it works, call (905) 844-7700 (local), (416) 447-7945 (Toronto) or toll free 1-800-663-5463 (Ontario only). As you can see from our daily rate bulletin, we continually offer the interest rates from the best of the best.

Fiscal Agents is an independent company without ties to any financial institution, the sole objective of Fiscal Agents and its investment advisors is to provide unbiased investment services. We offer the widest choice of investment services and instruments from both financial institutions and Investment Managers in a highly personalized manner.

Note For internet links to the aforementioned web sites click here:

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