Update October 14 / 2004: We now have an official press release for Financial Editors: Canada Deposit Insurance Corporation (CDIC) protection seriously eroded by inflation.

Deposit insurance, for banks and trust companies, based on its current coverage limit is not providing enough value for depositors. Most people who purchase GIC type investments are aware that the maximum basic protection for eligible deposits covered by Canada Deposit Insurance Corporation (CDIC) is $60,000 per depositor per member institution. What they might not be aware of however is that this $60,000 limit was brought into place in 1983… Over 20 years ago. The limit prior to that time was $20,000. During the past 21 years inflation has decreased the buying power of a dollar by about 56% based on changes in the consumer price index. Inflation has also reduced the value of CDIC coverage by this same percentage. The $60,000 coverage limit of 1983 is now worth about $34,000 in today's dollars.

The eroded value of CDIC insurance has forced some depositors to use multiple registrations, such as adding other family member's names to some of their 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. A larger more practical limit for CDIC insurance would reduce the need to use such alternatives.

Many provinces have realized the need for higher coverage limits for provincially insured deposits, such as those purchased from credit unions, and have much higher limits than CDIC. For example, the provincial deposit insurance limit is $100,000 in Ontario, $250,000 in Nova Scotia and unlimited in Alberta. If the provinces can provide a higher limit for their credit unions why can't the federal government bring its coverage for banks and trust companies in line with current needs?

We at Fiscal Agents feel that CDIC coverage should be increased to $100,000, at a minimum. This probably won't happen anytime soon however without a lobbying effort on the part of the public. We are therefore recommending that all concerned either write directly to CDIC or complete one of our pre-printed form letters available via the links below, forwarding it to our offices which we will submit in bulk to the CDIC. The respective addresses are as follows:

Below are links to the pre-printed letters we have made available suitable for mailing or sending via fax (in Adobe PDF format):

• Petition Letter to the CDIC re: Raise of deposit insurance limit to $100,000
• Petition Letter to the CDIC re: Raise of deposit insurance limit to $100,000
  (c/o Fiscal Agents)

For any questions that you may have about current CDIC policies please contact them directly at 1-800-461-2342. You can also contact our office at 905-844-7700 if you have any questions about deposit insurance coverage on your existing investments.

Summary of Canadian Deposit Insurance Agencies
To review each deposit insurer use the links provided.

List prepared by Fiscalagents.com Sept 2004

CDIC have a Deposit insurance calculator that will guide you through a series of questions about the deposits for which you wish to calculate deposit insurance coverage. This process should take approximately 10 to 15 minutes. The calculator will then produce a report showing your deposit insurance coverage based on the information you provide.