On October 18, 2023, the Government of Québec enacted a regulation amending the Regulation respecting savings products under the Financial Administration Act (chapter A-6.001). This amendment updates the framework surrounding various savings accounts, specifically introducing new terms and conditions for managing financial instruments like the Tax-Free First Home Savings Account (FHSA). The authority to make these amendments comes from section 73 of the Financial Administration Act, which allows the government to define key operational characteristics of a book-based system for savings products, as well as establish ownership and evidentiary rules associated with it. Additionally, the regulation enables the government to stipulate terms for the assignment, transfer, and payment of securities.

One of the key changes introduced is the inclusion of the FHSA, which is now explicitly mentioned in section 5 of the Regulation. This expansion allows individuals saving for their first home to benefit from tax-free growth, enhancing their capacity to accumulate funds for this significant life milestone.

Furthermore, paragraph 3 of section 5 has been revised to more clearly define the term “registered plan,” encompassing various types of accounts, including retirement savings accounts, education savings accounts, and disability savings accounts. These accounts must be held by a trustee in the participant’s name and offered by Épargne Placements Québec. The amendments in section 37 also aim to provide clarity and flexibility regarding transfers between accounts. Notably, the wording has been changed from “registered retirement savings account” to “account relating to a Registered Retirement Savings Plan,” aligning it more closely with established financial terminology. The regulation now allows for transfers from a FHSA to other registered accounts, such as Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs).

The regulation explicitly permits transfers from a Registered Retirement Savings Plan to a FHSA and vice versa, creating a more fluid relationship between these account types. This flexibility encourages individuals to manage their savings more effectively, optimizing tax benefits and adapting to changing financial circumstances.

The amendments to the Regulation respecting savings products is intended to advance financial products available to Quebec residents. By introducing the FHSA and clarifying the terms related to various registered accounts, the government is promoting savings behavior that can lead to increased home ownership. This regulatory update reflects a broader trend toward accommodating the financial needs of individuals, particularly first-time home buyers, within a changing economic landscape. Overall, the regulation aims to provide a supportive framework that encourages responsible saving and investment in the province.

Quebec (MO 1528-2023) November 4, 2023