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Second, and contrary to a normal taxable RRSP withdrawal, withdrawals under the HBP and LLP schemes do not lead to a loss of contribution room. So there would no implicit penalty for making use of temporary withdrawal.

We already have the HBP and LLP so the bureaucratic machinery exists for the immediate implementation of a similar scheme for crisis financial relief — let’s call it the Financial Relief Plan (FRP). Many arrangements are possible. For example, the FRP could be available for the next six months; withdrawals could be limited to $20,000; and tax repayments could extend over a maximum of 10 years. But many other combinations are possible.

Unlike the HBP and LLP, participation should not be restricted. Someone who does not personally need an FRP withdrawal may still want to help a family member in need. Or even if the withdrawal supports the purchase of a big-ticket item, such as a car or home renovations, that would stimulate the economy at what may be a critical time.

One way or another the government will get its money, either when Canadians have to pay taxes on money they fail to recontribute or, after they have recontributed, they eventually come to withdraw their money for retirement. With interest rates so low, the cost to the government of what amounts simply to a delay in tax payments would be negligible.

The COVID-19 crisis is affecting families in many different ways. Government support programs cannot respond to every circumstance. The FRP could assist Canadians who need immediate financial help to help themselves or, if they wished, to help others. And it could provide a small boost to the economy just when it will be most needed.

Alexandre Laurin is director of research at the C.D. Howe Institute. Nick Pantaleo, a retired executive and tax specialist, is currently executive in residence at the University of Waterloo’s School of Accounting and Finance.