The IQPF and FP Canada release the 2023 Projection Assumption Guidelines

Date : 28 April 2023

Montréal and Toronto – The Institut québécois de planification financière (the Institute) and FP Canada have jointly released the 2023 Projection Assumption Guidelines and Addendum, for financial planners across Canada. The new guidelines take effect April 30, 2023.

According to Chantal Lamoureux, LL.B., CPHR, President and CEO of the Institute, "In a context where inflation is currently high in Quebec, it is important to remember the importance of the Projection Assumption Guidelines: they allow financial planners to make financial plans knowing that their projections are based on solid assumptions. Reviewed by industry experts each year, the Guidelines are used in the development of simulations, and can therefore help clients achieve their medium and long-term goals."

Launched by the Institute in 2008, the Projection Assumption Guidelines became pan-Canadian in 2015, when the Financial Planning Standards Council (now FP Canada) joined the Institute in developing the tool. The document contains estimates of the inflation rate, the borrowing rate, the yearly maximum pensionable earnings (YMPE) growth rate, life expectancy, and returns on five types of investments: short-term securities, fixed income securities, Canadian equities, foreign developed-market equities, and emerging-market equities. The Guidelines should be used for long-term projections (10 years or more). For shorter term financial projections, financial planners can use real rates of return on fixed term investments held to maturity and dividend yields on equities.

The Projection Assumption Guidelines are developed and maintained by a committee of five financial planners (individuals who hold the F.Pl. in Quebec or CFP® certification in the rest of Canada) who are also actuaries or hold the CFA designation. The two members of the Committee who hold the F.Pl. designation are Nathalie Bachand and Martin Dupras, both of whom are IQPF Fellows. The Projection Assumption Guidelines Committee is overlooked by the Standards Panel, an independent group comprised of financial planners (F.Pl. or CFP®) and a member of the public.

The Projection Assumption Guidelines for 2023 are as follows:

Inflation rate: 2.10%

Return rates (nominal rates)

Short-term: 2.30%
Fixed-income: 3.20%
Canadian equities: 6.20%
Foreign developed market equities: 6.50%
Emerging market equities: 7.40%

Borrowing rate: 4.30%

YMPE or MPE growth rate: 3.10%

After a long period of stable and relatively low inflation, global economies continue to experience high inflation. The Addendum that accompanies the Projection Assumption Guidelines includes a chart showing the Consumer Price Index (CPI) from 1997 to 2022, which provides context and perspective to recent increases in the inflation rate. Inflation can show sharper movements over certain short periods. However, we find that higher levels of inflation are not sustained over the long term. In December 2022, the CPI averaged 3.03% over the last five years and 2.21% over the last ten years. The inflation guideline of 2.1% in the Projection Assumption Guidelines, up 0.1%, is a sign that over the long term, inflation will be lower than it has been over the past two years.

This year, the Addendum also includes a chart outlining the PAG results from 2009 and how they’ve tracked compared to real rates of return over the years. “When looking at the actual rates from January 2009 to January 2023, the PAG rates are within the same range, which speaks to the reliability and validity of the PAG projections,” says Derek Dedman, CFP®, M.Sc., CFA, and Chair of the Projection Assumption Guidelines Committee.

Since 2017, the Guidelines are accompanied by an Addendum. This supplemental document provides the data sources on which the Projection Assumption Guidelines are based, as well as the calculations for the inflation and rate of return standards. The Addendum allows financial planners to fully understand the calculations and reproduce them for their own purposes.

About the Institute

For over 30 years, the Institut québécois de planification financière has been a pillar of financial planning in Quebec. It has established itself on the North American scene by setting the highest standards. The Institute has made the financial planner the expert sought after by all consumers concerned about preserving and increasing their wealth.

As a leader in developing and promoting personal financial planning, the Institute's mission is to ensure that today’s and tomorrow’s financial services professionals have the knowledge, the know-how and the social skills required to contribute to the financial well-being of people, families and communities. For more information, visit iqpf.org.

About FP Canada

Established in 1995, FP Canada is a national not-for-profit education, certification and professional oversight organization working in the public interest. FP Canada is dedicated to championing better financial wellness for all Canadians by leading the advancement of professional financial planning in Canada. Visit the FP Canada website for more information.


Luc Landry,
Vice-president, communications and marketing
Institut québécois de planification financière
514-767-4040 or 1-800-640-4050, ext. 237

Liette Pitre,
Communications coordinator
Institut québécois de planification financière
514-767-4040 or 1-800-640-4050, ext. 235