An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act (S.C. 2016, c. 14)

• Published date: 16 March 2017
• Date: 15 December 2016
• Section: Part III - Acts of Parliament
• Gazette Issue: 2 - [object Object]

S.C. 2016, c. 14

Assented to 2016-12-15

An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act

RECOMMENDATION

His Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled “An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act”.

SUMMARY

Part 1 of this enactment amends the Canada Pension Plan to, among other things,

• (a) increase the amount of the retirement pension, as well as the survivor’s and disability pensions and the post-retirement benefit, subject to the amount of additional contributions made and the number of years over which those contributions are made;

• (b) increase the maximum level of pensionable earnings by 14% as of 2025;

• (c) provide for the making of additional contributions, beginning in 2019;

• (d) provide for the creation of the Additional Canada Pension Plan Account and the accounting of funds in relation to it; and

• (e) include the additional contributions and increased benefits in the financial review provisions of the Act and authorize the Governor in Council to make regulations in relation to those provisions.

This Part also amends the Canada Pension Plan Investment Board Act to provide for the transfer of funds between the Investment Board and the Additional Canada Pension Plan Account and to provide for the preparation of financial statements in relation to amounts managed by the Investment Board in relation to the additional contributions and increased benefits.

Part 2 makes related amendments to the Income Tax Act to increase the Working Income Tax Benefit and to provide a deduction for additional employee contributions.

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

PART 1Amendments to the Canada Pension Plan and the Canada Pension Plan Investment Board Act R.S., c. C-8Canada Pension Plan

Marginal note:R.S., c. 30 (2nd Supp.), s. 1(3)

• 1 (1) The definitions contribution rate, salary and wages on which a contribution has been made, total pensionable earnings of a contributor attributable to contributions made under this Act and unadjusted pensionable earnings in subsection 2(1) of the Canada Pension Plan are replaced by the following:

  contribution rate

  contribution rate, in respect of an employee, an employer and a self-employed person for a year, means the contribution rate for that employee, employer and self-employed person for the year determined in accordance with section 11.1; (taux de cotisation)

  salary and wages on which a base contribution has been made

  salary and wages on which a base contribution has been made for a year means an amount calculated in accordance with section 15; (traitement et salaire sur lesquels a été versée une cotisation de base)

  total pensionable earnings of a contributor attributable to base contributions made under this Act

  total pensionable earnings of a contributor attributable to base contributions made under this Act means an amount calculated in accordance with section 78; (total des gains d’un cotisant ouvrant droit à pension, afférents à des cotisations de base versées selon la présente loi)

  unadjusted pensionable earnings

  unadjusted pensionable earnings means base unadjusted pensionable earnings, first additional unadjusted pensionable earnings and second additional unadjusted pensionable earnings; (gains non ajustés ouvrant droit à pension)

• (2) Subsection 2(1) of the Act is amended by adding the following in alphabetical order:

  additional maximum pensionable earnings

  additional maximum pensionable earnings of a person for a year has the meaning assigned by section 17.1; (maximum supplémentaire des gains ouvrant droit à pension)

  base contribution

  base contribution means a contribution under subsection 8(1), 9(1) or 10(1); (cotisation de base)

  base unadjusted pensionable earnings

  base unadjusted pensionable earnings of a contributor for a year means an amount calculated in accordance with section 53; (gains non ajustés de base ouvrant droit à pension)

  first additional contribution

  first additional contribution means a contribution under subsection 8(1.1), 9(1.1) or 10(1.1); (première cotisation supplémentaire)

  first additional contribution rate

  first additional contribution rate, in respect of an employee, an employer and a self-employed person for a year, means the first additional contribution rate for that employee, employer and self-employed person for the year determined in accordance with section 11.2; (premier taux de cotisation supplémentaire)

  first additional contributory period

  first additional contributory period of a contributor has the meaning assigned by section 49.1; (première période cotisable supplémentaire)

  first additional monthly pensionable earnings

  first additional monthly pensionable earnings of a person means an amount calculated in accordance with section 48.1; (premiers gains mensuels supplémentaires ouvrant droit à pension)

  first additional unadjusted pensionable earnings

  first additional unadjusted pensionable earnings of a contributor for a year means an amount calculated in accordance with section 53.1; (premiers gains non ajustés supplémentaires ouvrant droit à pension)

  salary and wages on which a first additional contribution has been made

  salary and wages on which a first additional contribution has been made for a year means an amount calculated in accordance with section 15.1; (traitement et salaire sur lesquels a été versée une première cotisation supplémentaire)

  salary and wages on which a second additional contribution has been made

  salary and wages on which a second additional contribution has been made for a year means an amount calculated in accordance with section 15.2; (traitement et salaire sur lesquels a été versée une deuxième cotisation supplémentaire)

  second additional contribution

  second additional contribution means a contribution under subsection 8(1.2), 9(1.2) or 10(1.2); (deuxième cotisation supplémentaire)

  second additional contribution rate

  second additional contribution rate, in respect of an employee, an employer and a self-employed person for a year, means the second additional contribution rate for that employee, employer and self-employed person for the year determined in accordance with section 11.2; (deuxième taux de cotisation supplémentaire)

  second additional contributory period

  second additional contributory period of a contributor has the meaning assigned by section 49.2; (deuxième période cotisable supplémentaire)

  second additional monthly pensionable earnings

  second additional monthly pensionable earnings of a person means an amount calculated in accordance with section 48.2; (deuxièmes gains mensuels supplémentaires ouvrant droit à pension)

  second additional unadjusted pensionable earnings

  second additional unadjusted pensionable earnings of a contributor for a year means an amount calculated in accordance with section 53.2; (deuxièmes gains non ajustés supplémentaires ouvrant droit à pension)

  total first additional pensionable earnings

  total first additional pensionable earnings of a contributor means an amount calculated in accordance with section 50.1; (total des premiers gains supplémentaires ouvrant droit à pension)

  total second additional pensionable earnings

  total second additional pensionable earnings of a contributor means an amount calculated in accordance with section 50.2; (total des deuxièmes gains supplémentaires ouvrant droit à pension)

  Year’s Additional Maximum Pensionable Earnings

  Year’s Additional Maximum Pensionable Earnings has the meaning assigned by section 18.1; (maximum supplémentaire des gains annuels ouvrant droit à pension)

• Marginal note:2009, c. 31, s. 25

  (3) The portion of subsection 2(2) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:When specified age deemed to be reached

    (2) For the purposes of any provision of this Act in which reference is made to the reaching by a person of a specified age — other than a reference in paragraph 13(1)(c) or (e) or (1.2)(c), 17(c), 17.1(c), 19(c) or (d) or 44(3)(a), section 70 or paragraph 72(1)(c) — the person is deemed to have reached the specified age at the beginning of the month following the month in which the person actually reached that age, and in computing

2 Paragraph 6(2)(h) of the Act is replaced by the following:

• (h) employment in Canada by an employer who employs persons in Canada but under the terms of a reciprocal agreement between the Government of Canada and the government of another country is exempt from liability to make the contributions imposed on an employer by this Act;

Marginal note:2011, c. 24, s. 173

• 3 (1) The portion of subsection 8(1) of the Act before paragraph (a) is replaced by the following:

  Marginal note:Employee’s base contribution

  • 8 (1) Every employee who is employed by an employer in pensionable employment shall, by deduction as provided in this Act from the remuneration in respect of the pensionable employment paid to the employee by the employer, make an employee’s base contribution for the year in which the remuneration is paid to the employee of an amount equal to the product obtained when the contribution rate for employees for the year is multiplied by the lesser of

• Marginal note:1997, c. 40, s. 58

  (2) Subsections 8(1.1) to (1.3) of the Act are replaced by the following:

  • Marginal note:Employee’s first additional contribution

    (1.1) For 2019 and each subsequent year, an employee referred to in subsection (1) shall also, by deduction as provided in this Act from the remuneration in respect of the pensionable employment paid to the employee by the employer, make an employee’s first additional contribution for the year in which the remuneration is paid to the employee of an amount equal to the product obtained when the first additional contribution rate for employees for the year is multiplied by the lesser of

    • (a)...