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Budget Implementation Act, 2018, No. 1 (S.C. 2018, c. 12)

Assented to 2018-06-21

PART 6Various Measures (continued)

DIVISION 19R.S., c. C-8Canada Pension Plan (continued)

Amendments to the Act (continued)

365 The portion of subsection 12(1) of the Act before paragraph (a) is replaced by the following:

Marginal note:Amount of contributory salary and wages

  • 12 (1) The amount of the contributory salary and wages of a person for a year is the person’s income for the year from pensionable employment, computed in accordance with the Income Tax Act, plus any deductions for the year made in computing that income otherwise than under paragraph 8(1)(c) of that Act, but does not include any such income received by the person

  • 366 (1) Subparagraph 13(3)(b)(i) of the Act is replaced by the following:

    • (i) the person’s salary and wages on which a base contribution has been made for the year and the amount, if any, that is determined in the prescribed manner to be the person’s salary and wages on which a base contribution has been made for the year by the person under a provincial pension plan, and

  • (2) Subparagraph 13(3.1)(a)(i) of the Act is replaced by the following:

    • (i) the person’s contributory salary and wages for the year, and

  • (3) Subparagraph 13(3.1)(b)(i) of the Act is replaced by the following:

    • (i) the person’s salary and wages on which a first additional contribution has been made for the year and the amount, if any, that is determined in the prescribed manner to be the person’s salary and wages on which a first additional contribution has been made for the year by the person under a provincial pension plan, and

  • (4) Clause 13(3.1)(b)(ii)(A) of the Act is replaced by the following:

    • (A) the aggregate of all amounts deducted as prescribed on account of the person’s basic exemption for the year by one or more employers under section 8 and all amounts deducted as prescribed by or under a provincial pension plan on account of any like exemption for the year by one or more employers under that plan, and

  • (5) Subparagraph 13(3.2)(a)(i) of the Act is replaced by the following:

    • (i) the person’s contributory salary and wages for the year, and

  • (6) Paragraph 13(3.2)(b) of the Act is amended by adding the following after subparagraph (i):

    • (i.1) the amount, if any, that is determined in the prescribed manner to be the person’s salary and wages on which a first additional contribution has been made for the year by the person under a provincial pension plan and the person’s salary and wages on which a second additional contribution has been made for the year by the person under a provincial pension plan,

  • (7) Clause 13(3.2)(b)(ii)(A) of the Act is replaced by the following:

    • (A) the aggregate of all amounts deducted as prescribed on account of the person’s basic exemption for the year by one or more employers under section 8 and all amounts deducted as prescribed by or under a provincial pension plan on account of any like exemption for the year by one or more employers under that plan, and

367 Subsection 15(1) of the Act is replaced by the following:

Marginal note:Amount of salary and wages on which base contribution made

  • 15 (1) The amount of a person’s salary and wages on which a base contribution has been made for a year is the greater of the following amounts, divided by the contribution rate for employees for the year:

    • (a) the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s base contribution for the year under this Act, minus the portion of those amounts that exceeds the amount determined under paragraph 8(2)(a), and

    • (b) an amount equal to

      • (i) the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s base contribution for the year under this Act or under a provincial pension plan,

      minus

      • (ii) the sum of

        • (A) the amount determined under paragraph 8(2)(b), and

        • (B) the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s base contribution for the year under this Act or under a provincial pension plan, minus the sum of the amounts determined under paragraphs 8(2)(a) and (b).

  • Marginal note:Employer’s failure to deduct amount

    (1.1) For the purposes of subsection (1), if an employer has failed to deduct an amount as required from the person’s remuneration on account of the employee’s base contribution for the year and that person has, before June 30 of the following year, notified the Minister of the employer’s failure to so deduct that amount, an amount equal to the amount that should have been so deducted by the employer on account of that contribution is added to the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s base contribution for the year.

368 Subsection 15.1(1) of the Act is replaced by the following:

Marginal note:Amount of salary and wages on which first additional contribution made

  • 15.1 (1) The amount of a person’s salary and wages on which a first additional contribution has been made for a year is the greater of the following amounts, divided by the first additional contribution rate for employees for the year:

    • (a) the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s first additional contribution for the year under this Act, minus the portion of those amounts that exceeds the amount determined under paragraph 8(2)(a.1), and

    • (b) an amount equal to

      • (i) the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s first additional contribution for the year under this Act or under a provincial pension plan,

      minus

      • (ii) the sum of

        • (A) the amount determined under paragraph 8(2)(c), and

        • (B) the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s first additional contribution for the year under this Act or under a provincial pension plan, minus the sum of the amounts determined under paragraphs 8(2)(a.1) and (c).

  • Marginal note:Employer’s failure to deduct amount

    (1.1) For the purposes of subsection (1), if an employer has failed to deduct an amount as required from the person’s remuneration on account of the employee’s first additional contribution for the year and that person has, before June 30 of the following year, notified the Minister of the employer’s failure to so deduct that amount, an amount equal to the amount that should have been so deducted by the employer on account of that contribution is added to the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s first additional contribution for the year.

369 Subsection 15.2(1) of the Act is replaced by the following:

Marginal note:Amount of salary and wages on which second additional contribution made

  • 15.2 (1) The amount of a person’s salary and wages on which a second additional contribution has been made for a year is an amount equal to the product obtained when the ratio referred to in subsection 8(8) is multiplied by the following amount, divided by the second additional contribution rate for employees for the year:

    • (a) the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s second additional contribution for the year under this Act or under a provincial pension plan and the amounts determined under clauses 15(1)(b)(ii)(B) and 15.1(1)(b)(ii)(B),

    minus

    • (b) the amount determined under subsection 8(2).

  • Marginal note:Employer’s failure to deduct amount

    (1.1) For the purposes of subsection (1), if an employer has failed to deduct an amount as required from the person’s remuneration on account of the employee’s second additional contribution for the year and that person has, before June 30 of the following year, notified the Minister of the employer’s failure to so deduct that amount, an amount equal to the amount that should have been so deducted by the employer on account of that contribution is added to the aggregate of all amounts deducted as required from the remuneration of that person on account of the employee’s second additional contribution for the year.

370 Subsection 21(3.1) of the Act is replaced by the following:

  • Marginal note:Payment and deemed notification

    (3.1) Once the decision under subsection 27.2(3) or section 28 is communicated to the employer, the employer is liable without interest or penalties under this Act to pay any contribution required to be paid by the employer with respect to the employee. On payment by the employer of any amount as or on account of that contribution, the employee is deemed to have notified the Minister as required by subsection 15(1.1), 15.1(1.1) or 15.2(1.1) of the employer’s failure to deduct the amount of that contribution from the remuneration of the employee.

371 Paragraph 40(1)(f) of the Act is replaced by the following:

  • (f) respecting the manner in which any provision of this Act that applies or extends to an employer of an employee shall apply or extend to any person by whom the remuneration of an employee in respect of pensionable employment is paid either wholly or in part, and to the employer of any such employee;

  • 372 (1) Paragraph 44(1)(d) of the Act is replaced by the following:

    • (d) a survivor’s pension shall be paid

      • (i) before 2019, to the survivor of a deceased contributor who has made base contributions for not less than the minimum qualifying period, if the survivor

        • (A) has reached 65 years of age, or

        • (B) in the case of a survivor who has not reached 65 years of age,

          • (I) had at the time of the death of the contributor reached 35 years of age,

          • (II) was at the time of the death of the contributor a survivor with dependent children, or

          • (III) is disabled, and

      • (ii) after 2018, to the survivor of a deceased contributor who has made base contributions for not less than the minimum qualifying period;

  • (2) Subparagraphs 44(1)(e)(ii) and (iii) of the Act are replaced by the following:

    • (ii) is a contributor to whom a disability pension or a post-retirement disability benefit would have been payable at the time the contributor is deemed to have become disabled if an application for a disability pension or a post-retirement disability benefit had been received before the application was actually received, or

    • (iii) is a contributor to whom a disability pension or a post-retirement disability benefit would have been payable at the time the contributor is deemed to have become disabled if a division of unadjusted pensionable earnings that was made under section 55 or 55.1, had not been made;

  • (3) Subsection 44(1) of the Act is amended by striking out “and” at the end of paragraph (f) and by replacing paragraph (g) with the following:

    • (g) a post-retirement benefit shall be paid to a beneficiary of a retirement pension under this Act or under a provincial pension plan who has made a contribution in respect of the post-retirement benefit; and

  • (4) Subsection 44(1) of the Act is amended by adding the following after paragraph (g):

    • (h) a post-retirement disability benefit shall be paid to a beneficiary of a retirement pension who has not reached 65 years of age, is disabled and who

      • (i) has made base contributions for not less than the minimum qualifying period,

      • (ii) is a contributor to whom a post-retirement disability benefit would have been payable at the time the contributor is deemed to have become disabled if an application for a post-retirement disability benefit had been received before the application was actually received, or

      • (iii) is a contributor to whom a post-retirement disability benefit would have been payable at the time the contributor is deemed to have become disabled if a division of unadjusted pensionable earnings that was made under section 55 or 55.1 had not been made.

  • (5) Subsection 44(1.1) of the Act is repealed.

  • (6) The portion of subsection 44(2) of the Act before paragraph (a) is replaced by the following:

    • Marginal note:Calculation of minimum qualifying period in case of disability pension and disabled contributor’s child’s benefit

      (2) For the purposes of paragraph (1)(b) and, if a disability pension is payable to a contributor, paragraph (1)(e),

  • (7) Section 44 of the Act is amended by adding the following after subsection (3):

    • Marginal note:Calculation of minimum qualifying period — post-retirement disability benefit

      (4) For the purposes of paragraph (1)(h) and, if a post-retirement disability benefit is payable to a contributor, paragraph (1)(e), the contributor is deemed to have made base contributions for not less than the minimum qualifying period only if the contributor has made base contributions on earnings that are not less than the contributor’s basic exemption, calculated without regard to subsection 20(2),

      • (a) for at least four of the last six years;

      • (b) for at least 25 years of which at least three are in the last six years; or

      • (c) for each year after the month of cessation of the contributor’s previous disability pension or post-retirement disability benefit.

373 The description of A in subsection 51(1) of the Act is replaced by the following:

A
is

  • (a) in the case of pensionable earnings, earnings for which the contributor is deemed by section 52 to have made a base contribution for the particular month;

  • (b) in the case of first additional pensionable earnings, earnings for which the contributor is deemed by section 52.1 to have made a first additional contribution for the particular month, except in the case where the contributor is considered to be disabled for the purposes of this Act or a provincial pension plan during the particular month, for the calculation of a pension or benefit other than a disability pension, the greatest of the following amounts:

    • (i) the value determined in accordance with section 51.1 multiplied by the Year’s Maximum Pensionable Earnings for the year that includes the particular month, divided by 12,

    • (ii) the highest of any value determined in accordance with section 51.1 for any of the 72 months before the month in which the contributor was deemed to have become disabled, multiplied by the Year’s Maximum Pensionable Earnings for the year that includes the particular month, divided by 12, and

    • (iii) the earnings for which the contributor is deemed by section 52.1 to have made a first additional contribution for the particular month; or

  • (c) in the case of second additional pensionable earnings, earnings for which the contributor is deemed by section 52.2 to have made a second additional contribution for the particular month except in the case where the contributor is considered to be disabled for the purposes of this Act or a provincial pension plan during the particular month, for the calculation of a pension or benefit other than a disability pension, the greatest of the following amounts:

    • (i) the value determined in accordance with section 51.2 multiplied by the Year’s Maximum Pensionable Earnings for the year that includes the particular month, divided by 12,

    • (ii) the highest of any value determined in accordance with section 51.2 for any of the 72 months before the month in which the contributor was deemed to have become disabled, multiplied by the Year’s Maximum Pensionable Earnings for the year that includes the particular month, divided by 12, and

    • (iii) the earnings for which the contributor is deemed by section 52.2 to have made a second additional contribution for the particular month; and

374 The Act is amended by adding the following after section 51:

Marginal note:Value determined — disabled contributor’s first additional contributory period

51.1 For each month that was excluded from the contributor’s contributory period under this Act or under a provincial pension plan by reason of disability, a value shall be determined by the formula

[[(M1 × A) + (M2 × B) + (M3 × C) + (M4 × D) + (M5 × E) + (M6 × F) + (M7 × G)]/R] × 0.7

where

A
is, in respect of the sixth year before the year in which they were deemed to have become disabled, the greater of

  • (a) a ratio calculated by dividing the first additional unadjusted pensionable earnings of the contributor for that sixth year by the Year’s Maximum Pensionable Earnings for that year, and

  • (b) any value that was determined in accordance with this section for a month in that sixth year;

B
is, in respect of the fifth year before the year in which they were deemed to have become disabled, the greater of

  • (a) a ratio calculated by dividing the first additional unadjusted pensionable earnings of the contributor for that fifth year by the Year’s Maximum Pensionable Earnings for that year, and

  • (b) any value that was determined in accordance with this section for a month in that fifth year;

C
is, in respect of the fourth year before the year in which they were deemed to have become disabled, the greater of

  • (a) a ratio calculated by dividing the first additional unadjusted pensionable earnings of the contributor for that fourth year by the Year’s Maximum Pensionable Earnings for that year, and

  • (b) any value that was determined in accordance with this section for a month in that fourth year;

D
is, in respect of the third year before the year in which they were deemed to have become disabled, the greater of

  • (a) a ratio calculated by dividing the first additional unadjusted pensionable earnings of the contributor for that third year by the Year’s Maximum Pensionable Earnings for that year, and

  • (b) any value that was determined in accordance with this section for a month in that third year;

E
is, in respect of the second year before the year in which they were deemed to have become disabled, the greater of

  • (a) a ratio calculated by dividing the first additional unadjusted pensionable earnings of the contributor for that second year by the Year’s Maximum Pensionable Earnings for that year, and

  • (b) any value that was determined in accordance with this section for a month in that second year;

F
is, in respect of the year before the year in which they were deemed to have become disabled, the greater of

  • (a) a ratio calculated by dividing the first additional unadjusted pensionable earnings of the contributor for that prior year by the Year’s Maximum Pensionable Earnings for that year, and

  • (b) any value that was determined in accordance with this section for a month in that prior year;

G
is, in respect of the year in which they were deemed to have become disabled, the greater of

  • (a) the following number:

    • (i) in the case where the contributor was deemed to have become disabled in January, zero, or

    • (ii) in any other case, the lesser of 1 and the number determined by the formula

      H/[I × (M7/12)]

      where

      H
      is the first additional unadjusted pensionable earnings for that year, and
      I
      is the Year’s Maximum Pensionable Earnings for that year, and

  • (b) any value that was determined in accordance with this section for a month in that year;

M1
is the lesser of

  • (a) the number of months in the contributor’s first additional contributory period in the sixth year before the year in which they were deemed to have become disabled, and

  • (b) the number of months determined by the formula

    12 − M7

M2
is the number of months in the contributor’s first additional contributory period in the fifth year before the year in which they were deemed to have become disabled;
M3
is the number of months in the contributor’s first additional contributory period in the fourth year before the year in which they were deemed to have become disabled;
M4
is the number of months in the contributor’s first additional contributory period in the third year before the year in which they were deemed to have become disabled;
M5
is the number of months in the contributor’s first additional contributory period in the second year before the year in which they were deemed to have become disabled;
M6
is the number of months in the contributor’s first additional contributory period in the year before the year in which they were deemed to have become disabled;
M7
is the number of months in the contributor’s first additional contributory period in the year in which they were deemed to have become disabled that are before the month in which they were deemed to have become disabled; and
R
is the greater of 1 and the number of months determined by the formula

M1 + M2 + M3 + M4 + M5 + M6 + M7

Marginal note:Value determined — disabled contributor’s second additional contributory period

51.2 For each month that was excluded from the contributor’s contributory period under this Act or under a provincial pension plan by reason of disability, a value shall be determined by the formula

[[(M1 × A) + (M2 × B) + (M3 × C) + (M4 × D) + (M5 × E) + (M6 × F) + (M7 × G)]/R] × 0.7

where

A
is, in respect of the sixth year before the year in which they were deemed to have become disabled, the greater of

  • (a) a ratio calculated by dividing the second additional unadjusted pensionable earnings of the contributor for that sixth year by the Year’s Maximum Pensionable Earnings for that year, and

  • (b) any value that was determined in accordance with this section for a month in that sixth year;

B
is, in respect of the fifth year before the year in which they were deemed to have become disabled, the greater of

  • (a) a ratio calculated by dividing the second additional unadjusted pensionable earnings of the contributor for that fifth year by the Year’s Maximum Pensionable Earnings for that year, and

  • (b) any value that was determined in accordance with this section for a month in that fifth year;

C
is, in respect of the fourth year before the year in which they were deemed to have become disabled, the greater of

  • (a) a ratio calculated by dividing the second additional unadjusted pensionable earnings of the contributor for that fourth year by the Year’s Maximum Pensionable Earnings for that year, and

  • (b) any value that was determined in accordance with this section for a month in that fourth year;

D
is, in respect of the third year before the year in which they were deemed to have become disabled, the greater of

  • (a) a ratio calculated by dividing the second additional unadjusted pensionable earnings of the contributor for that third year by the Year’s Maximum Pensionable Earnings for that year, and

  • (b) any value that was determined in accordance with this section for a month in that third year;

E
is, in respect of the second year before the year in which they were deemed to have become disabled, the greater of

  • (a) a ratio calculated by dividing the second additional unadjusted pensionable earnings of the contributor for that second year by the Year’s Maximum Pensionable Earnings for that year, and

  • (b) any value that was determined in accordance with this section for a month in that second year;

F
is, in respect of the year before the year in which they were deemed to have become disabled, the greater of

  • (a) a ratio calculated by dividing the second additional unadjusted pensionable earnings of the contributor for that prior year by the Year’s Maximum Pensionable Earnings for that year, and

  • (b) any value that was determined in accordance with this section for a month in that prior year;

G
is, in respect of the year in which they were deemed to have become disabled, the greater of

  • (a) the following number:

    • (i) in the case where the contributor was deemed to have become disabled in January, zero, or

    • (ii) in any other case, the lesser of 1 and the number determined by the formula

      H/[I × (M7/12)]

      where

      H
      is the second additional unadjusted pensionable earnings for that year, and
      I
      is the Year’s Maximum Pensionable Earnings for that year, and

  • (b) any value that was determined in accordance with this section for a month in that year;

M1
is the lesser of

  • (a) the number of months in the contributor’s second additional contributory period in the sixth year before the year in which they were deemed to have become disabled, and

  • (b) the number of months determined by the formula

    12 − M7

M2
is the number of months in the contributor’s second additional contributory period in the fifth year before the year in which they were deemed to have become disabled;
M3
is the number of months in the contributor’s second additional contributory period in the fourth year before the year in which they were deemed to have become disabled;
M4
is the number of months in the contributor’s second additional contributory period in the third year before the year in which they were deemed to have become disabled;
M5
is the number of months in the contributor’s second additional contributory period in the second year before the year in which they were deemed to have become disabled;
M6
is the number of months in the contributor’s second additional contributory period in the year before the year in which they were deemed to have become disabled;
M7
is the number of months in the contributor’s second additional contributory period in the year in which they were deemed to have become disabled that are before the month in which they were deemed to have become disabled; and
R
is the greater of 1 and the number of months determined by the formula

M1 + M2 + M3 + M4 + M5 + M6 + M7

Marginal note:Time when contributor deemed disabled

51.3 For the purposes of sections 51.1 and 51.2 and despite paragraph 42(2)(b), a contributor is deemed to have become disabled at the time that is determined in the prescribed manner to be the time when the contributor became disabled, without regard to the time when their application was made.

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