Budget 2025 Implementation Act, No. 1 (S.C. 2026, c. 3)
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Assented to 2026-03-26
PART 5Various Measures (continued)
DIVISION 52015, c. 12Red Tape Reduction Act (continued)
Coordinating Amendments
Marginal note:2018, c. 12
209 (1) In subsections (2) and (3), other Act means the Budget Implementation Act, 2018, No. 1.
(2) If section 206 of this Act comes into force before section 259 of the other Act, then that section 259 is repealed.
(3) If section 206 of this Act comes into force on the same day as section 259 of the other Act, then that section 259 is deemed to have come into force before that section 206.
DIVISION 6R.S., c. P-36Public Service Superannuation Act (Operational Service)
Amendments to the Act
210 The heading before section 24.1 and sections 24.1 and 24.2 of the Public Service Superannuation Act are replaced by the following:
Operational Service
Marginal note:Definition of operational service
24.1 (1) In sections 24.2 to 24.6, operational service means, subject to any order made under subsection (2), service of a kind designated in the regulations that is carried out in any institutions or other premises that are designated in the regulations in respect of that kind of service. It also includes any periods of time spent away from that service that are specified in the regulations.
Marginal note:Ministerial order
(2) The Minister may, by order, narrow the scope of a kind of service that is designated in the regulations.
Marginal note:Special pension plan
24.2 (1) Any person referred to in subsection (2) who was required by subsection 5(1.1) or (1.2), as it read on December 31, 2012, to contribute to the Superannuation Account or the Public Service Pension Fund or who is required by subsection 5(2) to contribute to the Public Service Pension Fund is entitled, at their option on ceasing to be employed in the public service, in respect of the operational service that is pensionable service to their credit — subject to the election they may make under subsection (3) — to an immediate annuity or annual allowance calculated in the manner prescribed by the regulations, in the circumstances and subject to the terms and conditions prescribed by those regulations, in lieu of any benefit to which that person is otherwise entitled under subsection 13(1) or 13.001(1) in respect of that service.
Marginal note:Persons to whom subsection (1) applies
(2) Subsection (1) applies to
(a) any person employed in operational service — within the meaning of that expression on the day before the day on which this subsection comes into force — by the Correctional Service of Canada on or after March 18, 1994; and
(b) any person, other than a person referred to in paragraph (a), employed in any kind of operational service on or after the date prescribed by the regulations for that kind of service.
Marginal note:Election — operational service
(3) Any person referred to in subsection (2) may, subject to the regulations, elect not to count pensionable service to their credit as operational service for the purposes of subsection (1).
Marginal note:Amendment or revocation
(4) Any person who makes an election under subsection (3) may, subject to the regulations, amend or revoke the election.
Marginal note:Non-application of section 8
(5) Section 8 does not apply in respect of an election made under subsection (3).
211 Subsection 24.4(1) of the Act is replaced by the following:
Marginal note:Additional amount to be contributed
24.4 (1) Subject to subsections (2) and 5(6), any person referred to in subsection 24.2(2) who is required by subsection 5(2) to contribute to the Public Service Pension Fund is, except in the circumstances described in subsection 5(3) or prescribed by the regulations, required to contribute to the Public Service Pension Fund by reservation from salary or otherwise, in addition to any other amount required under this Act, any percentage of their salary that is determined by the Treasury Board on the recommendation of the Minister, which recommendation is to be based on actuarial advice.
212 Section 24.6 of the Act is replaced by the following:
Marginal note:Adjustment of annuity or annual allowance
24.6 If a person who was employed in operational service and who is receiving an annual allowance payable under subsection 24.2(1) is subsequently re-employed in the public service, the amount of any annuity or annual allowance to which the person may become entitled under this Part on again ceasing to be employed in the public service shall be adjusted in accordance with regulations made under paragraph 42(1)(x.1) to take into account the amount of any annual allowance that the person has received.
213 (1) Paragraphs 42.1(1)(m) to (q) of the Act are replaced by the following:
(m) for the purposes of the definition operational service in subsection 24.1(1), designating the kind of service and the institutions or other premises in which that kind of service is carried out and specifying the periods of time spent away from operational service that are to be included within the meaning of that definition;
(n) prescribing the terms and conditions subject to which a person who ceases to be employed in operational service, as defined in subsection 24.1(1), but continues to be employed in the public service may elect to be deemed to be employed in operational service while the person continues to be so employed;
(o) respecting the determination of the effective date on which a person shall be deemed to have become or to have ceased to be employed in operational service, as defined in subsection 24.1(1);
(p) prescribing, for the purposes of sections 24.2 and 24.3 and any regulations made under this subsection, the terms and conditions subject to which any service before, on or after the coming into force of those sections may be counted as operational service, as defined in subsection 24.1(1), that is pensionable service;
(q) prescribing the circumstances in which and the terms and conditions subject to which a person is entitled, at the person’s option, to an immediate annuity or annual allowance under subsection 24.2(1), prescribing the manner of calculating or adjusting that immediate annuity or annual allowance and prescribing the circumstances in which the person is deemed to have exercised the option in favour of either an immediate annuity or annual allowance;
(r) prescribing the date on which paragraph 24.2(2)(b) applies to a person employed in service of a given kind;
(r.1) prescribing the circumstances in which and the terms and conditions subject to which an election may be made under subsection 24.2(3), the period within which it may be made and the manner of making it;
(r.2) prescribing the circumstances in which and the terms and conditions subject to which a person may amend or revoke an election under subsection 24.2(4), the period within which it may be amended or revoked and the manner of amending or revoking it;
(r.3) prescribing the circumstances in which a person is not required to make a contribution under subsection 24.4(1);
(2) Paragraph 42.1(1)(t) of the Act is replaced by the following:
(t) requiring the Minister to credit additional amounts to the Superannuation Account, or to pay additional amounts into the Public Service Pension Fund, in respect of operational service, as defined in subsection 24.1(1), that is pensionable service to the credit of a person referred to in subsection 24.2(2) and prescribing the manner and circumstances in which those amounts are to be credited or paid;
214 (1) The portion of the definition recipient in section 64 of the Act before paragraph (a) is replaced by the following:
- recipient
recipient means a person who is in receipt of a pension, but does not include a person who is in receipt of an immediate annuity or annual allowance under section 16 or subsection 24.2(1) unless
(2) The portion of paragraph (c) of the definition recipient in section 64 of the Act before subparagraph (i) is replaced by the following:
(c) that immediate annuity or annual allowance is based on a number of years of operational service, as defined in section 15 or subsection 24.1(1), as the case may be, that is pensionable service and that pensionable service consists of not less than
215 Subsection 69(4) of the Act is replaced by the following:
Marginal note:Deemed retirement year
(4) For the purposes of subsection (3), when that subsection is applied in determining under subsection (2) the supplementary benefit payable to a person in respect of a pension payable under subsection 17(2) or 24.2(1), the person is deemed to have ceased to be employed at the time they ceased to be employed in operational service, as defined in section 15 or subsection 24.1(1), as the case may be.
Coming into Force
Marginal note:Order in council
216 This Division comes into force on a day to be fixed by order of the Governor in Council.
DIVISION 7R.S., c. P-36Public Service Superannuation Act (Workforce Reduction)
Amendments to the Act
217 (1) Subparagraph 13(1)(c)(ii) of the Public Service Superannuation Act is amended by striking out “or” at the end of clause (C) and by adding the following after that clause:
(C.1) subject to subsection (1.1), if at the time the contributor exercises their option under this clause a workforce reduction initiative is in effect, and if at the time they cease to be so employed they have reached 50 years of age and have been employed in the public service for a period of or for periods totalling at least 10 years, an annual allowance, payable immediately on their so ceasing to be employed, equal to the amount of the deferred annuity referred to in clause (A), or
(2) Section 13 of the Act is amended by adding the following after subsection (1):
Marginal note:Limitation on entitlement to annual allowance
(1.1) A contributor is not entitled to an annual allowance under clause (1)(c)(ii)(C.1) unless the Treasury Board approves their entitlement to it based on the criteria that it establishes and the contributor ceases to be employed in the public service during the period that begins on the day on which this subsection comes into force and ends on the 300th day after that day.
Marginal note:Limitation on approval
(1.2) The Treasury Board is not authorized to approve entitlement to an annual allowance referred to in clause (1)(c)(ii)(C.1) after the 120th day after the day on which this subsection comes into force.
218 (1) Subparagraph 13.001(1)(c)(ii) of the Act is amended by striking out “or” at the end of clause (C) and by adding the following after that clause:
(C.1) subject to subsection (1.1), if at the time the contributor exercises their option under this clause a workforce reduction initiative is in effect, and if at the time they cease to be so employed they have reached 55 years of age and have been employed in the public service for a period of or for periods totalling at least 10 years, an annual allowance, payable immediately on their so ceasing to be employed, equal to the amount of the deferred annuity referred to in clause (A), or
(2) Section 13.001 of the Act is amended by adding the following after subsection (1):
Marginal note:Limitation on entitlement to annual allowance
(1.1) A contributor is not entitled to an annual allowance under clause (1)(c)(ii)(C.1) unless the Treasury Board approves their entitlement to it based on the criteria that it establishes and the contributor ceases to be employed in the public service during the period that begins on the day on which this subsection comes into force and ends on the 300th day after that day.
Marginal note:Limitation on approval
(1.2) The Treasury Board is not authorized to approve entitlement to an annual allowance referred to in clause (1)(c)(ii)(C.1) after the 120th day after the day on which this subsection comes into force.
219 The Act is amended by adding the following after section 44.2:
Marginal note:Payment — waiver of reductions
44.21 Despite subsection 43(1) of this Act and section 21 of the Special Retirement Arrangements Act, the amount of the reduction provided for by clause 13(1)(c)(ii)(C) or 13.001(1)(c)(ii)(C) that, under either of those clauses, is waived by the Treasury Board during the period that begins on the day on which this section comes into force and ends on the 300th day after that day, is to be charged to the Public Service Pension Fund and paid out of the assets of the Public Sector Pension Investment Board.
Marginal note:Payment — difference in amounts
44.22 Despite subsection 43(1) of this Act and section 21 of the Special Retirement Arrangements Act, the difference between the amount of the annual allowance that is payable to a contributor under clause 13(1)(c)(ii)(C.1) or 13.001(1)(c)(ii)(C.1) — and the amount of the annual allowance that would have been payable to them had they exercised an option under clause 13(1)(c)(ii)(B), (C) or (D) or 13.001(1)(c)(ii)(B), (C) or (D) and ceased to be employed in the public service at the same time as they in fact ceased to be so employed — is to be charged to the Public Service Pension Fund and paid out of the assets of the Public Sector Pension Investment Board.
220 The Act is amended by adding the following after section 46:
Transitional Provisions
Marginal note:Definition of transitional period
46.01 (1) In this section, transitional period means the period that begins on the day on which clauses 13(1)(c)(ii)(C.1) and 13.001(1)(c)(ii)(C.1) come into force and ends on the 120th day after that day.
Marginal note:Application
(2) This section applies to a contributor who, during the transitional period, exercised an option under clause 13(1)(c)(ii)(C.1) or 13.001(1)(c)(ii)(C.1) but remained employed in the public service.
Marginal note:Continuation — power to approve
(3) Despite subsections 13(1.2) and 13.001(1.2), during the period that begins on the first day after the day on which the transitional period ends and ends on the 179th day after that first day, the Treasury Board is authorized, in respect of contributors to whom this section applies, to approve, based on the criteria established by the Treasury Board, their entitlement to an annual allowance referred to in clause 13(1)(c)(ii)(C.1) or 13.001(1)(c)(ii)(C.1).
C.R.C., c. 945Related Amendment to the Income Tax Regulations
221 Subsection 8503(13) of the Income Tax Regulations is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):
(c) the conditions in section 8303, paragraph (3)(c) and section 8504 do not apply in respect of benefits provided to a member under the pension plan established by the Public Service Superannuation Act if the benefits arise as a result of a waiver granted by the Treasury Board, before 2028, of any early retirement reductions in respect of the member that would otherwise apply under that Act or under the Retirement Compensation Arrangements Regulations, No. 1.
Coming into Force
Marginal note:January 15, 2026 or royal assent
222 (1) Sections 217 to 219 and 221 come into force on the later of the day on which this Act receives royal assent and January 15, 2026.
Marginal note:121st day after the coming into force of section 217
(2) Section 220 comes into force on the 121st day after the day on which section 217 comes into force.
DIVISION 81993, c. 14; 2001, c. 22, s. 2Farm Credit Canada Act
223 The Farm Credit Canada Act is amended by adding the following after section 16:
Review of Act
Marginal note:Review
16.1 (1) Within five years after the day on which this section comes into force and every 10 years after that, the Minister of Agriculture and Agri-Food must, in consultation with the Minister of Finance, undertake a review of the provisions and operation of this Act.
Marginal note:Report to Parliament
(2) Within one year after the day on which the review is undertaken, the Minister of Agriculture and Agri-Food must cause a report of the review to be tabled in each House of Parliament.
Marginal note:Review of report
(3) The report must be reviewed by any committee of the Senate or of the House of Commons to which it is referred.
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