Canada Pension Plan (R.S.C., 1985, c. C-8)

Application and Operation of Act

Marginal note:Definitions

• 3 (1) In this Act,

  province providing a comprehensive pension plan

  province providing a comprehensive pension plan means a province prescribed by a regulation made on the recommendation of the Minister of Employment and Social Development for the purposes of this Act as a province

  • (a) the government of which has, on or before May 3, 1965, signified the intention of that province to provide for the establishment and operation in that province, in lieu of the operation therein of this Act, of a plan of old age pensions and supplementary benefits providing for the making of contributions thereunder commencing with the year 1966 and providing for the payment of benefits thereunder comparable to those provided by this Act, or

  • (b) the government of which has, at any time after May 3, 1965, given notice in writing to the Minister of Employment and Social Development of the intention of that province to provide

    • (i) for the establishment and operation in that province, in lieu of the operation therein of this Act, of a plan of old age pensions and supplementary benefits providing for the making of contributions thereunder commencing with the third year following the year in which the notice was given and providing for the payment of benefits thereunder comparable to those then provided by this Act or by any provincial pension plan other than that plan, and

    • (ii) for the assumption under that plan of all obligations and liabilities accrued or accruing to the first day of that third year with respect to the payment of benefits under this Act attributable to contributions made under this Act in respect of employment in that province or in respect of self-employed earnings of persons resident in that province; (province instituant un régime général de pensions)

  provincial pension plan

  provincial pension plan means a plan of old age pensions and supplementary benefits for the establishment and operation of which provision has been made as described in paragraph (a) or (b) of the definition province providing a comprehensive pension plan under a law of a province providing a comprehensive pension plan. (régime provincial de pensions)

• Marginal note:Prescription of province after notice given

  (2) Notwithstanding anything in subsection (1), where, not later than twelve months before the first day of the third year following the year in which notice in writing as described in paragraph (b) of the definition province providing a comprehensive pension plan in subsection (1) was given to the Minister of Employment and Social Development by the government of a province, the legislature of the province has provided by law for the establishment and operation in that province of a plan of old age pensions and supplementary benefits as described in that paragraph and for the assumption under that plan of all obligations and liabilities accrued or accruing as described in that paragraph, the Governor in Council shall, by regulation made on the recommendation of the Minister of Employment and Social Development for the purposes of this Act, prescribe that province as a province described in that paragraph.

• Marginal note:Effective date of prescription

  (3) Any regulation made pursuant to subsection (2) becomes effective on the first day of the third year following the year in which the notice referred to in that subsection was given to the Minister of Employment and Social Development.

Marginal note:Application in respect of province providing comprehensive pension plan

• 4 (1) Notwithstanding anything in this Act, except as provided in subsection (2),

  • (a) the provisions of this Act with respect to the making of contributions by employees and employers in respect of pensionable employment and the provisions of Part III with respect to employees in pensionable employment do not apply in relation to employment in a province providing a comprehensive pension plan; and

  • (b) the provisions of this Act with respect to the making of contributions by persons for any year in respect of self-employed earnings do not apply in relation to persons who on the last day of that year were resident in a province providing a comprehensive pension plan.

• Marginal note:Exception

  (2) Subject to subsection (3), all of the provisions of this Act apply to

  • (a) employment by Her Majesty in right of Canada or by an agent of Her Majesty in right of Canada in a province providing a comprehensive pension plan, and

  • (b) any employment in a province providing a comprehensive pension plan if and to the extent that the establishment and operation of the plan referred to in paragraph (a) or (b) of the definition province providing a comprehensive pension plan in subsection 3(1), as the case may be, in relation to persons employed in that employment is outside the legislative authority of the legislature of that province,

  as though that employment were employment in a province other than a province providing a comprehensive pension plan.

• Marginal note:Agreement with government of province providing comprehensive pension plan

  (3) The Minister of Employment and Social Development, with the approval of the Governor in Council, may on behalf of the Government of Canada enter into an agreement with the government of a province providing a comprehensive pension plan whereby, in accordance with such terms and conditions as may be set out in the agreement, any persons employed in employment described in subsection (2), and any employers of any persons employed in such employment, with respect to any persons so employed, shall be subject to the provisions of the provincial pension plan of that province in all respects as though the establishment and operation of that plan in relation to any persons so employed were within the legislative authority of the legislature of that province, and with respect to any period while the agreement continues in force, the agreement has the force of law according to the provisions thereof.

• Marginal note:Province in which person deemed employed

  (4) For the purposes of this Act, a person shall be deemed to be employed in the province in which the establishment of his employer to which he reports for work is situated, and where the employee is not required to report for work at any establishment of his employer, he shall be deemed to be employed in the province in which the establishment of his employer from which his remuneration is paid is situated.

• Marginal note:Reference to last day of year

  (5) A reference in paragraph (1)(b) to the last day of a year shall, in the case of a person who resided in Canada at any time in that year but ceased to reside in Canada before the last day thereof, be deemed to be a reference to the last day in that year on which he resided in Canada.

Electronic Alternatives

Marginal note:Minister’s power

4.1 The Minister of National Revenue may use electronic means to create, communicate, make available, collect, receive, store or otherwise deal with documents or information under this Act.

PART IContributions

Marginal note:Definition of Minister

• 5 (1) In this Part, Minister means the Minister of National Revenue.

• Marginal note:Delegation

  (2) The Minister may authorize an officer or a class of officers to exercise powers or perform duties of the Minister under this Part.

DIVISION AContributions Payable

Pensionable Employment

Marginal note:Pensionable employment

• 6 (1) Pensionable employment is

  • (a) employment in Canada that is not excepted employment;

  • (b) employment in Canada under Her Majesty in right of Canada that is not excepted employment; or

  • (c) employment included in pensionable employment by a regulation made under section 7.

• Marginal note:Excepted employment

  (2) Excepted employment is

  • (a) employment in agriculture or an agricultural enterprise, horticulture, fishing, hunting, trapping, forestry, logging or lumbering by an employer who either pays the employee less than two hundred and fifty dollars in cash remuneration in a year or employs the employee, on terms providing for payment of cash remuneration, for a period of less than twenty-five working days in a year;

  • (b) employment of a casual nature otherwise than for the purpose of the employer’s trade or business;

  • (c) employment as a teacher on exchange from a country other than Canada;

  • (d) employment of a person by the person’s spouse or common-law partner, unless the remuneration paid to the person may be deducted under the Income Tax Act in computing the income of the spouse or common-law partner;

  • (e) employment of a member of a religious order who has taken a vow of perpetual poverty and whose remuneration is paid either directly or by the member to the order;

  • (f) employment for which no cash remuneration is paid where the person employed is the child of, or is maintained by, the employer;

  • (g) employment as a member of the Canadian Forces or the Royal Canadian Mounted Police, except as provided by any other Act of Parliament;

  • (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;

  • (i) employment by Her Majesty in right of a province or by an agent of Her Majesty in right of a province;

  • (j) employment in Canada by the government of a country other than Canada or by an international organization;

  • (j.1) employment of an Indian, as defined in the Indian Act, in respect of which the earnings are not included in computing income for purposes of the Income Tax Act; or

  • (k) employment excepted from pensionable employment by a regulation made under section 7.

Marginal note:Regulations respecting employment to be included in pensionable employment

• 7 (1) The Governor in Council may make regulations for including in pensionable employment

  • (a) any employment outside Canada or partly outside Canada, being employment that would be pensionable employment if it were in Canada;

  • (b) the entire employment under one employer of a person who is engaged by the employer partly in pensionable employment and partly in other employment;

  • (c) any employment if it appears to the Governor in Council that the nature of the work performed is similar to the work performed by persons employed in pensionable employment;

  • (d) the performance of services for remuneration if it appears to the Governor in Council that the terms or conditions on which the services are performed and the remuneration is paid are analogous to a contract of service, whether or not they constitute a contract of service;

  • (e) pursuant to an agreement with the government of a province, employment in Canada by Her Majesty in right of the province or by an agent of Her Majesty in right of the province;

  • (f) pursuant to an agreement with the employing government or organization, employment in Canada by the government of a country other than Canada or by an international organization; and

  • (g) any excepted employment other than employment described in paragraph 6(2)(g) or (i).

• Marginal note:Regulations respecting employment to be excepted from pensionable employment

  (2) The Governor in Council may make regulations for excepting from pensionable employment

  • (a) any employment if it appears to the Governor in Council by reason of the laws of any country other than Canada that a duplication of contributions or benefits will result;

  • (b) any employment of a person by an employer resident outside Canada unless arrangements satisfactory to the Minister have been made for the payment of the contributions required by this Act to be made in respect of that employment;

  • (c) the entire employment under one employer of a person who is engaged by the employer partly in pensionable employment and partly in other employment;

  • (d) any employment if it appears to the Governor in Council that the nature of the work performed by persons employed in that employment is similar to the nature of the work performed by persons employed in employment that is not pensionable employment;

  • (e) any employment if it appears to the Governor in Council that the services are performed and the remuneration is paid in a manner analogous to the earning of income from the carrying on of a business; and

  • (f) any employment in which persons are ordinarily employed to an inconsiderable extent.

• Marginal note:Extent of authority to make regulations

  (3) A regulation made under subsection (1) or (2) may be conditional or unconditional, qualified or unqualified, and may be general or restricted to a specific area, a person or a group or class of persons, and the authority conferred by subsection (1) to make regulations to include in pensionable employment any employment described in that subsection includes authority to make such other regulations to provide for the manner in which the provisions of this Act shall apply with respect thereto, and to adapt the provisions of this Act with respect thereto, as appear to the Governor in Council to be necessary to give effect to the regulations made under that subsection.

• Marginal note:Limitation

  (4) No regulation under this section shall require the payment of an employer’s contribution by the government of a country other than Canada or by an international organization unless the regulation is made pursuant to an agreement referred to in paragraph (1)(f).

Contributions by Employees and Employers in respect of Pensionable Employment

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

  • (a) the employee’s contributory salary and wages for the year paid by the employer, minus such amount as or on account of the basic exemption for the year as is prescribed, and

  • (b) the employee’s maximum contributory earnings for the year, minus the amount, if any, that is determined in the prescribed manner to be the employee’s salary and wages paid by the employer on which a base contribution has been made for the year by the employee under a provincial pension plan.

• 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) the employee’s contributory salary and wages for the year paid by the employer, minus the amount as or on account of the basic exemption for the year that is prescribed, and

  • (b) the employee’s maximum contributory earnings for the year, minus the amount, if any, that is determined in the prescribed manner to be the employee’s salary and wages paid by the employer on which a first additional contribution has been made for the year by the employee under a provincial pension plan.

• Marginal note:Employee’s second additional contribution

  (1.2) For 2024 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 second additional contribution for the year in which the remuneration is paid to the employee of an amount equal to the product obtained when the second additional contribution rate for employees for the year is multiplied by the amount equal to

  • (a) the amount by which the employee’s contributory salary and wages for the year paid by the employer — not exceeding the employee’s additional maximum pensionable earnings for the year — exceeds the employee’s maximum pensionable earnings for the year,

  minus

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

• (1.3) [Repealed, 2016, c. 14, s. 3]

• Marginal note:Excess amount

  (2) An excess amount has been paid if the aggregate of all amounts deducted as required from the remuneration of an employee for a year, whether by one or more employers, on account of the employee’s contributions for the year under this Act or under a provincial pension plan exceeds the sum obtained by adding the following amounts:

  • (a) the product obtained when the contribution rate for employees for the year under this Act is multiplied by the lesser of

    • (i) the employee’s contributory salary and wages for the year in respect of pensionable employment to which the provisions of this Act relating to the making of contributions apply, plus the employee’s contributory self-employed earnings for the year in the case of an individual who is described in section 10 and to whom the provisions of this Act relating to the making of contributions apply, minus the prorated portion of the employee’s basic exemption for the year calculated under subsection (4), and

    • (ii) the prorated portion of the employee’s maximum contributory earnings for the year calculated under subsection (5);

  • (a.1) for 2019 and each subsequent year, the product obtained when the first additional contribution rate for employees for the year under this Act is multiplied by the lesser of

    • (i) the employee’s contributory salary and wages for the year in respect of pensionable employment to which the provisions of this Act relating to the making of contributions apply, plus the employee’s contributory self-employed earnings for the year in the case of an individual who is described in section 10 and to whom the provisions of this Act relating to the making of contributions apply, minus the prorated portion of the employee’s basic exemption for the year calculated under subsection (4), and

    • (ii) the prorated portion of the employee’s maximum contributory earnings for the year calculated under subsection (5);

  • (a.2) for 2024 and each subsequent year, the product obtained when the second additional contribution rate for employees for the year under this Act is multiplied by the amount by which

    • (i) the employee’s contributory salary and wages for the year in respect of pensionable employment to which the provisions of this Act relating to the making of contributions apply, plus the employee’s contributory self-employed earnings for the year in the case of an individual who is described in section 10 and to whom the provisions of this Act relating to the making of contributions apply — not exceeding the prorated portion of the employee’s additional maximum pensionable earnings for the year calculated under subsection (8),

    exceeds

    • (ii) the prorated portion of the employee’s maximum pensionable earnings for the year calculated under subsection (9);

  • (b) the product obtained when the base contribution rate for employees for the year under a provincial pension plan is multiplied by the lesser of

    • (i) the employee’s contributory salary and wages for the year in respect of pensionable employment to which the provisions of a provincial pension plan apply, minus the prorated portion of the employee’s basic exemption for the year calculated under subsection (6), and

    • (ii) the prorated portion of the employee’s maximum contributory earnings for the year calculated under subsection (7);

  • (c) for 2019 and each subsequent year, the product obtained when the first additional contribution rate for employees for the year under a provincial pension plan is multiplied by the lesser of

    • (i) the employee’s contributory salary and wages for the year in respect of pensionable employment to which the provisions of the provincial pension plan apply, minus the prorated portion of the employee’s basic exemption for the year calculated under subsection (6), and

    • (ii) the prorated portion of the employee’s maximum contributory earnings for the year calculated under subsection (7); and

  • (d) for 2024 and each subsequent year, the product obtained when the second additional contribution rate for employees for the year under a provincial pension plan is multiplied by the amount by which

    • (i) the employee’s contributory salary and wages for the year in respect of pensionable employment to which the provisions of the provincial pension plan apply — not exceeding the prorated portion of the employee’s additional maximum pensionable earnings for the year calculated under subsection (10),

    exceeds

    • (ii) the prorated portion of the employee’s maximum pensionable earnings for the year calculated under subsection (11).

• Marginal note:Overpayment

  (3) The overpayment made by the employee on account of the employee’s contributions for the year under this Act is the lesser of

  • (a) the aggregate of all amounts deducted as required from the remuneration of that employee on account of the employee’s contributions under this Act for the year, minus the sum of the amounts determined under paragraphs (2)(a) to (a.2), and

  • (b) the excess amount calculated in accordance with subsection (2).

• Marginal note:Prorated portion of employee’s basic exemption

  (4) For the purposes of subparagraphs (2)(a)(i) and (a.1)(i), the prorated portion of the employee’s basic exemption for the year is the product obtained when the employee’s basic exemption is multiplied by the ratio that

  • (a) the employee’s contributory salary and wages for the year in respect of pensionable employment to which the provisions of this Act relating to the making of contributions apply, subject to

    • (i) for each year before 2024, the maximum pensionable earnings in respect of each pensionable employment, and

    • (ii) for 2024 and each subsequent year, the additional maximum pensionable earnings in respect of each pensionable employment,

  bears to

  • (b) the aggregate of the employee’s contributory salary and wages for the year in respect of pensionable employment to which the provisions of this Act relating to the making of contributions apply or to which the provisions of a provincial pension plan apply, subject to

    • (i) for each year before 2024, the maximum pensionable earnings in respect of each pensionable employment, and

    • (ii) for 2024 and each subsequent year, the additional maximum pensionable earnings in respect of each pensionable employment.

• Marginal note:Prorated portion of employee’s maximum contributory earnings

  (5) For the purposes of subparagraphs (2)(a)(ii) and (a.1)(ii), the prorated portion of the employee’s maximum contributory earnings for the year is the product obtained when the employee’s maximum contributory earnings is multiplied by the ratio that

  • (a) the employee’s contributory salary and wages for the year in respect of pensionable employment to which the provisions of this Act relating to the making of contributions apply, subject to

    • (i) for each year before 2024, the maximum pensionable earnings in respect of each pensionable employment, and

    • (ii) for 2024 and each subsequent year, the additional maximum pensionable earnings in respect of each pensionable employment,

  bears to

  • (b) the aggregate of the employee’s contributory salary and wages for the year in respect of pensionable employment to which the provisions of this Act relating to the making of contributions apply or to which the provisions of a provincial pension plan apply, subject to

    • (i) for each year before 2024, the maximum pensionable earnings in respect of each pensionable employment, and

    • (ii) for 2024 and each subsequent year, the additional maximum pensionable earnings in respect of each pensionable employment.

• Marginal note:Prorated portion of employee’s basic exemption

  (6) For the purposes of subparagraphs (2)(b)(i) and (c)(i), the prorated portion of the employee’s basic exemption for the year is the difference between the employee’s basic exemption, determined without taking into account paragraphs 19(b) and (c), and the prorated portion calculated under subsection (4).

• Marginal note:Prorated portion of employee’s maximum contributory earnings

  (7) For the purposes of subparagraphs (2)(b)(ii) and (c)(ii), the prorated portion of the employee’s maximum contributory earnings for the year is the difference between the employee’s maximum contributory earnings, determined without taking into account paragraphs 17(b) and (c) and 19(b) and (c), and the prorated portion calculated under subsection (5).

• Marginal note:Prorated portions of employee’s additional maximum pensionable earnings

  (8) For the purposes of subparagraph (2)(a.2)(i), the prorated portion of the employee’s additional maximum pensionable earnings for the year is the product obtained when the employee’s additional maximum pensionable earnings is multiplied by the ratio that

  • (a) the employee’s contributory salary and wages for the year in respect of pensionable employment to which the provisions of this Act relating to the making of contributions apply, subject to the additional maximum pensionable earnings in respect of each pensionable employment,

  bears to

  • (b) the aggregate of the employee’s contributory salary and wages for the year in respect of pensionable employment to which the provisions of this Act relating to the making of contributions apply or to which the provisions of a provincial pension plan apply, subject to the additional maximum pensionable earnings in respect of each pensionable employment.

• Marginal note:Prorated portion of employee’s maximum pensionable earnings

  (9) For the purposes of subparagraph (2)(a.2)(ii), the prorated portion of the employee’s maximum pensionable earnings for the year is the product obtained when the employee’s maximum pensionable earnings for the year is multiplied by the ratio that

  • (a) the employee’s contributory salary and wages for the year in respect of pensionable employment to which the provisions of this Act relating to the making of contributions apply, subject to the additional maximum pensionable earnings in respect of each pensionable employment,

  bears to

  • (b) the aggregate of the employee’s contributory salary and wages for the year in respect of pensionable employment to which the provisions of this Act relating to the making of contributions apply or to which the provisions of a provincial pension plan apply, subject to the additional maximum pensionable earnings in respect of each pensionable employment.

• Marginal note:Prorated portion of employee’s additional maximum pensionable earnings

  (10) For the purposes of subparagraph (2)(d)(i), the prorated portion of the employee’s additional maximum pensionable earnings for the year is the difference between the employee’s additional maximum pensionable earnings, determined without taking into account paragraphs 17.1(b) and (c), and the prorated portion calculated under subsection (8).

• Marginal note:Prorated portion of employee’s maximum pensionable earnings

  (11) For the purposes of subparagraph (2)(d)(ii), the prorated portion of the employee’s maximum pensionable earnings for the year is the difference between the employee’s maximum pensionable earnings, determined without taking into account paragraphs 17(b) and (c), and the prorated portion calculated under subsection (9).