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)
Full Document:
Assented to 2016-12-15
PART 1Amendments to the Canada Pension Plan and the Canada Pension Plan Investment Board Act (continued)
R.S., c. C-8Canada Pension Plan (continued)
Marginal note:2011, c. 24, s. 174
4 (1) The portion of subsection 9(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Employer’s base contribution
9 (1) Every employer shall, in respect of each employee employed by the employer in pensionable employment, make an employer’s base contribution for the year in which remuneration in respect of the pensionable employment is paid to the employee of an amount equal to the product obtained when the contribution rate for employers for the year is multiplied by the lesser of
Marginal note:2004, c. 22, s. 15
(2) Subsection 9(2) of the Act is replaced by the following:
Marginal note:Employer’s first additional contribution
(1.1) For 2019 and each subsequent year, an employer referred to in subsection (1) shall also, in respect of each employee employed by the employer in pensionable employment, make an employer’s first additional contribution for the year in which remuneration in respect of the pensionable employment is paid to the employee of an amount equal to the product obtained when the first additional contribution rate for employers 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 employee’s 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 on which a contribution has been made for the year by the employer with respect to the employee under a provincial pension plan.
Marginal note:Employer’s second additional contribution
(1.2) For 2024 and each subsequent year, an employer referred to in subsection (1) shall also, in respect of each employee employed by the employer in pensionable employment, make an employer’s second additional contribution for the year in which remuneration in respect of the pensionable employment is paid to the employee of an amount equal to the product obtained when the second additional contribution rate for employers for the year is multiplied by 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.
Marginal note:Succession of employers
(2) If one employer immediately succeeds another as the employer of an employee as a result of the formation or dissolution of a corporation or the acquisition — with the agreement of the former employer or by operation of law — of all or part of a business of the former employer, the successor employer may, for the application of subsections (1), (1.1) and (1.2) and 8(1), (1.1) and (1.2) and section 21, take into account the amounts paid, deducted, remitted or contributed under this Act by the former employer in respect of the year in relation to the employment of the employee as if they had been paid, deducted, remitted or contributed by the successor employer. If the employer takes those amounts into account with respect to the employer’s contributions, the employer shall also take them into account with respect to the employee’s contributions.
Marginal note:2004, c. 22, s. 15
(3) The portion of subsection 9(3) of the Act before paragraph (a) is replaced by the following:
Marginal note:Self-employment succeeded by employment
(3) For the application of subsections (1), (1.1) and (1.2) and 8(1), (1.1) and (1.2) and section 21, if a person, in a year, is self-employed, ceases to be self-employed and becomes an employee of a corporation that is controlled by the person, the corporation may
Marginal note:R.S., c. 30 (2nd Supp.), s. 3; 2004, c. 22, s. 16
5 (1) The portion of subsection 10(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Base contribution in respect of self-employed earnings
10 (1) Every individual who is resident in Canada for the purposes of the Income Tax Act during a year and who has contributory self-employed earnings for the year shall make a base contribution for the year of an amount equal to the product obtained when the contribution rate for self-employed persons for the year is multiplied by the lesser of
Marginal note:R.S., c. 30 (2nd Supp.), s. 3
(2) Paragraph 10(1)(b) of the Act is replaced by the following:
(b) the individual’s maximum contributory earnings for the year, minus the individual’s salary and wages, if any, 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 individual’s salary and wages on which a contribution has been made for the year by the individual under a provincial pension plan.
(3) Section 10 of the Act is amended by adding the following after subsection (1):
Marginal note:First additional contribution in respect of self-employed earnings
(1.1) For 2019 and each subsequent year, an individual referred to in subsection (1) shall also make a first additional contribution for the year of an amount equal to the product obtained when the first additional contribution rate for self-employed persons for the year is multiplied by the lesser of
(a) the individual’s contributory self-employed earnings for the year, minus the amount by which the individual’s basic exemption for the year exceeds the aggregate of all amounts deducted as prescribed on account of the individual’s basic exemption for the year whether by one or more employers under section 8, and
(b) the individual’s maximum contributory earnings for the year, minus the individual’s salary and wages, if any, on which a first additional contribution has been made for the year.
Marginal note:Second additional contribution in respect of self-employed earnings
(1.2) For 2024 and each subsequent year, an individual referred to in subsection (1) shall also make a second additional contribution for the year of an amount equal to the product obtained when the second additional contribution rate for self-employed persons for the year is multiplied by
(a) the amount by which the individual’s contributory self-employed earnings for the year — not exceeding the individual’s additional maximum pensionable earnings for the year — exceeds the individual’s maximum pensionable earnings for the year,
minus
(b) the individual’s salary and wages, if any, on which a second additional contribution has been made for the year.
Marginal note:2004, c. 22, s. 16
(4) The portion of subsection 10(2) of the Act before paragraph (a) is replaced by the following:
Marginal note:Employment succeeded by self-employment
(2) For the application of subsections (1), (1.1) and (1.2), if a person, in a year, is an employee of a corporation that is controlled by the person, ceases to be employed by that corporation and becomes self-employed, the person may
Marginal note:1997, c. 40, s. 59
6 Subsection 11.1(2) of the Act is replaced by the following:
Marginal note:Contribution rates after 1986
(2) The contribution rate for employees, employers and self-employed persons for 1987 and subsequent years is as set out in Schedule 1, as amended from time to time under section 113.1.
7 The Act is amended by adding the following after section 11.1:
First Additional Contribution Rate and Second Additional Contribution Rate
Marginal note:First and second additional contribution rates
11.2 The first additional contribution rate and the second additional contribution rate for employees, employers and self-employed persons for 2019 and subsequent years is as set out in Schedule 2, as amended from time to time under section 113.1.
Marginal note:2009, c. 31, s. 26(2)
8 Subsection 12(1.2) of the Act is replaced by the following:
Marginal note:Calculation of contributory salary and wages
(1.2) If a person does not revoke — in respect of an employer — an election in the prescribed form and manner, the contributory salary and wages referred to in paragraphs 8(1)(a) and (1.1)(a), subsection 8(1.2), paragraphs 9(1)(a) and (1.1)(a) and subsection 9(1.2) do not, for the purposes of those provisions, include income from that employment. However, the person may — in respect of that income — make an election under subsection 13(3) and pay the contributions required under section 10 within one year after the person’s balance-due day.
Marginal note:2009, c. 31, s. 27(2)
9 (1) The portion of subsection 13(3) of the Act before paragraph (a) is replaced by the following:
Marginal note:Election to include certain earnings — base contribution
(3) Despite subsection (1), the amount of the contributory self-employed earnings of a person for a year for the purposes of subsection 10(1) shall, if the person or their representative makes an election in the prescribed form and manner within one year from June 15 in the following year — or, in the case of an employee to whom the Minister refunds an amount under section 38, from the day on which the Minister refunds the amount — include any amount by which
(2) 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 contribution has been made for the year by the person under a provincial pension plan, and
(3) Section 13 of the Act is amended by adding the following after subsection (3):
Marginal note:Earnings — first additional contribution
(3.1) For 2019 and each subsequent year, if a person or their representative makes an election under subsection (3), the amount of the contributory self-employed earnings of the person for a year for the purposes of subsection 10(1.1) shall include any amount by which
(a) the lesser of
exceeds
Marginal note:Earnings — second additional contribution
(3.2) For 2024 and each subsequent year, if a person or their representative makes an election under subsection (3), the amount of the contributory self-employed earnings of the person for a year for the purposes of subsection 10(1.2) shall include any amount by which
(a) the lesser of
exceeds
(b) the aggregate of
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