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

Full Document:  

Act current to 2019-08-28 and last amended on 2018-12-15. Previous Versions

PART IIIAdministration (continued)

Financial Provisions (continued)

Marginal note:Effect of regulation made under subsection 3(2)

  •  (1) Where any regulation has been made under subsection 3(2) prescribing a province as a province described in paragraph (b) of the definition province providing a comprehensive pension plan in subsection 3(1),

    • (a) all obligations and liabilities accrued or accruing as described in that paragraph, for the assumption of which under the provincial pension plan of that province provision has been made by any law of that province, shall, from and after the day on which the regulation became effective, cease to be obligations or liabilities accrued or accruing 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; and

    • (b) the Minister of Finance shall pay an amount calculated as provided in subsection (2) to the government of that province, by the transfer to that government in the first instance and to the extent necessary for that purpose, of securities of that province that are designated securities as defined in section 2 of the Canada Pension Plan Investment Board Act, and in the second instance and to the extent necessary for that purpose, of securities of Canada that are designated securities as defined in section 2 of that Act, and by the payment to that government of any balance then remaining in any manner that may be prescribed.

  • Marginal note:Transfer by Investment Board

    (1.1) The Minister of Finance may, by notice, and in accordance with any agreement entered into under section 111.1, require the Investment Board to pay to that Minister any amount, and to transfer to that Minister any securities of the province or of Canada referred to in paragraph (1)(b), that are necessary for the purposes of subsection (1).

  • (1.2) [Repealed, 2003, c. 5, s. 9]

  • Marginal note:Amount to be paid to government of province

    (2) For the purposes of subsection (1), the amount to be calculated as provided in this subsection in the case of any province shall be calculated by the Minister of Finance as the amount obtained by adding

    • (a) the total amount of all contributions credited to the Canada Pension Plan Account and the Additional Canada Pension Plan Account, to the day on which the regulation referred to in subsection (1) became effective, in respect of employment in that province or in respect of self-employed earnings of persons resident in that province, and

    • (b) the part of the net investment return of the Investment Board and all interest credited to or accrued to the credit of the Canada Pension Plan Account and the Additional Canada Pension Plan Account, to the day on which the regulation referred to in subsection (1) became effective, that is derived from the contributions referred to in paragraph (a),

    and subtracting from the total so obtained

    • (c) such part of all amounts paid as or on account of benefits under this Act as would not have been payable under this Act if that province had been a province described in paragraph (a) of the definition province providing a comprehensive pension plan in subsection 3(1), and

    • (d) the part of the costs of administration of this Act, to the day on which the regulation referred to in subsection (1) became effective, that is equal to the proportion of those costs that the total amount of the contributions referred to in paragraph (a) is of the total amount of all contributions credited to the Canada Pension Plan Account and the Additional Canada Pension Plan Account to that day.

  • Marginal note:Agreement respecting assumption of obligations and liabilities

    (3) Where notice in writing has been given to the Minister by the government of a province as described in the definition province providing a comprehensive pension plan in subsection 3(1), the Minister, with the approval of the Governor in Council, may on behalf of the Government of Canada enter into an agreement with the government of that province,

    • (a) for the furnishing of that government under prescribed conditions with any information obtained under this Act, including records of any amounts that are shown in the Record of Earnings to the accounts of persons who have made contributions under this Act in respect of employment in that province or as persons resident in that province in respect of self-employed earnings; and

    • (b) generally for the making of all such arrangements as may be necessary to permit provision to be made for the assumption, under the provincial pension plan referred to in the notice, of all obligations and liabilities accrued or accruing as described in paragraph (b) of the definition province providing a comprehensive pension plan in subsection 3(1).

  • R.S., 1985, c. C-8, s. 113
  • 1997, c. 40, s. 92
  • 2003, c. 5, s. 9
  • 2016, c. 14, s. 49

Financial Review of the Canada Pension Plan

Marginal note:Review every three years

  •  (1) Once every three years after 1997, the Minister of Finance and ministers of the Crown from the included provinces shall review the financial state of the Canada Pension Plan and may make recommendations as to whether benefits, contribution rates, first additional contribution rates or second additional contribution rates should be changed.

  • Marginal note:Review of adjustment factors

    (2) When the Chief Actuary of the Office of the Superintendent of Financial Institutions specifies adjustment factors in his or her report according to subsection 115(1.11), the Minister of Finance and ministers of the Crown from the included provinces shall, as part of their review, also review the adjustment factors fixed under subsection 46(7) and may make recommendations as to whether they should be changed.

  • Marginal note:Completion of review

    (3) If possible, the review in each three year period must be completed in time to permit the Minister of Finance to make recommendations to the Governor in Council before the end of the second year of the three year period.

  • Marginal note:Factors to be considered

    (4) In conducting any review required by this section and in making any recommendations, ministers shall consider

    • (a) the most recent report prepared by the Chief Actuary pursuant to section 115 and any changes between that report and earlier reports prepared by the Chief Actuary;

    • (b) any more recent estimates of the Chief Actuary in respect of

      • (i) the outstanding balance of the Canada Pension Plan Account and the Additional Canada Pension Plan Account,

      • (ii) the projected revenues into and payments out of the Canada Pension Plan Account and the Additional Canada Pension Plan Account,

      • (iii) the ratio of the projected assets over the projected expenditures of the base Canada Pension Plan and the additional Canada Pension Plan, and

      • (iv) the changes, if any, to the amounts and ratios projected at the previous review under this section attributable to changing demographic and economic circumstances or to changes to the base Canada Pension Plan or the additional Canada Pension Plan affecting payments or contributions under the Canada Pension Plan;

    • (c) the financing objective, for the base Canada Pension Plan, of having a contribution rate, without taking into account the changes, if any, referred to in paragraph (e) for which the contribution rate most recently calculated under subparagraph 115(1.1)(c)(ii) exceeds zero, that is no lower than the rate

      • (i) that, beginning with the year 2003, is the lowest constant rate that can be maintained over the foreseeable future, and

      • (ii) that results in the ratio of the projected assets of the base Canada Pension Plan at the end of any given year over the projected expenditures of the base Canada Pension Plan in the following year being generally constant;

    • (d) the financing objective, for the additional Canada Pension Plan, of having additional contribution rates, without taking into account the changes, if any, referred to in paragraph (e) for which the additional contribution rates most recently calculated under subparagraphs 115(1.1)(d)(ii) and (e)(ii) exceed zero, that are no lower than the rates

      • (i) that, beginning with the year 2024, are the lowest constant rates that can be maintained over the foreseeable future, and

      • (ii) that result in projected contributions and investment income that are sufficient to fully pay the projected expenditures of the additional Canada Pension Plan over the foreseeable future; and

    • (e) that changes to the Act that increase benefits or add new benefits must be accompanied by a permanent increase in the contribution rates under this Act to cover the extra costs of the increased or new benefits and by a temporary increase in the contribution rates under this Act for a number of years that is consistent with common actuarial practice to fully pay any unfunded liability resulting from the increased or new benefits.

  • Marginal note:Recommendations made on completion of review

    (5) On the completion of a review required by subsection (1), the Minister of Finance may recommend to the Governor in Council that the Governor in Council make regulations under subsection (6) to amend Schedule 1 or 2 to give effect to any recommendations made under subsection (1). If the recommendations made under subsection (1) are that no changes be made to benefits, contribution rates, first additional contributions rates or second additional contribution rates, the Minister of Finance shall cause those recommendations to be published in the Canada Gazette.

  • Marginal note:Regulation to change rates

    (6) Subject to subsections (7) and (8), the Governor in Council may, on the recommendation of the Minister of Finance made under subsection (5), by regulation amend Schedule 1 or 2 to change the contribution rates, first additional contribution rates or second additional contribution rates for any or all of the years following the review.

  • Marginal note:Limitation on changes

    (7) The following shall apply with respect to any changes to and setting of the rates under subsection (6):

    • (a) the rates for employees and employers for a year must be identical;

    • (b) the rates for self-employed persons for a year must be equal to the sum of the rates for employees and employers for that year;

    • (c) no rate for employees and employers for a year may be increased by more than one-tenth of a percentage point above the rate for the previous year; and

    • (d) no rate for self-employed persons for a year may be increased by more than two-tenths of a percentage point above the rate for the previous year.

  • Marginal note:Coming into force of regulation

    (8) Where a review takes place in a three year period as required by subsection (1) and the Governor in Council before October 1 of the third year of that period makes a regulation under subsection (6), the regulation shall, by order made by the Governor in Council, come into force, or is deemed to have come into force, on January 1 of the year after that period.

  • Marginal note:Provincial consent required

    (8.1) An order made under subsection (8) may not be made unless the lieutenant governor in council of each of at least two thirds of the included provinces, having in total not less than two thirds of the population of all of the included provinces, has, before the October 1 date referred to in that subsection, signified the consent of that province to the coming into force of the regulation.

  • Marginal note:Exemption from Statutory Instruments Act

    (9) A regulation made pursuant to subsection (6) is exempt from the application of sections 3, 5 and 11 of the Statutory Instruments Act.

  • Marginal note:Publication in Canada Gazette

    (10) Forthwith on the coming into force of any regulation made pursuant to subsection (6), the Minister of Finance shall cause a copy thereof to be published in the Canada Gazette.

  • (11) to (11.04) [Repealed, 2007, c. 11, s. 12]

  • Marginal note:Insufficient rates

    (11.05) Subject to subsections (11.12) and (11.13), if, at October 1 of the year before a three-year period for which a review is required by subsection (1), the contribution rate for self-employed persons for the years in that three-year period less the contribution rate most recently calculated under subparagraph 115(1.1)(c)(ii) is less than the contribution rate most recently calculated under subparagraph 115(1.1)(c)(i) for self-employed persons for those years,

    • (a) the amount of the benefits payable in respect of the base Canada Pension Plan in the three-year period shall be determined as if the ratios referred to in paragraphs 45(2)(b) and 56(2)(c), subsection 58(1.1) and subparagraph 59(c)(ii) were each 1; and

    • (b) Schedule 1 is deemed to have been amended as of the next day after that October 1

      • (i) to increase the contribution rate for employees and employers for each year after that October 1 to the rate determined under subsections (11.07) to (11.11) for that year, and

      • (ii) to increase the contribution rate for self-employed persons for each year after that October 1 to twice the contribution rate determined under subsections (11.07) to (11.11) for employers for that year.

  • Marginal note:Interpretation

    (11.06) In the calculations under subsections (11.07) to (11.11),

    A
    is one half of the contribution rate most recently calculated under subparagraph 115(1.1)(c)(i) for self-employed persons for the years in the three-year period referred to in subsection (11.05);
    B
    is the contribution rate for employees and employers at October 1 of the third year of the last three-year period for which contribution rates were set for employees and employers, by an Act of Parliament or by a regulation made under subsection (6), on the recommendation of ministers under subsection (1);
    C
    is one half of the contribution rate most recently calculated under subparagraph 115(1.1)(c)(ii) for self-employed persons for the years in the three-year period referred to in subsection (11.05); and
    D
    is the difference between B and C.
  • Marginal note:Determination of rate — 1st case

    (11.07) If neither A nor D is greater than 4.95% and A is greater than D, the contribution rate for employees and employers for each year after the October 1 date referred to in subsection (11.05) is A plus C.

  • Marginal note:Determination of rate — 2nd case

    (11.08) If A is greater than 4.95%, D is less than or equal to 4.95% and the percentage determined by the formula

    1/2(A - D)

    is less than or equal to 0.1%, then the contribution rate for employees and employers for each year after the October 1 date referred to in subsection (11.05) is the rate determined by the formula

    4.95% + 1/2(A - 4.95%) + C

  • Marginal note:Determination of rate — 3rd case

    (11.09) If A is greater than 4.95%, D is less than or equal to 4.95% and the percentage determined by the formula

    1/2(A - D)

    is greater than 0.1%, then the contribution rate for employees and employers is

    • (a) for the first year after the October 1 date referred to in subsection (11.05), the rate determined by the formula

      4.95% + 1/6(A - 4.95%) + C

    • (b) for the next year, the rate determined by the formula

      4.95% + 1/3(A - 4.95%) + C

      and

    • (c) for each subsequent year, the rate determined by the formula

      4.95% + 1/2(A - 4.95%) + C

  • Marginal note:Determination of rate — 4th case

    (11.1) If subsections (11.07) to (11.09) do not apply and the percentage determined by the formula

    1/2(A - D)

    is less than or equal to 0.1%, then the contribution rate for employees and employers for each year after the October 1 date referred to in subsection (11.05) is the rate determined by the formula

    D + 1/2(A - D) + C

  • Marginal note:Determination of rate — 5th case

    (11.11) If subsections (11.07) to (11.1) do not apply, then the contribution rate for employees and employers is

    • (a) for the first year after the October 1 date referred to in subsection (11.05), the rate determined by the formula

      D + 1/6(A - D) + C

    • (b) for the next year, the rate determined by the formula

      D + 1/3(A - D) + C

      and

    • (c) for each subsequent year, the rate determined by the formula

      D + 1/2(A - D) + C

  • Marginal note:Where paragraph (11.05)(a) does not apply

    (11.12) Paragraph (11.05)(a) does not apply if subsection (11.07) applies.

  • Marginal note:Where subsection (11.05) does not apply

    (11.13) Subsection (11.05) does not apply where

    • (a) a recommendation was made under subsection (1) in the three years before the three year period referred to in subsection (11.05) that the contribution rates for one or more of the years in that three year period be increased and the rates were increased before October 1 of the year before that three year period, by an Act of Parliament or by a regulation made under subsection (6), to give effect to that recommendation; or

    • (b) a recommendation was made under subsection (1) in the three years before the three year period referred to in subsection (11.05) that the contribution rates for the years in that three year period not be increased and the Minister of Finance before October 1 of the year before that three year period has caused that recommendation to be published in the Canada Gazette.

  • Marginal note:Adjustment

    (11.14) If a contribution rate determined under any of subsections (11.07) to (11.11) is not a multiple of 0.005%, the contribution rate is to be rounded to the nearest multiple of 0.005%.

  • Marginal note:Deemed changes to rates — additional Canada Pension Plan

    (11.141) Subject to subsection (11.143), if, at October 1 of the year before a three-year period for which a review is required by subsection (1), any of the following conditions is met, Schedule 2 is deemed to have been amended as of the next day after that October 1 to change the first additional contribution rates or second additional contribution rates for each year after that October 1, if required, in accordance with the calculations set out in the regulations:

    • (a) the difference obtained by subtracting the first additional contribution rate specified in the most recent report prepared for the purpose of subsection 115(1) from the first additional contribution rate for self-employed persons set out in Schedule 2, for the year after that October 1, is within a range set out in the regulations for the purpose of this paragraph;

    • (b) the following differences are within the same range set out in the regulations for the purpose of this paragraph:

      • (i) the difference obtained by subtracting the first additional contribution rate specified in the most recent report prepared for the purpose of subsection 115(1) from the first additional contribution rate for self-employed persons set out in Schedule 2, for the year after that October 1, and

      • (ii) the difference obtained by subtracting the first additional contribution rate specified in the report prepared for the purpose of section 115 that precedes the report referred to in subparagraph (i), from the first additional contribution rate for self-employed persons set out in Schedule 2, for the year that is two years before that October 1;

    • (c) the difference obtained by subtracting the second additional contribution rate specified in the most recent report prepared for the purpose of subsection 115(1) from the second additional contribution rate for self-employed persons set out in Schedule 2, for the year after that October 1, is within a range set out in the regulations for the purpose of this paragraph; or

    • (d) the following differences are within the same range set out in the regulations for the purpose of this paragraph:

      • (i) the difference obtained by subtracting the second additional contribution rate specified in the most recent report prepared for the purpose of subsection 115(1) from the second additional contribution rate for self-employed persons set out in Schedule 2, for the year after that October 1, and

      • (ii) the difference obtained by subtracting the second additional contribution rate specified in the report prepared for the purpose of section 115 that precedes the report referred to in subparagraph (i), from the second additional contribution rate for self-employed persons set out in Schedule 2, for the year that is two years before that October 1.

  • Marginal note:Determination of benefits — additional Canada Pension Plan

    (11.142) Subject to subsection (11.143), if, at October 1 of the year before a three-year period for which a review is required by subsection (1), any of the conditions set out in paragraphs (11.141)(a) to (d) is met, the portions of benefits under this Act in respect of the additional Canada Pension Plan, for each year after that October 1, shall be determined in accordance with the regulations.

  • Marginal note:Non-application of subsections (11.141) and (11.142)

    (11.143) Subsections (11.141) and (11.142) do not apply if

    • (a) a recommendation was made under subsection (1) in the three years before the three-year period referred to in subsection (11.141) that the first additional contribution rates or second additional contribution rates for one or more of the years in that three-year period be changed and the rates were changed before October 1 of the year before that three-year period, by an Act of Parliament or by a regulation made under subsection (6), to give effect to that recommendation; or

    • (b) a recommendation was made under subsection (1) in the three years before the three-year period referred to in subsection (11.141) that the first additional contribution rates or second additional contribution rates for the years in that three-year period not be changed and the Minister of Finance before October 1 of the year before that three-year period has caused that recommendation to be published in the Canada Gazette.

  • Marginal note:Regulations

    (11.144) The Governor in Council may, on the recommendation of the Minister of Finance, make regulations respecting

    • (a) the calculation of deemed changes to rates for the purposes of subsection (11.141);

    • (b) the determination of the ranges referred to in paragraphs (11.141)(a) to (d); and

    • (c) the determination of portions of benefits for the purposes of subsection (11.142).

  • Marginal note:Provincial consent

    (11.145) Regulations under subsection (11.144) may only be made if the lieutenant governor in council of each of at least two thirds of the included provinces, having in total not less than two thirds of the population of all of the included provinces, has signified the consent of that province.

  • Marginal note:Review of regulations

    (11.146) In the first review required by subsection (1) after 2027 and every third review that follows, the Minister of Finance and ministers of the Crown from the included provinces shall, as part of the review, also review the regulations made under subsection 113.1(11.144) and the regulations made for the purposes of paragraphs 115(1.1)(d) and (e), and may make recommendations as to whether any of those regulations should be amended.

  • Marginal note:Rates to be published

    (11.15) The Minister of Finance shall publish in the Canada Gazette any amendment to Schedule 1 or 2 deemed to have been made under this section.

  • Marginal note:Non-application of subsection 114(2)

    (12) For greater certainty, subsection 114(2) does not apply to any amendment to Schedule 1 or 2 made under subsection (6), (11.05) to (11.11) or (11.141).

  • Marginal note:Recommendation — adjustment factors

    (13) On the completion of a review required by subsection (2), the Minister of Finance may recommend to the Governor in Council that the Governor in Council amend the regulations made under subsection 46(7) to give effect to any recommendations made under subsection (2). If the recommendations are that no changes be made to the adjustment factors, the Minister of Finance shall cause those recommendations to be published in the Canada Gazette.

  • Marginal note:Changes to adjustment factors — regulations

    (14) The Governor in Council may, on the recommendation of the Minister of Finance made under subsection (13), amend the regulations to change one or more adjustment factors or the methods of calculating them.

  • Marginal note:Provincial consent

    (15) The regulations may only be amended if the lieutenant governor in council of each of at least two thirds of the included provinces, having in total not less than two thirds of the population of all of the included provinces, has signified the consent of that province to the amendment.

  • Marginal note:Definition of included province

    (16) In this section, included province has the same meaning as in subsection 114(1).

  • R.S., 1985, c. 30 (2nd Supp.), s. 56
  • 1991, c. 44, s. 27
  • 1997, c. 40, s. 94
  • 2007, c. 11, s. 12
  • 2009, c. 31, s. 41
  • 2016, c. 14, s. 50
  • 2018, c. 12, s. 401
 
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