Marginal note:Review every three years
113.1 (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 or contribution rates or both should be changed.
(2) [Repealed, 1997, c. 40, s. 94]
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,
(ii) the projected revenues into and payments out of the Canada Pension Plan Account,
(iii) the ratio of the projected assets of the Canada Pension Plan over the projected expenditures of the Canada Pension Plan, and
(iv) the changes, if any, to the amounts and ratio projected at the previous review under this section attributable to changing demographic and economic circumstances or to changes to the Canada Pension Plan affecting payments or contributions thereunder;
(c) the financing objective of having a contribution rate 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 Canada Pension Plan at the end of any given year over the projected annual expenditures of the Canada Pension Plan in the following year being generally constant; and
(d) that changes to the Act that increase benefits or add new benefits must be accompanied by a permanent increase in the contribution rates to cover the extra costs of the increased or new benefits and by a temporary increase in the contribution rates 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:Role of Minister when recommendations made
(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 the schedule in accordance with that subsection to give effect to any recommendations made under subsection (1). Where the recommendations made under subsection (1) are that no changes be made to benefits or contribution rates, the Minister of Finance shall cause those recommendations to be published in the Canada Gazette.
Marginal note:Regulation to adjust 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 the schedule to change the contribution rate for employees, employers and self-employed persons for any or all of the years following the review.
Marginal note:Limitation on adjustments
(7) The following shall apply with respect to any adjustment and setting of contribution rates pursuant to subsection (6):
(a) the contribution rate for employees and employers for a year must be identical;
(b) the contribution rate for self-employed persons for a year must be equal to the sum of the contribution rates for employees and employers for that year;
(c) no contribution rate for employees and employers for a year may be increased by more than one-tenth of a percentage point above the contribution rate for the previous year; and
(d) no contribution rate for self-employed persons for a year may be increased by more than two-tenths of a percentage point above the contribution 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.
Marginal note:Interpretation
(11) In subsections (11.01) to (11.03),
- A
- is one half of the contribution rate most recently specified before October 1, 2000 under paragraph 115(1.1)(c) for self-employed persons for 2003; and
- B
- is the contribution rate at October 1, 2000 for employees and employers for 2003.
Marginal note:Where rate is insufficient — 1st case
(11.01) Subject to subsection (11.04), if neither A nor B is greater than 4.95% and A is greater than B, the schedule is deemed to have been amended as of October 2, 2000 to increase the contribution rate for employees and employers for each year after 2002 to A.
Marginal note:Where rate is insufficient — 2nd case
(11.02) Subject to subsection (11.04), if A is greater than 4.95% and B is less than or equal to 4.95%,
(a) the benefits payable in 2001, 2002 and 2003 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) the schedule is deemed to have been amended as of October 2, 2000
(i) to increase the contribution rate for employees and employers for each year after 2002 to the rate determined by the formula
4.95% + 1/2(A - 4.95%)
and
(ii) to increase the contribution rate for self-employed persons for each year after 2002 to twice the contribution rate determined by the formula in subparagraph (i).
Marginal note:Where rate is insufficient — 3rd case
(11.03) Subject to subsection (11.04), if subsections (11.01) and (11.02) do not apply and A is greater than B,
(a) the benefits payable in 2001, 2002 and 2003 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) the schedule is deemed to have been amended as of October 2, 2000
(i) to increase the contribution rate for employees and employers for each year after 2002 to the rate determined by the formula
B + 1/2(A - B)
and
(ii) to increase the contribution rate for self-employed persons for each year after 2002 to twice the contribution rate determined by the formula in subparagraph (i).
Marginal note:Where subsections (11.01) to (11.03) do not apply
(11.04) Subsections (11.01) to (11.03) do not apply where
(a) a recommendation was made under subsection (1) after 1997 that the contribution rates for 2003 and subsequent years be increased and the rates were increased before October 1, 2000 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) after 1997 that the contribution rates for 2003 and subsequent years not be increased and the Minister of Finance before October 1, 2000 has caused that recommendation to be published in the Canada Gazette.
Marginal note:Where rates are insufficient
(11.05) Subject to subsections (11.12) and (11.13), where, after 2002, 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 is less than the contribution rate most recently specified under paragraph 115(1.1)(c) for self-employed persons for those years,
(a) the benefits payable 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) the schedule 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 subsections (11.07) to (11.11),
- A
- is one half of the contribution rate most recently specified under paragraph 115(1.1)(c) for self-employed persons for the years in the three year period referred to in subsection (11.05); and
- B
- is the contribution rate for employees and employers on 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).
Marginal note:Determination of rate — 1st case
(11.07) If neither A nor B is greater than 4.95% and A is greater than B, the contribution rate for employees and employers for each year after the October 1 date referred to in subsection (11.05) is A.
Marginal note:Determination of rate — 2nd case
(11.08) If A is greater than 4.95%, B is less than or equal to 4.95% and the percentage determined by the formula
1/2(A - B)
is less than or equal to 0.1%, 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%)
Marginal note:Determination of rate — 3rd case
(11.09) If A is greater than 4.95%, B is less than or equal to 4.95% and the percentage determined by the formula
1/2(A - B)
is greater than 0.1%, the contribution rate for employees and employers is
(a) for the first year after the October 1 referred to in subsection (11.05), the rate determined by the formula
4.95% + 1/6(A - 4.95%)
(b) for the next year, the rate determined by the formula
4.95% + 1/3(A - 4.95%)
and
(c) for each subsequent year, the rate determined by the formula
4.95% + 1/2(A - 4.95%)
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 - B)
is less than or equal to 0.1%, 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
B + 1/2(A - B)
Marginal note:Determination of rate — 5th case
(11.11) If subsections (11.07) to (11.1) do not apply, the contribution rate for employees and employers is
(a) for the first year after the October 1 referred to in subsection (11.05), the rate determined by the formula
B + 1/6(A - B)
(b) for the next year, the rate determined by the formula
B + 1/3(A - B)
and
(c) for each subsequent year, the rate determined by the formula
B + 1/2(A - B)
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 (11.01) to (11.03) and (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:Rates to be published
(11.15) The Minister of Finance shall publish in the Canada Gazette any amendment to the schedule deemed to have been made under this section.
Marginal note:Application of subsection 114(2)
(12) For greater certainty, subsection 114(2) does not apply to any amendments to the schedule made pursuant to subsection (6) or (11).
Marginal note:Meaning of “included province”
(13) 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
- Date modified: