ARCHIVED — Vol. 147, No. 10 — May 8, 2013

Registration

SOR/2013-83 April 26, 2013

CANADA PENSION PLAN

Regulations Amending the Canada Pension Plan Regulations

P.C. 2013-429 April 25, 2013

His Excellency the Governor General in Council, on the recommendation of the Minister of Human Resources and Skills Development, pursuant to the definition of “wholly or substantially” in subsection 42(1) and to subsection 89(1) (see footnote a) of the Canada Pension Plan (see footnote b), makes the annexed Regulations Amending the Canada Pension Plan Regulations.

REGULATIONS AMENDING THE CANADA
PENSION PLAN REGULATIONS

AMENDMENTS

1. The portion of section 41 of the Canada Pension Plan Regulations (see footnote 1) before paragraph (a) is amended by replacing “clause 53(b)(ii)(A)” with “clause 53(1)(b)(ii)(A)”.

2. Paragraph 52(k.1) of the Regulations is repealed.

3. Section 54.3 of the Regulations and the heading before it are repealed.

COMING INTO FORCE

4. These Regulations come into force on April 30, 2013.

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issue

The Canada Pension Plan Regulations (CPP Regulations) prescribe the manner in which the work cessation test is assessed for retirement pension applicants under age 65. The test was repealed from the Canada Pension Plan (CPP) effective January 1, 2012; therefore, this provision of the CPP Regulations is no longer applicable. To continue to have this provision in the CPP Regulations may result in confusion among retirement pension applicants about which eligibility requirements are applicable. In addition, references to CPP sections in the CPP Regulations are not currently aligned with the renumbered sections of the Act.

Also, the Canada Pension Plan (Social Insurance Numbers) Regulations (CPP [SIN] Regulations) prescribe responsibilities associated with a Social Insurance Number (SIN) card which is no longer required to be issued. As a result, it is proposed to amend these references.

Background

CPP Regulations

To address rising unemployment rates, particularly for younger workers, throughout the 1980s, low-cost policy interventions that provided incentives to older workers to leave the labour market to create opportunities for younger workers were examined. In 1987, the CPP allowed for reduced retirement pensions to be taken as early as age 60. Prior to this change, the earliest age of eligibility was 65. To be eligible for the retirement pension before age 65, a work cessation test was introduced requiring applicants to demonstrate that they had in fact retired from the labour force. 

While youth unemployment continues to be a concern, policymakers have become increasingly focussed on building the foundations for productivity growth. In today’s environment, the ageing of the Canadian population has the potential to adversely impact economic and standard of living growth through its impact on labour supply. In this context, the importance of more fully engaging older workers who want to, and are able to work (as well as other under-represented groups including Aboriginal peoples and persons with disabilities) can contribute to productivity growth and help Canada maintain its standard of living. While recent CPP reforms were not intended specifically to meet these productivity objectives, they do work in tandem with economic policy actions taken by governments in Canada in recent years.

The Economic Recovery Act (stimulus) amended the CPP to eliminate the work cessation test effective January 1, 2012. Retirement is no longer viewed as a point-in-time event, and there was a move to allow for a more phased-in retirement approach. Individuals can now apply to receive their retirement pension before the age of 65 without having to stop working or significantly reduce their earnings, thus providing them with greater flexibility.

CPP (SIN) Regulations

The SIN was created in 1964 as a means to register individuals for federal government programs, namely the Employment Insurance program and the CPP. The Jobs, Growth and Long-term Prosperity Act provided authority to the Canada Employment Insurance Commission (the Commission) to make the production of SIN cards discretionary rather than mandatory. The Commission will exercise this discretion to stop issuing the cards in March 2014. Those cards still in circulation will continue to be valid. After March 2014, SINs will be provided to individuals by letter in the mail. Currently, the CPP (SIN) Regulations refer to the SIN cards.

Objectives

The objectives of these consequential housekeeping proposals are to align the CPP Regulations and CPP (SIN) Regulations with the legislative amendments in the Economic Recovery Act (stimulus) and the Jobs, Growth and Long-term Prosperity Act respectively, and to reconcile inconsistencies for coherence and clarity.

Description

In order to align the CPP Regulations with the legislative changes brought about by the Economic Recovery Act (stimulus), the following regulatory amendments are made:

  • Section 54.3 and paragraph 52(k.1) are repealed. These sections related directly to the work cessation test, which has now been eliminated. Section 54.3 defined “wholly or substantially” in regard to the cessation of paid employment and paragraph 52(k.1) required evidence that a retirement pension applicant under the age of 65 had wholly or substantially ceased to be engaged in paid employment or self-employment.
  • Section 41 of the CPP Regulations is amended to replace the reference to clause 53(b)(ii)(A) with a reference to clause 53(1)(b)(ii)(A) of the CPP, to reflect the addition of a subsection to section 53. Section 41 applies to salary and wages on which a contribution has been made under a provincial pension plan.

In order to align the CPP (SIN) Regulations with the legislative changes brought about by the Jobs, Growth and Long-term Prosperity Act, the following amendments are made:

  • the definition of “Minister of Human Resources Development” is repealed. The definition of “Minister” is already provided in the CPP;
  • the requirement to apply for a new SIN card upon name change is replaced with a requirement for the individual to inform the Minister of his or her new name;
  • the requirement to apply for a new SIN card when a card is lost or destroyed is removed. The Regulations instead indicate that an individual “may” apply for a new card;
  • the requirement to produce a SIN card to an employer is replaced with the requirement to inform the employer of the SIN; and
  • it is clarified that a SIN card may be issued after a SIN has been caused to be assigned by the Minister of Human Resources and Skills Development Canada or by the Minister of National Revenue.

“One-for-One” Rule

The “One-for-One” Rule does not apply to these amendments, as there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to these amendments, as there are no costs to small business.

Rationale

Employers and employees will benefit from clarifying that the physical SIN card no longer needs to be shown. Retirement pension applicants will benefit from clarifying which eligibility requirements are applicable. As well, there will be no costs to any stakeholder because these amendments simply ensure that the Regulations are consistent with the legislative changes.

These consequential housekeeping amendments align the CPP Regulations and the CPP (SIN) Regulations with the legislative amendments, and reconcile inconsistencies for coherence and clarity.

It is expected that these regulatory amendments will be supported by beneficiaries under the administration of the CPP, as there is no real impact on stakeholders.

Contact

Marianna Giordano
Director
CPP Policy and Legislation
Seniors and Pensions Policy Secretariat
Human Resources and Skills Development Canada
355 North River Road
Place Vanier, Tower B, 18th Floor
Ottawa, Ontario
K1A 0L1
Telephone: 613-957-1628
Fax: 613-991-9119
Email: marianna.giordano@hrsdc-rhdcc.gc.ca