What's New in Pensions and Benefits – October 2022

i. LEGISLATION

BILL C-19, 2022 FEDERAL BUDGET BILL, RECEIVES ROYAL ASSENT

Bill C-19 received Royal Assent on June 23, 2022 and amends several statutes, including the:

• Pension Benefits Standards Act, 1985: the amendments that will allow a federally regulated defined benefit plan to establish a solvency reserve account, and that will require funding and governance policies, must still be proclaimed into force (supporting regulations must also be drafted)
• Canada Labour Code: original Code amendments under Bill C-3, introducing paid medical leave, as amended, will take effect no later than December 1, 2022 – except for the new provision exempting employers with fewer than 100 employees, which must be proclaimed into force (draft supporting regulations were released on July 16, 2022)
• Canada Pension Plan: amendments with respect to disabled beneficiaries and contributors, and contributors who are family allowance recipients must still be proclaimed into force

BILL C-13 - TO ENHANCE RIGHTS AND DUTIES WITH RESPECT TO THE FRENCH LANGUAGE

Bill C-13 was introduced on March 1, 2022 and is currently in committee. It would enact a new statute, Use of French in Federally Regulated Private Businesses Act, setting out rights and duties with respect to the use of French for federally regulated businesses (except in the broadcast sector). Employees of federally regulated business – unless they elect to subject themselves to Québec’s Charter of the French Language – would have, among other rights, the right to receive all communications and documents in French. These new rights will apply on proclamation to federally regulated businesses in Québec and, two years later, to employees in regions with a “strong francophone presence”.

BILL C-27  - TO INTRODUCE SIGNIFICANT AMENDMENTS TO FEDERAL PRIVACY LEGISLATION

Bill C-27 was introduced on June 16, 2022 and would transfer (often without amendment) the privacy provisions currently contained in the Personal Information Protection and Electronic Documents Act (PIPEDA) to a new privacy statute, the Consumer Privacy Protection Act (CPPA). Unlike PIPEDA, the CPPA would expressly apply to personal information collected, used or disclosed interprovincially or internationally. New consent rules also set out what information must be provided before an individual’s consent is considered valid. Additional situations are outlined where knowledge or consent is not required, while “anonymized information” will be exempt. Organizations must establish a privacy management program, and delete an individual’s personal information on request. Fines would be increased, and individuals provided a private right of action for loss or injury because of an organization’s breach of the CPPA.

BILL C-228 - TO GRANT PRIORITY TO PENSION CLAIMS ON EMPLOYER BANKRUPTCY OR RESTRUCTURING

Bill C-228, an opposition private member’s bill, was introduced on February 3, 2022 and is currently in committee. It would amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to increase the priority given to claims in respect of unfunded liabilities or solvency deficiencies of pension plans, in the event of bankruptcy or restructuring proceedings (as is currently the case for overdue normal cost and employee contributions). It would also amend the Pension Benefits Standards Act, 1985 to allow certain employers to insure some required contributions, and authorize the administrator of an underfunded pension plan in certain situations to transfer or permit the transfer of plan assets or liabilities to another pension plan.

CORRECTING DC CONTRIBUTION ERRORS, AND OTHER FINANCE PROPOSALS

On August 9, 2022, the Department of Finance released two sets of Proposals (including Explanatory Notes) to amend the federal Income Tax Act (ITA) and related legislation. The first set revises earlier proposals relating to fixing DC contribution errors, borrowing by DB pension plans, and reporting requirements for RRSPs and RRIFs (for details, see our Spring 2022 Update). The second set of proposals contains new amendments relating, for example, to Variable Payment Life Annuities, a new Tax-Free First Home Savings Account, shortened life expectancy, and survivor benefits.

The Canada Revenue Agency has also amended Form T215 so that it can be used to report permitted corrective contributions (in addition to past service pension adjustments) and Form T10 so that it can be used to report pension adjustment corrections (in addition to pension adjustment reversals).

ONTARIO’S PAID IDEL EXTENDED TO MARCH 31, 2023

Ontario has again extended, to March 31, 2023 (from July 31, 2022), the period during which an employee can take paid Infectious Disease Emergency Leave (Paid IDEL). This leave allows employees to take up to three days paid leave for reasons relating to COVID‑19. Ontario will continue reimbursing employers for wages paid to a maximum of $200 per day. However, the period during which a temporary layoff will be deemed to be a leave of absence (Deemed IDEL) was not also extended. As a result, starting July 30, 2022 an employee on temporary layoff can again be terminated after a period specified under the Employment Standards Act, 2000, even if their work hours are temporarily eliminated or reduced because of COVID-19.