A) LEGISLATION
FEDERAL BUDGET BILL INTRODUCED
Bill C-47, Budget Implementation Act, 2023, No. 1, was introduced on April 20, 2023 and is currently at second reading in the House of Commons. Explanatory Notes are also available. It will amend several statutes to implement the following measures:
- Correcting defined contribution errors (ITA and ITR)
- Borrowing limits for defined benefit pension funds (ITR)
- Investment management fees (ITR)
- Variable life benefits/payments (PBSA)
- Variable payment life annuities (ITA and ITR)
- Pension Benefits Guarantee Fund tax exemptions (ITA and ITR)
- Technical PBSA amendments
BILL C-228 RECEIVES ROYAL ASSENT
Bill C-228, the Pension Protection Act, received Royal Asset on April 27, 2023. It amends the federal Bankruptcy and Insolvency Act and Companies’ Creditors Arrangement Act to give super-priority to pension deficits, including priority over secured creditors. The amendments do not apply to a supplemental plan that provides benefits above tax limits or to non-pension post-retirement benefits. They will only take effect four years after Bill C-228 comes into force for an employer or company with an existing defined benefit pension plan. Therefore, they will not apply in relation to these employers or companies until April 27, 2027. The new super-priority for pension deficits may cause lenders to review their approach to underwriting credit for employers or companies with defined benefit pension plans.
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