LEGISLATION
DRAFT ITA AND ITR AMENDMENTS
The federal government has released draft amendments to the Income Tax Act (ITA) and Income Tax Regulations (along with Explanatory Notes). Comments were requested by September 12, 2025. Effective for tax years ending from and including December 31, 2025, retirement compensation arrangements (RCAs) that supplement registered pension plans will be exempt from the enhanced trust reporting requirements notably the extensive beneficiary disclosure in Schedule 15 to the T3 return, which were introduced in 2023. The CBA advocated successfully for this amendment in a July 2024 submission to the Department of Finance Canada. Other proposed amendments relate to:
- Unclaimed property transfers
- Contributions (non-participating employers; transfer ratios under 1.0)
- Information when determining periods of disability
- Funding additional benefits because of a past service event
- Individual Pension Plans
- Securities lending arrangements
- Technical amendments relating to various types of annuities
- Technical amendments relating to various registered vehicles
- Treatment of US 401(k) plans
ONTARIO SLRA AMENDMENTS INTRODUCED ON BENEFICIARY DESIGNATIONS
Amendments to the Succession Law Reform Act have been introduced that would permit a substitute decision maker of an incapable person (i.e., power of attorney or guardian) to designate the same beneficiary under a successor plan where the original plan to which the designation relates is being converted, renewed, replaced or transferred. This would accommodate situations where the new plan requires its own designation form. Plans would include: pension, retirement, welfare or profit-sharing plans, or plans with respect to the payment of periodic sums, and include RRSPs, RRIFs, home ownership savings plans and TFSAs.
Like a regular designation, the proposed designation could be made electronically in accordance with the Electronic Commerce Act, 2000.
ONTARIO ESA CHANGES: LEAVES OF ABSENCE, EXTENDED LAY-OFFS
The Employment Standards Act, 2000 (ESA) has been amended effective June 19, 2025 to introduce a new long-term illness leave. It provides up to 27 weeks of unpaid leave in a 52-week period for a serious medical condition. The ESA provisions with respect to pension and benefits continuation apply to this new leave.
Amendments have also been introduced to provide a new three-day unpaid job seeking leave for employees affected by a mass termination (i.e., 50 or more employees terminated in a four-week period). ESA provisions with respect to pension and benefits continuation will apply to this new leave as well. Employers could also extend lay-offs for non-unionized employees to 35 or more weeks in any period of 52 consecutive weeks, but less than 52 weeks in any period of 78 consecutive weeks, if approved by the Director of Employment Standards.
REGULATORY UPDATE
OSFI BASIC RATE
The Office of the Superintendent of Financial Institutions has set the Basic Rate for the April 1, 2026 to March 31, 2027 fiscal year at $12.00 per member (unchanged from the current fiscal year). The annual assessment for federally regulated pension plans and pooled registered pension plans is calculated by multiplying the Basic Rate by the number of plan beneficiaries (within a minimum and maximum range).
OSFI 2025-26 DEPARTMENTAL PLAN
The Office of the Superintendent of Financial Institutions (OSFI) has released its 2025-26 Departmental Plan. OSFI’s supervisory target is to have only one federally regulated pension plan whose risk level has increased by two or more levels within a three-month period. In 2023-24, OSFI did not achieve this target (it had to intervene with four DC plans that had outstanding required contributions). The last time OSFI achieved this target was in 2021-22.
UPDATED OSFI GUIDELINE E-23 DOES NOT APPLY TO FEDERALLY REGULATED PENSION PLANS
The Office of the Superintendent of Financial Institutions (OSFI) has released its updated Guideline E-23 – Model Risk Management (2026). It applies only to federally regulated financial institutions, and not to federally regulated pension plans (FRPPs), as originally proposed. As a result, OSFI has also reiterated its expectation that FRPP administrators follow the Canadian Association of Pension Supervisory Authorities’ Guideline No. 10: Guideline for Risk Management for Plan Administrators.
PROPOSED FSRA GUIDANCE ON TARGET BENEFIT MEPP IMPLEMENTATION
The Financial Services Regulatory Authority of Ontario (FSRA) has released its proposed Supervisory Approach Guidance to Implementation of the Target Benefit MEPP Framework, with an October 14, 2025 comment deadline. The proposed Guidance sets out FSRA’s supervisory approach to the new target benefit (TB) framework in three main areas:
- TB conversions, including multi-employer pension plan (MEPP) transfers from another jurisdiction; the application period will run between January 1, 2025 and December 31, 2029 after which, if a plan no longer meets the TB MEPP eligibility criteria, its benefits will become defined benefits and cannot be converted back to target benefits
- Provision for adverse deviation (PfAD), including how the PfAD is determined and supports the MEPP’s funding and benefits policy
- FSRA’s approach to TB supervision, including its focus on issues and MEPPs that pose the highest risk to plan beneficiaries; FSRA may also request enumerated documents from TB MEPP administrators
FSRA DECIDES NOT TO CREATE A NEW FAMILY LAW RULE
Following consultations concluded early last year, the Financial Services Regulatory Authority of Ontario (FSRA) announced that it will not develop a new family law rule to consolidate the family law requirements over which it has rule-making authority. Submissions received during the consultation process have also been posted.
Presumably, FSRA has also decided not to increase the maximum fees for providing a statement of imputed value, which was proposed during the consultations.
FSRA ADMINISTRATIVE UPDATES
The Financial Services Regulatory Authority of Ontario (FSRA) has released various administrative updates, including:
- 2025-2028 Annual Business Plan (sets out FSRA’s priorities, planned activities, and commitments over the following three years, including a proposed budget)
- Ontario Pension Sector Overview and Activities Report (information based on data reported in Annual Information Returns filed for ongoing plans up to December 31, 2024 and, for missing members data only, plans that have wound up or are in the process of winding up)
- Update on retroactive adverse amendments (sets out FSRA’s rationale with respect to various amendments submitted for application, as of March 31, 2025: eight applications were accepted for registration, and nine were not)
- Pension Benefits Guarantee Fund (PBGF) Report for the fiscal year ended March 31, 2025 (indicating that even under the most severe historical scenario (the 2008 Global Financial Crisis) there are sufficient assets to pay potential future claims in the following twelve months)
- 2024 Report on the Funding of Defined Benefit Pension Plans in Ontario (includes data on membership, funded status, solvency funding, fund investments, actuarial assumptions and other matters)
- Quarterly Update on the Estimated Solvency Status of Defined Benefit Pension Plans in Ontario, as of March 31, 2025 (median solvency ratio was 119%, down from 122% during the previous quarter)
ACCOUNTING STANDARDS FOR PRIVATE ENTERPRISES
The Accounting Standards Board (AcSB) has released Detailed Review of Accounting Standards for Private Enterprises (Consultation Paper). Few changes are proposed for Section 3462 of the CPA Canada Handbook (employee future benefits). However, the Board is proposing to develop guidance on the requirement to accrue termination benefits, and related drafting requirements. The submission deadline is January 31, 2026
CASELAW
EMPLOYER SAVINGS PLANS UNDER THE CANADA LABOUR CODE
In WestJet Encore v. ALPA a federal labour arbitrator rejected the Association’s claim that the WestJet Savings Plan, which included a matching RSP/TFSA program and a matching cash savings program, was a “pension” under s. 209.2(1) of the Canada Labour Code. As such, the employer was free to suspend its matching contributions after 52 weeks’ absence, and was not required to continue providing the match for the duration of an employee’s pregnancy or parental leave, which can last for up to 78 weeks under s. 206.2 of the Code. Unlike the situation in Ontario, where a variety of different plans are included in the equivalent definition of pension, RSPs, TFSAs and other savings vehicles or programs are not “pensions” under section 209.2(1) of the Code.
LONG-TERM DISABILITY COVERAGE AFTER AGE 65
In University Health Network v. Ontario Nurses’ Association, an Ontario labour arbitrator held that various impugned provisions of the Employment Standards Act, 2000 and Human Rights Code exempting benefit plans from the general prohibition against age discrimination were saved by section 1 of the Canadian Charter of Rights and Freedoms. As a result, the employer could end long-term disability (LTD) benefit coverage for employees over age 65. The arbitrator also noted that:
- Ontario’s legislation was aligned with similar exclusions in other provinces, where ending LTD coverage at age 65 was the “overwhelming norm”
- Talos v. Grand Erie District School Board (Ontario Human Rights Tribunal, 2018) was distinguished because it dealt with the continuation of benefits other than LTD
- Given limited evidence of the cost of extending LTD benefits beyond age 65, requiring same could undermine existing workplace benefit structures
HBC STAY OF PROCEEDINGS
In In Re Hudson’s Bay Company, the Ontario Superior Court of Justice extended a stay of proceedings under the Companies’ Creditors Arrangement Act until October 31, 2025, in part to allow time for the applicants to pursue pension surplus matters. No further details were provided.
TAXATION
RRSP WITHDRAWALS UNDER THE HOME BUYERS PLAN
In Uppal v. The King, the Tax Court of Canada held that withdrawals from the taxpayers’ RRSPs were eligible withdrawals under the Home Buyers Plan (HBP), despite the value of their RRSPs as of December 31st of the preceding year being zero. The Minister had denied that the withdrawals were eligible under s. 146.01 of the Income Tax Act. However, s. 146.01(2)(d) is a deeming rule to help taxpayers who make withdrawals over the span of more than one calendar year. It operates to deem an amount received in a particular year to have been received by the end of the preceding calendar year, to cure straddling problems and ensure that the later withdrawal qualifies. According to the Court, such a deeming rule is “unconstrained by reality” and so what the Minister characterized as “late” withdrawals were in fact covered by the HBP.
REVIEW OF DEPOSIT INSURANCE FRAMEWORK FOR FEDERALLY REGULATED FINANCIAL INSTITUTIONS
The Department of Finance Canada is reviewing the deposit insurance framework for federally regulated financial institutions. One proposal is to decrease the deposit insurance categories, from nine to four, by merging the six registered and tax-free categories (RRSP, RRIF, TFSA, FHSA, RESP and RDSP) and by making coverage for the new merged category unlimited. Other proposals include increasing the limit per deposit category for retail depositors, to $150,000, and for non-retail depositors, to up to $500,000; and extending coverage for six months and for up to $1,000,000 (or possibly with no limit) for temporary high balances because of significant life events.
REGISTERED PLAN DIRECTORATE NOW ACCEPTS DIGITAL SIGNATURES
The Canada Revenue Agency’s Registered Plans Directorate has confirmed that they now accept digital signatures on all documents and forms, regardless of the submission method (see Acceptance of Digital Signatures - 2025-06-16).
REGISTERED PLAN DIRECTORATE HOSTING FORUM ON NEW DIGITAL PLATFORM
The Canada Revenue Agency’s Registered Plans Directorate announced two forum sessions introducing its new My Registered Plan Account secure digital platform, which among other things will allow plan administrators to view and modify plan information and submit documents. The English language session took place on October 14, but a French language session will take place on October 21 from 1pm to 2pm (click here to register for the French language session).
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