Regulatory Initiative: Additional Canada Pension Plan Regulations - Forward Regulatory Plan 2020-2022
Title or working title of the regulatory initiative:
Additional Canada Pension Plan Regulations
Description of the objective:
An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act (Bill C-26), which came into force on March 3, 2017 and made significant enhancements to the Canada Pension Plan (CPP), referenced three issues related to Plan sustainability that must be addressed in regulations:
- the methodology for the actuarial calculation of minimum contribution rates for the CPP Enhancement;
- the acceptable range of these minimum contribution rates vis-à-vis the legislative rates over which the Plan would be considered to be in a sustainable position over the long-run; and,
- the automatic adjustments that would change benefits and/or contribution rates to bring the Plan back to a sustainable position, in the event that minimum contribution rates fall outside their sustainable range and Finance Ministers cannot reach a consensus on Plan changes.
These regulations will aim to ensure that the Plan is appropriately funded and that intergenerational equity is maintained, consistent with the full-funding principle underpinning the CPP Enhancement. The methodology for the calculation of the minimum contribution rates is referenced in paragraphs 115(1.1)(d) and (e) of the Canada Pension Plan. The ranges for the minimum contribution rates and the automatic adjustments are referenced in subsections 113.1(11.141) to (11.143) of the Canada Pension Plan.
Indication of business impacts:
These regulations do not impose any new administrative burden on individuals or businesses. In the unlikely event that the automatic adjustments are triggered, contribution rate increases are possible.
Public consultation opportunities:
Canadians were consulted through pre-publication in the Canada Gazette, Part I, Volume 152, Number 42, on October 20, 2018 (Additional Canada Pension Plan Sustainability Regulations / Calculation of Contribution Rates Regulations, 2018).