Ottawa, December 14, 2011
2011-134
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The Honourable Ted Menzies, Minister of State (Finance), today announced that the Government released for consultation a package of draft legislative proposals for changes to the Income Tax Act and the Income Tax Regulations to accommodate Pooled Registered Pension Plans (PRPPs).
In December 2010, there was unanimous agreement among provinces, territories and the federal government to move forward with the framework for PRPPs. The rules announced today will set the stage for all provinces to introduce legislation to implement PRPPs.
“I want to thank all our provincial partners for their work and engagement on this file,” said Minister Menzies. “In particular, Quebec has been among our most engaged partners in crafting an innovative, new and low-cost savings option for those without access to a workplace pension plan.”
PRPPs will be a broad-based, low-cost, defined contribution pension vehicle that will be available to employers, employees and self-employed individuals.
“The Government of Quebec welcomes the federal government’s decision to quickly make changes to tax legislation to accommodate PRPPs. This announcement will allow us to fulfill our commitment made in the 2011–2012 budget to put in place new voluntary retirement savings plans,” said Raymond Bachand, Quebec’s Minister of Finance, Minister of Revenue and Minister responsible for the Montréal region.
The PRPP tax rules have been designed to be simple and straightforward and to promote low-cost plans. They will encourage take-up by employers and ultimately, greater pension coverage among Canadians.
The proposed tax rules for PRPPs will apply to both federally and provincially regulated PRPPs and will operate alongside the Pooled Registered Pension Plans Act.
The attached backgrounder outlines the key measures proposed in today’s package, while explanatory notes provide further details.
Interested parties may submit comments on the package until February 14, 2012. The Government will then proceed with legislation at an early opportunity to implement the amendments, taking into account comments received.
Comments can be sent to PRPPtaxrules-RPACreglesfiscales@fin.gc.ca or to:
Tax Policy Branch
Department of Finance
140 O’Connor Street
Ottawa, Ontario
K1A 0G5
For further information, media may contact:
Bram Sepers
Communications
Office of the Minister of State (Finance)
613-996-7861
Jack Aubry
Media Relations
Department of Finance
613-996-8080
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