Canada Pension Plan and Employment Insurance Explained

Administration of the Canada Pension Plan and the Employment Insurance Act

Introduction

The Canada Revenue Agency (CRA) and Employment and Social Development Canada (ESDC) jointly administer the Canada Pension Plan and Employment Insurance Act. However, each organization has separate and distinct roles and responsibilities.

The CRA's responsibilities

Under the Canada Pension Plan and the Employment Insurance Act, the CRA is responsible for determining:

  • whether or not an individual's employment is pensionable under the Canada Pension Plan or insurable under the Employment Insurance Act;
  • the amount of pensionable or insurable earnings;
  • whether or not Canada Pension Plan (CPP) contributions and employment insurance (EI) premiums are payable;
  • how many hours an insured person has in insurable employment;
  • how long an employment lasts, including the dates on which the employment began and ended;
  • the amount of CPP contributions and EI premiums payable;
  • who is the employer;
  • whether or not employers are considered to be associated for the purposes of the Employment Insurance Act; and
  • the refund amount.

The CRA is also responsible for ensuring that CPP contributions and EI premiums are deducted, remitted, and reported as required by legislation.

ESDC's responsibilities

Under the Canada Pension Plan and the Employment Insurance ActESDC is responsible for:

  • determining an individual's eligibility for CPP or EI benefits;
  • processing individual claims for CPP and EI benefits;
  • setting the annual EI premium rate;
  • monitoring the socio-economic impact of the CPP and EI legislation;
  • amending the regulations made under the Canada Pension Plan and the Employment Insurance Act; and
  • keeping a record of each individual's CPP contributions and pensionable earnings.

Please note that the Employment Insurance Act specifically refers to the Canada Employment Insurance Commission (CEIC) as being responsible for many of the activities listed above. However, the CEIC is an entity under the umbrella of ESDC.

Legislative references

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