Federal Budget 2018

Liberal Finance Minister Bill Morneau tabled the latest Canadian federal budget on February 27, 2018. It’s uncertain when the budget will become law, but several proposed changes may be of interest to employers and sponsors of benefit and pension plans, including:

  • The introduction of legislation implementing the previously announced changes to the Canada Pension Plan
  • Plans to introduce pay equity legislation for employers with employees in federally-regulated sectors including banking, communications, and interprovincial transportation
  • Changes to payments and leaves including amendment of the Canada Labour Code to include five days of paid leave under family violence leave; changes to the Employment Insurance (EI) Parental Leave including additional EI coverage when both parents share the leave; and changes to the Wage Earner Protection Program Act that increase the maximum payment from four to seven weeks of employment insurance insurable earnings
  • The creation of a national pharmacare advisory council to explore ways to increase access to medication
  • A new excise duty on cannabis products (excluding pharmaceutical products with a DIN)
  • A proposal to increase reporting requirements for trusts, which will now will require more comprehensive reporting by certain types of trusts to include identification of settlors, beneficiaries and trustees in T3 returns beginning in 2021
  • National oversight for improved cyber security, including financial institutions
  • The launching of public consultations to address unclaimed pension balances, as well as concerns regarding retirement security in the face of corporate bankruptcies
  • Discussion on personal tax measures, including qualifying plan holders for Registered Disability Savings Plans; expansion of the medical expense credit for expenses incurred in respect of specially trained animals
  • Business Tax Measures that deal with passive investments inside a private corporation, including a proposal to limit the ability of businesses with significant passive investment income to benefit from the small business tax rate, and limits to tax advantages that large Canadian controlled private corporations (CCPCs) can obtain by accessing refundable taxes on the distributions of certain dividends
  • Changes to the deductibility of Employee Contributions to the Enhanced Portion of the Quebec Pension Plan

Complete details about the 2018 budget can be found on the Government of Canada website.