Vol. 149, No. 7 — April 8, 2015
SOR/2015-68 March 25, 2015
FINANCIAL ADMINISTRATION ACT
Low-value Amounts Regulations
Whereas, pursuant to paragraphs 155.2(2)(a) (see footnote a) and (c) (see footnote b) of the Financial Administration Act (see footnote c), the Treasury Board is of the opinion that circumstances justify doing so;
LOW-VALUE AMOUNTS REGULATIONS
Definition of “Act”
1. In these Regulations, “Act” means the Financial Administration Act.
Amounts deemed nil
2. For the purposes of subsection 155.2(1) of the Act, the amount is fixed at:
- (a) 99 cents for all amounts payable by Her Majesty in right of Canada under the Canada Pension Plan, the Employment Insurance Act and the Old Age Security Act, as well as any regulations made under those Acts; or
- (b) two dollars in any other case.
Exception — accumulated amounts
3. (1) Despite section 2, the following amounts payable by Her Majesty in right of Canada accumulate for the period referred to in paragraph (2)(a) or (b):
- (a) amounts payable under the Canada Pension Plan, the Canadian Forces Members and Veterans Re-establishment and Compensation Act, the Department of Veteran Affairs Act, the Old Age Security Act, the Pension Act and the War Veterans Allowance Act, as well as any regulations made under those Acts;
- (b) amounts payable under the authority conferred on the Minister of Public Works and Government Services under sections 12 and 13 of the Department of Public Works and Government Services Act;
- (c) amounts payable to officers and non-commissioned members as defined in subsection 2(1) of the National Defence Act and to members as defined in subsection 2(1) of the Royal Canadian Mounted Police Act, on account of salary, wages, pay and pay and allowances; and
- (d) amounts payable under the Canadian Forces Superannuation Act, as well as any regulations made under that Act.
Period of accumulation
(2) The amounts payable accumulate during the following periods:
- (a) in the case of amounts referred to in paragraph (1)(a), for a period of up to 12 months after the day on which they become payable;
- (b) in the case of amounts referred to in paragraphs (1)(b) to (d), for a period of up to 12 months after the day on which they become payable or until the end of the calendar year in which they became payable, whichever comes first.
(3) If at any time during the period referred to in paragraph (2)(a) or (b) the accumulated amount exceeds the applicable threshold, payment will be made within 30 days after that time.
(4) Subject to paragraph 4(d), if the accumulated amount does not exceed the applicable threshold at the end of the period referred to in paragraph (2)(a) or (b), it is deemed nil under subsection 155.2(1) of the Act.
Circumstance for accumulation
(5) For the purposes of subsection (1), only amounts payable to the same recipient that are of the same type or payable under the same program, legislation or regulation may accumulate.
4. Subsection 155.2(1) of the Act does not apply to the following amounts:
- (a) amounts payable by or to Her Majesty in right of Canada in currencies other than Canadian dollars;
- (b) user fees as defined in section 2 the User Fees Act;
- (c) immediate payments in exchange for goods and services; and
- (d) amounts that are requested in writing by the recipient, if the request is sent to the appropriate Minister within 12 months after the day on which the amount becomes payable.
April 1, 2015
5. These Regulations come into force on April 1, 2015.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
The Government of Canada undertakes millions of transactions each year with Canadians and businesses, for both payments and receipts. Some of these transactions are for very low amounts, and the Government estimates that the cost to collect or make such payments is greater than the value of the payments themselves. These low-value payments impose an unnecessary burden on Canadians, businesses and Government.
On December 16, 2014, amendments to the Financial Administration Act related to low-value amounts received royal assent. New section 155.2 deems nil low-value amounts that fall below the threshold established in the Regulations, and as a result, the Government will neither pay nor collect low-value amounts. It excludes from its application amounts owed by Crown corporations to persons other than the Government, amounts payable to Crown corporations by such persons, amounts payable under the Air Travellers Security Charge Act, the Excise Act, 2001, the Excise Tax Act, the Income Tax Act or the Softwood Lumber Products Export Charge Act, 2006, and amounts related to the public debt or to interest on the public debt. The amendments also provide the Treasury Board with the authority to make regulations to set a low-value threshold, to specify circumstances for the accumulation of amounts that would otherwise be deemed to be nil, and to exclude amounts.
Since 2003, the Income Tax Act has contained a $2 threshold, such that payments to and from the Government of that amount or less are deemed to be nil.
The objective of the Low-value Amounts Regulations (the Regulations) is to allow for the more effective and efficient administration of low-value payments to or by the Government of Canada.
The Regulations contain a general threshold of $2 and a threshold of $0.99 for certain payments (employment insurance, Old Age Security and Canada Pension Plan), at or below which amounts will not be collected or paid by the Government. Certain government programs payments (Old Age Security, Canada Pension Plan and benefits to veterans) to vulnerable segments of the population will be accumulated until the threshold is either reached within 12 months and paid or deemed nil otherwise. Low-value payments to the Government will not be accumulated for later collection.
The Regulations also provide the authority to accumulate payroll and pension payments for up to 12 months or at the end of the calendar year, whichever comes first. The Government has traditionally accumulated payroll and pension payments and will continue to do so. Not accumulating pension payments could also have a negative impact on vulnerable pensioners.
The Regulations also contain exclusions from its application, which apply to all departments (that is payments in foreign currency, user fees, point of sale, and payments requested in writing).
The “One-for-One” Rule does not apply to these Regulations, as there is no change in administrative costs to business.
Small business lens
The small business lens does not apply to these Regulations, as there are no costs (or insignificant costs) to small business. All businesses, including small businesses, are expected to benefit from the proposal, given the elimination of requirements to submit low-value payments to the Government of Canada.
The Treasury Board of Canada Secretariat consulted with key federal government departments between October and December 2014. These consultations helped to inform the identification of appropriate thresholds, certain payments that should be accumulated, and exclusions.
The authority to establish the Regulations, in the Financial Administration Act, was included in the Economic Action Plan 2014 Act, No. 2, and was considered by Parliament in the fall of 2014. No comments or concerns were raised with respect to the proposed authority.
A notice to interested parties, articulating the likely contents of the Regulations, including the possible threshold of $2, was published in the Canada Gazette, Part I, on January 3, 2015, followed by a 30-day public comment period. No comments were received.
In Budget 2014, the Government of Canada committed to improving the efficiency of internal government operations. Consistent with this commitment, and with ongoing efforts to ease the burden on Canadians and businesses interacting with their government, the Regulations ensure that low-value payments, as defined in the Regulations, are deemed nil.
The Regulations ensure that the collection and payment of low-value amounts by the Government of Canada will not be made, although specific payments will be accumulated and paid if the threshold is exceeded within 12 months or at the end of the calendar year, whichever comes first. The benefits include a reduction in government costs associated with making payments of $2 or less. It is expected that these Regulations will similarly ease the burden on individuals and businesses submitting payments to the Government of Canada. Costs to the Government include making changes to departmental systems to accommodate the Regulations, which are not expected to be significant. The Government is not intending to profit from the implementation of the Regulations. The Treasury Board Secretariat anticipates that the value of payments that would no longer be paid to the Government would negligibly exceed the value of payments that would no longer be paid by the Government to Canadians and businesses. Overall, given the savings described above, it is anticipated that the proposal will result in an overall net benefit to Canadians.
Implementation, enforcement and service standards
The Regulations will apply to amounts owing to and by the Government as of April 1, 2015. Further information related to the amounts owing to the Government should be addressed to the department requesting payment. Information related to payments from the Government should be addressed to Public Works and Government Services Canada. The Office of the Comptroller General will work with departments on the implementation of these Regulations and provide any necessary support.
Any questions related to the proposed Regulations concerning the elimination of receipt and payment of low-value amounts should be directed to
Financial Management Sector
Office of the Comptroller General
Treasury Board Secretariat