Regulations Amending the Canada Pension Plan Regulations: SOR/2020-206
Canada Gazette, Part II, Volume 154, Number 20
SOR/2020-206 September 21, 2020
CANADA PENSION PLAN
P.C. 2020-654 September 20, 2020
Her Excellency the Governor General in Council, on the recommendation of the Minister of State (Seniors), pursuant to subsection 89(1) footnote a of the Canada Pension Plan footnote b, makes the annexed Regulations Amending the Canada Pension Plan Regulations.
Regulations Amending the Canada Pension Plan Regulations
1 (1) Subsection 46.2(1) of the Canada Pension Plan Regulations footnote 1 is replaced by the following:
46.2 (1) A beneficiary may submit to the Minister, within the interval between the date of commencement of payment of the benefit and the expiration of 12 months after that date, a request in writing that the benefit be cancelled.
(2) Subsection 46.2(4) of the Regulations is replaced by the following:
(4) If a request referred to in subsection 66.1(2) of the Act is granted under this section, the amount described in that subsection shall be repayable within the time beginning on the granting of the request and ending on the expiration of 12 months following the month in which the request is granted.
Coming into Force
2 These Regulations come into force on the day on which they are registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
The Canada Pension Plan (CPP) provides a retirement pension to individuals who are at least 60 years of age, who contribute to the plan and who apply for the benefit. If an individual applies prior to age 65, the retirement pension is actuarially adjusted downwards for each month taken before reaching 65. If one waits until after 65, the pension is adjusted upwards up to the age of 70. Actuarial adjustments stop at age 70. As such, there is no financial advantage to deferring take up of the retirement pension once one has reached the age of 70. There is a small percentage of individuals who do not apply for their retirement pension even though they are eligible. Recently, the CPP was amended to proactively enroll Canadians who are entitled to a retirement pension under the CPP at age 70 to ensure all Canadian workers receive the benefits to which they are entitled.
The Budget Implementation Act, 2019, No. 1 received royal assent on June 21, 2019. Approximately 40 000 individuals over the age of 70 who are currently missing out on their CPP retirement pension will be proactively enrolled and will begin to receive an average monthly retirement pension of $302 in 2020. In addition, approximately 1 500 Canadian seniors turning age 70 in 2020 will be proactively enrolled, receiving an estimated average monthly retirement pension of $645. By 2040, as many as 4 000 people could be proactively enrolled each year.
In cases where an individual prefers not to receive their CPP benefit (e.g. extra income could disentitle them or reduce entitlement to income-tested benefits such as drug coverage or subsidized housing), the individual may request the cancellation of the benefit under the Canada Pension Plan. The Canada Pension Plan Regulations establish that benefits may be cancelled within six months of the commencement of payment and that any amounts paid to the individual must then be repaid within six months. It is recognized that six months may not be sufficient for individuals to assess the impact of the proactive enrolment on any federal or provincial income-tested benefits and that twelve months would be more reasonable. One may not, however, cancel a retirement pension in favour of a disability pension if the deemed date of disability is in or after the month the retirement pension first became payable.
Provide a longer period for CPP beneficiaries to ascertain if they want to cancel receipt of CPP benefits and to repay benefits already received.
The Regulations Amending the Canada Pension Plan Regulations will extend the cancellation and repayment period of CPP benefits from six months to twelve months. This will extend the period under which a person can choose to cancel a CPP benefit and extend the period of repayment of those cancelled benefits.
No consultations were conducted specifically for the regulatory amendments. However, the two regulatory changes are consequential to legislative amendments introduced in the Budget Implementation Act, 2019, No. 1. These legislative amendments already went through the parliamentary process. This includes committee hearings which regularly invite private citizens, experts, representatives of organizations, public servants and ministers to appear before them in order to elicit information (receive evidence) relevant to the study under consideration. These consultations allowed witnesses to set out and clarify their points of view, including with respect to the regulatory amendments.
Modern treaty obligations and Indigenous engagement and consultation
An assessment has been conducted and no implications have been found with regard to Indigenous peoples. These regulatory amendments do not infringe on modern treaty obligations, as they only increase the amount of time when contributors may choose to cancel their benefits and extends the repayment period.
As the period of benefit cancellation is fixed in regulations, only regulatory amendments can alter that period. Regulations are the only feasible instrument.
Benefits and costs
These two regulatory changes provide contributors with additional flexibility with regard to cancelling their CPP benefits by allowing them to cancel their benefit within twelve months of receipt of the benefit rather than the current restriction of six months. These changes will also extend the period of time to repay any benefits received from six months to twelve months. There are no costs associated with extending the time to cancel a benefit from six months to twelve months or extending the period of repayment.
Small business lens
The small business lens does not apply to the regulatory amendments, as there are no costs on small business.
The one-for-one rule does not apply to the regulatory amendments, as there is no change in administrative costs to business.
Regulatory cooperation and alignment
The regulatory amendments are not related to a work plan or commitment under a formal regulatory cooperation forum.
Strategic environmental assessment
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.
Gender-based analysis plus
No gender-based analysis plus (GBA+) impacts have been identified for the regulatory amendments.
Implementation, compliance and enforcement, and service standards
The amendments come into force upon registration. Service Canada will approve a request to cancel benefits within twelve months of receipt of those benefits rather than the current six months. Service Canada will also extend the repayment period from six to twelve months.
Canada Pension Plan Policy and Legislation
Seniors and Pensions Policy Secretariat
Income Security and Social Development Branch
Employment and Social Development Canada