Order Fixing the Day on Which Division 14 of Part 4 of the Budget Implementation Act, 2024, No. 1 Comes into Force: SI/2025-1

Canada Gazette, Part II, Volume 159, Number 1

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SI/2025-1 January 1, 2025

BUDGET IMPLEMENTATION ACT, 2024, NO. 1

Order Fixing the Day on Which Division 14 of Part 4 of the Budget Implementation Act, 2024, No. 1 Comes into Force

P.C. 2024-1319 December 16, 2024

Whereas Division 14 of Part 4 of the Budget Implementation Act, 2024, No. 1, chapter 17 of the Statutes of Canada, 2024, contains provisions that alter or have the effect of altering, either directly or indirectly and either immediately or in the future, the matters referred to in paragraphs 114(4)(a) and (d) of the Canada Pension Plan ^{footnote a};

And whereas the lieutenant governor in council of each of at least two thirds of the included provinces, having in the aggregate not less than two thirds of the population of all of the included provinces, has signified the consent of that province to the enactment;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, under subsection 196(2) of the Budget Implementation Act, 2024, No. 1, chapter 17 of the Statutes of Canada, 2024, fixes the day after the day on which this Order is made as the day on which Division 14 of Part 4 of that Act comes into force, other than subsections 187(1) and (3), sections 191 and 193, subsection 194(2) and section 195, which came into force on assent.

EXPLANATORY NOTE

(This note is not part of the Order.)

Proposal

To bring into force the remaining amendments to the Canada Pension Plan implemented through Budget Implementation Act, 2024, No. 1 (the Act) which were recommended by federal, provincial and territorial ministers of finance through the 2022–2024 CPP triennial review. The Order in Council fixes the day after this order is made as the day on which Division 14 of Part 4 of the Act comes into force, excepting those sections in force as of royal assent.

Objective

To make changes to the Canada Pension Plan (CPP) that provide a top-up to the death benefit for certain individuals, create a new children’s benefit for part-time students and improve other children’s benefits, and end entitlement to a survivor’s benefit following a credit split.

Background

As joint stewards of the CPP, federal and provincial ministers of finance review the CPP every three years to ensure it continues to respond to the needs of retirees, workers and employers.

As part of the 2022–2024 triennial review, Canada’s ministers of finance agreed to make changes to the CPP to improve benefits under the plan. The legislative amendments were made through the Budget Implementation Act, 2024, No. 1, which received royal assent on June 20, 2024, and included

• Top-up to the Death Benefit: Currently, the death benefit provides a one-time, non-indexed lump sum payment of $2,500, usually payable to an estate upon the death of an eligible contributor. This amendment would increase the CPP death benefit payable to $5,000 in cases where the deceased contributor was not paid a retirement pension or disability benefits, and no survivor’s pension is payable in respect of their contributions.
  • The top-up to the Death Benefit will provide a modest return on contributions in cases where no other CPP benefit (except for the orphan’s benefit) has been paid in respect of the deceased’s contributions.
• Creation of a new child’s benefit: CPP children’s benefits provide a monthly flat rate amount to help support the dependent children of those contributors whose work has ceased due to disability or death. Currently, a dependent child aged 18 to 25 must be in school or university full-time to receive the benefit. This amendment creates a new child’s benefit for eligible dependent children of disabled or deceased contributors, who are aged 18 to 25 and in school part-time, and is payable at 50% of the amount available to full-time students. In addition, related regulatory amendments will define “full time” and “part time” attendance in order to determine eligibility for the new benefit.
  • The new benefit recognizes that not all children are able to attend school on a full-time basis.
• Extension of eligibility for the disabled contributor’s child’s benefit: A disabled contributor’s child’s benefit is payable to the child of a contributor who is receiving a CPP disability pension or a post-retirement disability benefit, both of which are payable until age 65. Under the legislation, when these benefits cease at age 65, the disabled contributor’s child’s benefit also ceases. This amendment would allow for the disabled contributor’s child benefit to be extended when the child’s disabled parent reaches age 65 even though the contributor’s disability benefit ceases.
  • Extending eligibility past the parent’s age of 65 addresses the social trend of parenthood starting later in life. It also recognizes that a child’s economic dependence on a disabled parent does not necessarily end when the parent’s disability benefits cease.
• Ineligibility for the survivor’s pension in cases of credit splitting: Starting in 1986, the CPP gave separated spouses access to credit splitting given that the separation signals the end of the spouses’ relationship and economic partnership. However, separated spouses, unlike divorced spouses and former common-law partners, are in the unique position of still being legally married. As such, they are also potentially eligible for a survivor’s pension, which is payable upon the death of a spouse.
  • This amendment makes separated spouses ineligible for the survivor’s pension in cases where there has been a division of pensionable earnings, or “credit split,” with a deceased contributor and ensures that separated spouses are treated the same way as divorced spouses and former common-law partners.

Pursuant to subsection 114(4) of the CPP legislation, the amendments require the consent of at least two thirds of included provinces representing at least two thirds of the population, in order to come into effect. The necessary consent has been obtained.

Implications

The Office of the Chief Actuary has confirmed that the amendments being brought into force through this Order have no impact on the financial sustainability of the plan due to the small number of beneficiaries impacted. While the number of beneficiaries impacted is small, the benefit provided to those impacted is expected to be significant.

The amendments brought into force by this Order will result in greater financial support for the children of persons with disabilities, the children of deceased contributors, and the families/estates of deceased contributors where no other CPP benefit (except for the orphan’s benefit) has been paid in respect of contributions. Projections by the Office of the Chief Actuary show that:

• Between 13 000 and 14 000 death beneficiaries per year will be eligible for the top-up to the Death Benefit going forward.
• The number of children beneficiaries is expected to increase by roughly 8 000 in 2025 and 15 000 in 2050.
• The number of survivor beneficiaries is expected to decrease by roughly 400 in 2025 and by around 8 000 in 2050.

Information regarding the changes to children’s benefits, the top-up to the Death Benefit and ineligibility for the survivor’s pension in certain cases of credit splitting will be published on the CPP website. All physically and electronically published materials (e.g. brochures, info sheets) and communication materials have been updated to ensure that the amendments being brought into force by this Order are properly reflected.

The changes to the CPP legislated through the Budget Implementation Act, 2024, No. 1 will not require increases to legislated contribution rates.

Consultation

As part of the 2022–2024 triennial review, Canada’s ministers of finance agreed to make the amendments being brought into force through this Order to improve benefits under the CPP. These legislative amendments were subject to the Parliamentary process as part of the Budget Implementation Act, 2024, No. 1, which received royal assent on June 20, 2024.

As noted, and pursuant to subsection 114(4) of the Canada Pension Plan, these amendments require the formal consent of at least two thirds of provinces, representing at least two thirds of the population, to come into effect. The necessary formal consent from provinces has been obtained.

Contact

Galen Countryman
Director General
Federal-Provincial Relations Division
Federal-Provincial Relations and Social Policy Branch
Department of Finance
Telephone: 613‑513‑4085
Email: galen.countryman@fin.gc.ca