Issues Archives

December 15, 2011

Are you thinking of taking CPP early?

The Federal Government is making changes to CPP that will affect your decision. The new rules bring a range of changes to the CPP, including higher penalties for applying before 65, incentives to delay taking your pension until age 70 and an increase in the percentage of low-income years that can be dropped in the calculation of the retirement benefit.

Under the age of 65?

In the past, once you began drawing CPP benefits while continue to work, you no longer had to make contributions. However, starting in 2012, anyone between the age of 60 and 65 who draws CPP benefits while continuing to work will be obligated to continue making contributions to the plan at the same rate as everyone else. The employer will also be required to make the employer contributions. There is no grandfather clause to exempt those who applied before the new rules take effect. For example, if you applied for benefits in 2009 when you were 60 and are still earning income, you will have to start paying into the plan again as of January 2012. You will get credit for these contributions as they will fund your Post Retirement Benefits (ie. will be added to your retirement pension).

Between the age 65 and 70?

If you are between the age of 65 and 70 and you are collecting regular CPP payments while continuing to work, you will be able to choose between continuing to contribute to the plan or ceasing contributions. If you decide to continue to contribute, you will receive increased Post Retirement Benefits. If you wish to opt out, you will need to complete an election form (Form CPT30- Election to Stop Contributing to the Canada Pension Plan or Revocation of a Prior Election).

As these new rules take effect in January 2012, if you wish to elect to opt out of CPP contributions, you must submit the election form to your employer by the end of December 2011. If you do not make the December 2011 deadline, your employer will be required to continue to withhold CPP from your pay in January 2012 and every month thereafter until the election form is filed.

For more information on the changes to CPP, please visit CPP Changes .

December 15, 2011

Do not have a company pension plan?

The Department of Finance introduced legislation to implement the federal portion of the Pooled Registered Pension Plan (PRPP) framework. Provincial legislation is still required to make the PRPP framework fully operational. The retirement savings initiative is aimed specifically at small business companies.

The purpose of the PRPP is the address the gap in the retirement income system resulting from some Canadians who are at risk of undersaving for retirement due to not having an employer sponsored pension plan and/or not being able to take advantage of the savings opportunities such as the Registered Retirement Savings Plans (RRSPs) and the Tax Free Savings Account (TFSA). The federal-provincial Research Working Group on Retirement Income Adequacy found that participation in employer sponsored pension plans has dropped from 41% in 1997 to 34% in 2007 and participation in RRSPs reached a peak of 45% of the labour force in 1997 before leveling off to 39% in 2008.

According to the government, PRPPs will address this gap in the retirement income system by providing a new, accessible, large-scale and low-cost defined contribution pension option to employers, employees and the self-employed. They will allow individuals who currently may not participate in an employer-sponsored pension plan, such as the self-employed and employees of companies that do not offer a pension plan, to make use of this new option.

The specific tax rules for PRPP is being developed and will apply to both federally and provincially regulated PRPPs . These tax rules are expected to be released "shortly" in draft form for public consultation. It is not known to what extent employers will be able or required to make employer contributions on behalf of their employees. It is not expected that the existing Registered Pension Plan and RRSP contributions and benefits will change as a result of the new PRPP option.

Visit the Department of Finance Canada to learn more about the PRPP .

October 10, 2011

Hiring Credit for Small Business

In the 2011 federal budget, the Hiring Credit for Small Business (HCSB) was created as a one-time credit for small business as a way to stimulate new employment and give small business some relief from the employer’s share of the employment insurance (EI) premiums paid in 2011.

Canada Revenue Agency (CRA) will determine if your business is eligible for the credit. If you are eligible, CRA will calculate and apply the credit to the business’s payroll account. The credit will be applied once CRA processes your 2011 T4 information return.

For more information, please visit Hiring credit for small business (HCSB).

October 10, 2011

Accessibility for Ontarians with Disabilities Act (AODA)

The Accessibility for Ontarians with Disabilities Act (AODA) as enacted in 2005 with the objective of improving accessibility for all Ontarians by 2025. To achieve this, the government has focused on creating accessibility standards in five key areas: customer service (Customer Service Standard), employment, information and communication, transportation and built environment. The Integrated Standard is a regulation that contains three of these standards: employment, information and communication and transportation.

The Customer Service Standard has been adopted and on January 1, 2012, companies with at least one employee will have to:

If a company has at least 20 employees in Ontario, the Customer Service Standard policies, practices and procedures must be in writing and be made available to the public in an accessible format. The company will also have to file an annual accessibility report with the provincial government.

In addition, under the Integrated Standard organizations must comply with the following two requirements by January 1, 2012:

For more information, templates, and useful handbooks, please visit