Legislative Roundup

Changes in payroll laws and regulations from across Canada
|Canadian Payroll Reporter|Last Updated: 01/05/2015

New Brunswick

Bill proposes changing method for setting minimum wage

The provincial government has introduced legislation that would eliminate the province’s Minimum Wage Board and establish a new method for determining minimum wage rates.

Post-Secondary Education, Training and Labour Minister Francine Landry tabled Bill 3, An Act to Amend the Employment Standards Act, in the Legislative Assembly on Dec. 4. At press time, the legislature had not yet passed the bill.

The amendments would allow the government to review the minimum wage every two years, with the first review occurring by Dec. 31, 2016.

The review would consider the business impacts and socio-economic effects of minimum wage rates, as well as the cost of living and general economic conditions in the province. The review would involve consultations with employers, employees and other stakeholders.

The amendments follow a change in the province’s general minimum wage rate from $10 an hour to $10.30 as of Dec. 31, 2014.

Throne speech hints at income tax hikes

Income tax changes may be coming to the province this year. In a throne speech to open the latest session of the New Brunswick Legislative Assembly, the government announced it plans to increase the amount of income tax paid by the wealthiest one per cent of provincial residents.

It did not provide further details.

The highest tax bracket currently applies to individuals whose annual taxable income is more than $129,975. The tax rate for the bracket is 17.84 per cent.

Nova Scotia

PRPP legislation receives royal assent

The Nova Scotia legislature has passed legislation that will allow for pool registered pension plans (PRPPs) to be established in the province.

PRPPs are similar to defined contribution pension plans, but are administered by a third party (such as a financial institution) that holds assets for many employees in multiple businesses. This allows the members to "pool" their contributions with the aim of having lower administrative fees. The plans are designed to provide a way of saving for retirement for individuals without workplace pension plans.

Participation in the plans is voluntary. If an employer chooses to sign up for a PRPP, it automatically enrolls employees in it, with an option for them to opt out. Employers deduct employee PRPP contributions at source and remit them to the plan administrator. Employers are not required to contribute to the plan, but can choose to do so.

Finance Minister Diana Whalen tabled Bill 38, the Pooled Registered Pension Plans Act, in the legislature on Oct. 15. The bill received royal assent on Nov. 20. The government has not yet announced an in-force date. Once the legislation is in effect, plan administrators can begin to offer PRPPs.

Nova Scotia joins the federal government and the governments of Alberta, British Columbia and Saskatchewan in passing PRPP legislation. Quebec has passed legislation for a similar plan called a voluntary retirement savings plan.

Ontario

Province tables ORPP legislation

The provincial government has introduced legislation to set up a new mandatory provincial pension plan, called the Ontario Retirement Pension Plan (ORPP), by 2017.

Mitzie Hunter, associate finance minister responsible for the ORPP, tabled Bill 56, the Ontario Retirement Pension Plan Act, 2014, in the Legislative Assembly on Dec. 8. At press time, the bill had not yet become law.

The bill would require the government to introduce further legislation to establish an administrative body to run the ORPP, including enrolling eligible employers and employees, collecting contributions for the plan, investing the contributions and paying retirement benefits.

The government announced its intention to establish the ORPP in last year’s budget, saying the plan is necessary to help provincial residents save more for their retirement. The ORPP would be similar to the Canada Pension Plan (CPP) and would operate in addition to it. Employers and employees required to contribute to the ORPP would still have to pay into the CPP.

The ORPP would be for individuals employed in eligible employment in Ontario who are at least 18 years old, but under 70, and who do not take part in a comparable workplace pension plan, as well as their employers. All employment in the province would be eligible employment unless exempted.

Further legislation will specify the types of pension plans that would be comparable and the types of employment that would be exempted. The exemptions would be similar to the ones under the CPP.

Both employers and employees covered by the plan would be required to contribute to it through employee source deductions and accompanying employer contributions. Employers would be responsible for remitting the contributions to the administrative body that would be set up to manage the plan. The contribution rate would be no more than 1.9 per cent for employees and employers, for a combined rate of 3.8 per cent. The bill proposes that contribution rates be phased in. The phase-in rules would be part of further legislation.

The bill also proposes a minimum and maximum threshold for contributing to the plan. The annual maximum earnings threshold would be set at $90,000, adjusted to reflect the percentage increase in the annual maximum pensionable earnings for the CPP between 2014 and 2017. The minimum threshold would be specified in further legislation, although it is expected to be similar to the $3,500 exemption that applies for the CPP.

The bill would give the finance minister the authority to request and collect information from employers, public bodies and the federal government on the number of employees employed by an employer, the age, gender and type of employment for employees and the annual salary and wages payable to employees. Employers would be required to provide the information within 30 days of being asked for it. Employers that failed to comply or who knowingly provided false information would be guilty of an offence.

In addition to the legislation, the government is holding consultations on the ORPP.

Bill would allow for PRPPs

The provincial government has tabled legislation to allow for pooled registered pension plans (PRPPs) to be set up in Ontario.

Finance Minister Charles Sousa introduced Bill 57, the Pooled Registered Pension Plans Act, 2014, in the Legislative Assembly on Dec. 8. At press time, the bill not yet become law.

PRPPs provide a way of saving for retirement for individuals who do not have employer-sponsored pension plans or who are self-employed. They would be administered by a third party (such as a financial institution) who would hold assets for many employees in multiple businesses, allowing members to "pool" their pension plan contributions.

The bill would essentially incorporate provisions of the federal Pooled Registered Pension Plans Act, with changes where necessary. As with the federal Act, Bill 57 proposes that participation in the plans be voluntary. Employers would have the option of signing up for a plan.

Employers that choose to sign up would automatically enroll employees in the PRPP, but give them the option to opt out. Employers would deduct employee contributions for the PRPP at source and remit them to the plan administrator. Employers could choose to match employee contributions, but it would not be mandatory.