Federal and Provincial Budgets: Highlights for Employees, Trade Unions and Benefit Plans
April 25, 2017
The 2017 Federal Budget was presented by Finance Minister Bill Morneau last month, on March 22, 2017. Though it has far fewer major commitments than the previous budget from 2016, there are still some noteworthy provisions. Most provincial budgets have also been released by now, with Nova Scotia and Ontario being the two exceptions. Read below for a summary of some of the changes relevant to employees, trade unions and benefit plans from the budget proposals to date.
The Employment Insurance (“EI”) Program: A number of changes have increased the scope of EI benefits.
- In line with the Federal Government’s stance on gender equality, EI maternity benefits may now be claimed 12 weeks prior to the individual’s due date, an increase from the previous allowance of 8 weeks prior to the due date.
- Those claiming parental benefits now have the choice to take 18 months of leave at 33% of an individual’s average weekly earnings, or can choose the existing option of 12 months at 55%.
- There is also a new caregiving benefit for those caring for adult family members suffering from a critical illness or injury but who expect a full or partial recovery, which may be claimed for up to 15 weeks. This is in addition to the current 26-week compassionate care leave for those caring for adults with a significant risk of dying.
- The 2017 Budget proposes family members other than parents may share the benefits available for time spent caring for a critically ill or injured child, currently set at 35 weeks.
- A new measure allowing individuals on EI benefits to pursue training programs in order to make themselves more employable was proposed but does not have an expected start date as of yet.
Though EI premiums will remain stable at $1.63 per $100 of insurable earnings for 2017, the Federal Budget did announce a $0.05 increase to both employer and employee premiums effective January 1, 2018.
Federal-Sector Employees: The Federal Budget proposes amendments to the Canada Labour Code which would also affect parental and critical care leave in line with the EI changes outlined above. In addition, amendments would provide for several new kinds of unpaid leaves of absence, including for participation in indigenous practices and for seeking care for victims of family violence. The Budget also introduces new rights for employees to request flexible work arrangements and for unpaid federal interns to be subject to labour standards protections.
T4s of the Times: The Federal Government has confirmed that electronic T4 slips for the 2017 and future tax years will now be accepted and should be considered the standard delivery method for an employee, meaning that the employee’s express consent is not required. However, an employer must still issue a paper T4 slip if an employee requests one or if the employee is on a leave of absence or no longer with the company, and must have privacy safeguards in place to issue the electronic T4s.
Healthcare Initiatives: Further to our blog post earlier this year, there was no change to the taxation of employer-sponsored health plans in the 2017 Budget. However, two provisions may be relevant to employers who sponsor group healthcare plans. First, $140 million has been promised towards improving access to prescription medication. Second, fertility treatments are now eligible for the medical expense tax credit and therefore, are eligible benefits for health and welfare trusts and employee life and health trusts.
Temporary Foreign Worker Program: The Federal Government remains committed to its promise from its 2016 Fall Economic Statement to launch a Global Skills Strategy by mid-2017, and this year committed an additional $7.8 million over two years to implement a new Global Talent Stream under the Temporary Foreign Worker Program. This will add several new categories of work permit, including short-term permits of no more than 30 days in a year. Relatedly, amendments to the Immigration and Refugee Protection Act attempt to increase the responsiveness of both the Express Entry system and application fees in general.
Investing in Skills: The 2017 Federal Budget emphasized the importance of growing Canada’s workforce competitiveness on the global stage. To that end, it will invest $225 over four years to establish an organization supporting skills development and measurement in Canada. This organization will work not just with the provincial and territorial governments but also with businesses, educational institutions, and not-for-profit organizations. As well, the Federal Government hopes to create over 10,000 learning placements over the next five years, having pledged $221 million in the 2017 budget. This is an increase from the $73 million invested in last year’s budget.
Reducing personal health contributions: The British Columbia Budget made changes to its Medical Services Plan. A new method of calculating premiums under the Medical Services Plan took effect on January 1, 2017. Effective starting January 1, 2018, premiums will be reduced by 50% for households receiving premium assistance, and for registered households with annual net incomes under $120,000. British Columbia is working towards the eventual elimination of all premiums for its Medical Service Plan. The Quebec Budget also set out that the Personal Health Contributions, now eliminated, that were paid in 2016 will be refunded through the 2016 tax returns.
Raising the Basic Personal Amount: Both the Québec Budget and the Prince Edward Island Budget provide for an increase in the Basic Personal Amount income tax exemption. PEI accomplished this by increasing its basic personal income tax exemption by 2%, and Québec will raise the basic tax credit from $11,635 to $14,890 for 2017.
Group Insurance Premiums subject to PST: The Saskatchewan Budget reduces personal tax rates by 0.25% in all three brackets and instead raises the Provincial Sales Tax to 6% from 5%. This increase was effective March 23, 2017. Importantly, this new higher sales tax will apply to all insurance premiums as defined in the Saskatchewan Insurance Act effective July 1, 2017. This includes life, accident, and health insurance, and would apply to the premiums paid on or after the effective date regardless of the policy issue date.
This post was authored by members of Koskie Minsky’s Pension Department.
Pension and Benefits