Pension Related Highlights from the 2016 Federal Budget Announcement

Finance Minister Bill Morneau announced the 2016 federal budget on March 22nd. The budget forecasts big deficits over the next five years, which includes financing a new tax-free monthly child benefit, more money for First Nations, infrastructure spending and extended employment insurance benefits to hard-hit regions.(1)

The pension-related highlights from the budget include:

• The elimination of income splitting with pension income splitting remaining unchanged
• Upcoming consultations to enhance the Canada Pension Plan (CPP) (which will begin over the next couple months)
• Old age security (OAS) eligibility reverting back to age 65 from 67
• The launch of a consultative process to determine the usefulness of the 30 per cent rule (the investment rule that limits pension plans from holding more than 30 per cent of voting shares of a company)
• A proposal to broaden the scope of the government’s ability to enter into mutual agreements with provinces under the Pension Benefits Standard Act (PBSA) (which will allow federal and provincial governments to collaborate to oversee specific pension plans)

For more information on the 2016 federal budget, check out the Government of Canada’s 'Budget in Brief'.

(1)CBC News