An Act to amend the Income Tax Act (tax credit for loss of retirement income)

This bill was last introduced in the 40th Parliament, 3rd Session, which ended in March 2011.

This bill was previously introduced in the 40th Parliament, 2nd Session.


André Bellavance  Bloc

Introduced as a private member’s bill. (These don’t often become law.)


In committee (House), as of Oct. 28, 2009
(This bill did not become law.)


This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment amends the Income Tax Act to provide a refundable tax credit to an individual whose employer, and certain employees of that employer, failed to make the contributions required to be made to a registered pension plan.


All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.


Oct. 20, 2010 Failed That Bill C-290, An Act to amend the Income Tax Act (tax credit for loss of retirement income), be concurred in at report stage.
Oct. 28, 2009 Passed That the Bill be now read a second time and referred to the Standing Committee on Finance.

October 18th, 2011 / 11:25 a.m.
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Committee Researcher

Michel Bédard

Are you referring to Bill C-290?

PensionsGovernment Orders

November 23rd, 2010 / 9:30 p.m.
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Yves Lessard Bloc Chambly—Borduas, QC

Mr. Chair, I feel it is important to take part in this take note debate on Canada's retirement income system, especially since workers in my riding and most members' ridings have been affected by a very unfortunate situation in recent years, especially the past three years.

It used to be that we were especially concerned about people who had no private pension coverage. When people without private pension coverage reached retirement age—65 for most people or 60 for people who qualified for the Quebec pension plan—they received public pension benefits, of necessity. But few of them had enough money to retire.

Two things happened. With the economic crisis, the economic structure or the problems experienced by companies weakened many pension funds. But they were also weakened when one of the major stakeholders was denied a role in managing pension funds. In the past 10 years, pensioners themselves have been excluded from managing many plans. When companies started tampering with pension plans to try to refloat them, if I can put it that way, by giving the employer a contribution holiday or restricting coverage, one stakeholder was missing every time. So when it became necessary to take measures, most of the time, they were taken and the people who were affected right away were those who were receiving private pension benefits.

This is a reflex that is relatively normal under the circumstances and abnormal in other situations. It is normal because we have a survival instinct. We tell ourselves that we will be retiring later, so we will have time to make up for the shortfall in the fund. We do not worry about the people who are receiving their pension when we make this decision.

I would like to remind members of two specific examples, Atlas Steels in Sorel and the Jeffrey mine in Asbestos. These people ended up in a situation in which the union and the employer agreed that the employer's contributions could be suspended or, in some cases, they agreed upon exceptional measures that meant that insufficient contributions were being made to the pension fund. At Atlas Steels, in Sorel, pensioners saw their pension benefits cut by 20%, 30%, 40%, 50% or 60%. That is huge. You are entitled to receive an amount every year because you and your employer contributed. But then all of a sudden your pension goes from $27,000 a year to $13,000 or $14,000 a year. That is terrible.

These situations happened—and this has not been brought up yet this evening—because a key player was disregarded, someone with an opinion on such situations and especially on the management of a pension fund.

We introduced Bill C-290 to partially fix this situation by creating a tax credit.

This tax credit would allow anyone whose benefits were cut to recover approximately 22% of the money they lost. That is not very much, but it is still a significant amount for people who do not earn much to begin with. But, contrary to expectations, some of the Liberals voted with the Conservatives to deny workers from Jeffrey mine in Asbestos and Atlas Steels in Sorel the right to this measure, which would have helped alleviate financial difficulties.

This evening we are debating measures to confront the new realities of pension plans. However, there is still some ambiguity because no action is coming out of all this talk.

I would like to give an example of the elements of the public pension system. There is old age security for seniors, which is their income security. For many of them, it is insufficient because it is their only income. So the guaranteed income supplement was created to give seniors a decent income on which to live. But then what happened? Some of the people who are eligible have been beaten up by life and a large number of them are marginalized. Some of them are isolated by poverty, others by their low level of education or training or simply because they do not know their rights or have communication problems.

In 2001, we learned that 183,000 people in Canada were in that situation, including 81,000 people in Quebec. Since then, the Bloc Québécois has been on the attack. Our colleague at the time, Marcel Gagnon from Shawinigan, the member for Saint-Maurice—Champlain, led a crusade that allowed us to find many of these people. However, 42,000 have not yet been reached. So they are the people we are talking about.

Our Conservative colleague was saying earlier that seniors only have to apply once. However, in order to apply that first time, they need to know they are entitled to the supplement. The government, on the other hand, knows they are entitled to it, so why not just give it to them?

Over the years, the government has misappropriated a great deal of money, $3.3 million to be precise, that belongs to some of our most vulnerable seniors. That money belongs to them. We need to start with measures like that one. We also need to look at the possibilities being discussed right now in Quebec by unions and seniors' advocacy groups, which are proposing increasing the income provided by public pensions. In Quebec, some people have suggested doubling the Quebec Pension Plan with appropriate deductions and contributions to make that possible. This would give people who are working and do not have a private pension plan the opportunity to participate in a group plan that will guarantee them at least enough income to live with a little dignity when they retire.

This is what people should take away from this evening's debate: we need to take a close look at what we are doing wrong and remain open to what we can do better.

PensionsGovernment Orders

November 23rd, 2010 / 7:50 p.m.
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Luc Desnoyers Bloc Rivière-des-Mille-Îles, QC

Madam Chair, I think that it is important to talk about retirement today. When we look at the economic crisis we have just gone through, we see that hundreds of thousands of workers have been affected and/or have lost their pension. This has had a serious impact on workers.

When plants close or lay off huge numbers of workers, these people find themselves unemployed or in precarious part-time or temporary jobs. Workers who have been laid off and are in unstable jobs, as I said, can no longer pay into any sort of pension plan. They cannot save any money anymore, because they no longer have enough money to save for a comfortable retirement.

The economic crisis also brought us face to face with a pension crisis, something we had not been confronted with in many years. When I talk about a pension crisis, I am referring to pension plans that have been changed, abandoned and lost. We talked about workers from Nortel, AbitibiBowater, the Jeffrey mine and Atlas Steel, to name a few. We could name dozens and dozens of companies that have been forced to change or abandon plans. For example, Nortel workers are losing their pension plan altogether.

People who are close to retirement and are faced with this sort of situation are in serious trouble, because they cannot retire with sufficient income to allow them to live in dignity, face the future and keep on going.

Right now, there is only one segment of society that can afford a registered retirement savings plan. Roughly 27% of people can afford an RRSP in addition to their regular plan. It is devastating.

The Bloc Québécois has made a number of important demands over the years. The Bloc Québécois has always supported initiatives for retirees and seniors in Quebec. It will continue to support measures that will help retirees and seniors.

One of the many things we have done is introduce Bill C-290, to provide compensation to retired workers who have been cheated and whose pensions are cut off when a former employer declares bankruptcy and fails to fulfill its obligation to contribute to the employees' pension plan.

The Bloc Québécois was dismayed to see this bill defeated by the Liberals and the Conservatives. The bill set out to protect the retirement income of workers at a company in bankruptcy. Once again, the Liberals and Conservatives are demonstrating their profound indifference toward workers, especially retirees.

The Bloc Québécois will ensure that retirees are not cast aside by the Conservative government. We have not stopped promoting to the government a series of solutions to protect retirees. We have presented a solid plan with a number of income protection measures, namely that the federal government follow Quebec's lead and take trusteeship over the pension plans of federally regulated bankrupt businesses. This would prevent these pension funds from being liquidated while the markets are at their lowest. We also proposed introducing preferred creditor status for disabled employees who lose their benefits following an employer's bankruptcy and amending the investment act to keep the threshold for automatic review of foreign acquisitions at $300 million. Such a measure would ensure that companies like Nortel would not be sold off at a discount to the detriment of retirees.

The Bloc Québécois is also making major efforts to improve the GIS.

Another proposal is the elimination of the six-month delay for the wage earner protection program. Thus, victims of massive layoffs followed by delayed bankruptcy would be eligible for the severance they are due.

We are also proposing that the contribution limits for pension funds be increased to 125% of the break-even point. This measure would encourage the establishment of a significant pension reserve. The government went back to this after trying to pass the buck to the provinces.

The Bloc Québécois supports supervision of pension plans subject to federal jurisdiction to help avoid high-risk investments, such as investments in the company. Furthermore, companies with insolvent pension plans because of stock market downturns generally have five years to replenish their funds. To counter the effects of the downturn, the government has increased this time frame to 10 years in order to give companies some breathing room, prevent bankruptcy and protect both workers and pensioners. The Bloc Québécois approved this exceptional measure that fosters the survival of businesses.

We are asking for minimum funding requirements to make pension funds less sensitive to market fluctuations. As we can see, there are a number of proposals that should be added to the government's agenda to improve pension plans, should there be one in future.

Canada and Quebec have various pension plans: old age security, guaranteed income security, the Canada pension plan and the Régime de rentes du Québec, which falls under Quebec's jurisdiction. It is important to respect Quebec's legitimate right to its own pension plan.

A number of citizens' groups, retiree organizations and unions, such as the Canadian Labour Congress and the Fédération des travailleurs et travailleuses du Québec, are calling for significant changes to the Régime de rentes du Québec and the Canada pension plan, as well as an increase in the guaranteed income supplement. They believe it is vital that the government move forward with pension fund security reform. We must heed this request by various organizations and propose important changes.

Only the Canada Pension Plan and the QPP were not affected by the recent economic crisis. Other plans were all affected in different ways. As advocacy groups were saying, the advantage of the CPP and the QPP is that they are transferable, universal and indexed. These groups are calling for benefits to be increased from an average of 25% of a person's salary to 50%, since 25% is clearly insufficient. Doubling benefits would help lift retired workers over the poverty line. When future CPP and QPP benefits are increased, the guaranteed income supplement must also be substantially increased at the same time.

The CPP and QPP are secure, stable and indexed, and their administrative costs are minimal compared to those of financial institutions in Quebec and Canada. Improvements such as these would significantly reduce the incidence of poverty among the seniors and retirees who benefit from these pension plans.

We are saying yes to improvements to the public plan. We must conduct an in-depth review of what is being proposed and ensure that all the necessary analyses are conducted. The Canadian Labour Congress and the federations have approaches worth considering.

In conclusion, the proposal, which involves gradually increasing QPP and CPP benefits by increasing contributions and raising the limit on pensionable earnings, is an approach that should be thoroughly examined. It must be done right, through meaningful consultation—

PensionsGovernment Orders

November 23rd, 2010 / 7:25 p.m.
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Yves Lessard Bloc Chambly—Borduas, QC

Madam Chair, I would like to ask the Conservative member a question about a situation pertaining to private pension plans. One of my fellow members just asked about an aspect of public pension plans, and now it is time to look at private plans.

For economic reasons, some employers were unable to respect private pension plans either in terms of their contributions or the security of funds. We recently introduced Bill C-290, which asked the House to alter tax credits. The purpose of this bill was to help the employees of two companies in particular, the Jeffrey mine in Asbestos and Atlas Stainless Steels in Sorel.

I would like to understand the government's philosophy with regard to the existing protection for private pension plans. I would also like to know how the government intends to help those who lose money on their pensions.

Retirement Income Bill of RightsPrivate Members' Business

November 23rd, 2010 / 6:40 p.m.
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Luc Desnoyers Bloc Rivière-des-Mille-Îles, QC

Madam Speaker, Bill C-574, An Act to promote and strengthen the Canadian retirement income system, “creates a bill of rights for a retirement income system that promotes the goals of adequacy, transparency, affordability, equity, flexibility, security and accessibility for all Canadians”.

The bill introduced by the Liberal member for the Ontario riding of York West establishes a bill of rights that aims primarily to protect individuals who participate in pension plans, whether they are retired or still active in the workforce.

Bill C-574 protects various rights related to pension income, particularly the right to accumulate sufficient pension income and the right to receive complete and accurate information, in a timely fashion, when serious risks become known, specifically, a risk of non-payment or reduction in benefits.

The Bloc Québécois will be proposing an amendment to ensure respect for Quebec's jurisdiction. Private pension plans come under Quebec and provincial jurisdiction, with the exception of federally regulated industries like banking, communications and so on. The same is true of the Quebec pension plan.

The Bloc Québécois wants to avoid any confusion. We believe we must make the necessary amendments to make certain that this bill will not interfere with Quebec's areas of jurisdiction. The Bloc Québécois will propose an amendment to Bill C-574 to ensure that this bill targets only public or private pension plans under federal jurisdiction.

Furthermore, the introduction of this bill is a perfect opportunity to look at the issue of environmental, social and governance risk factors and respect for international treaties.

The Bloc Québécois believes that anyone who contributes to a pension plan cannot conduct a fair analysis of the risks involved unless they are informed of the company's environmental and social responsibility practices in the event that these have an impact on risk and performance.

This is supported by the Canada pension plan and the Caisse de dépôt et placement du Québec, which recognize how important it is for investors to have the information they need regarding the company's environmental, social and governance risk management.

“Corporate behaviour with respect to environmental, social and governance (ESG) factors can generally have a positive influence on long-term financial performance, recognizing that the importance of ESG factors varies across industries, geography and time.

Disclosure is the key that allows investors to better understand, evaluate and assess potential risk and return, including the potential impact of ESG factors on a company's performance.”

And so the Bloc Québécois is proposing the addition of one right, the right to receive information on the retirement fund manager's assessment of social, ethical and environmental criteria during the initial risk analysis for each investment.

Clause 9 states:

Every individual who participates in, contributes to or receives benefits from a retirement income plan shall be entitled to receive, in clear and concise language, all the information the individual requires to understand his or her rights, obligations and choices under the retirement income plan, including...

And this could be amended to include the following:

“Regular disclosure of the list of stocks the retirement fund manager has acquired for the retirement plan. This information may be included in the retirement fund manager's annual report.”

The elected members of the Bloc Québécois, who have always supported demands made by retirees and seniors in Quebec, will continue to support measures that help them.

In addition to numerous other actions we have taken, we introduced Bill C-290, which would offer compensation to shortchanged retirees who are seeing cuts to their pension funds because a former employer has gone bankrupt and is not fulfilling its responsibility to contribute to the pension fund.

The Bloc Québécois is confounded by the rejection by both the Liberals and the Conservatives of its Bill C-290 to protect the retirement income of employees of a bankrupt business.

Once again, the Liberals and the Conservatives are showing their profound indifference towards workers, especially pensioners.

The Bloc Québécois will ensure that pensioners are not ignored by the Conservative government. We have continued to offer the government a series of solutions to protect pensioners. In fact, we have put forward a solid plan with a number of measures to protect their income, one of which would have the federal government follow Quebec's lead and put bankrupt companies' pension plans into trusteeship, when they are under federal jurisdiction. This is done in Quebec, under the Supplemental Pension Plans Act, to prevent these pension funds being liquidated while the markets are at their lowest.

The Quebec pension plan is thus able to take over management of the assets of bankrupt companies' pension plans. The government guarantees the payment of benefits owing to affected employees. However, this amount is adjusted to the solvency level of the pension plans, or their ability to pay all benefits to which contributing employees are entitled.

We have also proposed that preferred creditor status be given to disabled employees who lose their benefits due to a bankruptcy. In times of economic crisis, the declining value of securities diminishes the value of pension funds. If a company goes bankrupt during a downturn, the pension fund will be unable to meet its obligations towards its pensioners. This is not the result of the company defaulting on its normal payments to the pension fund.

Beneficiaries of this type of pension plan provided by companies in financial difficulty have often called for the laws governing bankruptcy to be revised so that pension funds would become preferred creditors in the event of bankruptcy.

The amendment to the investment act in order to maintain the threshold for automatic review of foreign acquisitions at $300 million would ensure that major corporations, like Nortel for instance, are not sold off at the expense of its retired workers. Nortel was sold off piece by piece. The foreign investment act does not force the government to review those transactions. In the case of Nortel, it was a very costly decision, and Nortel's Canadian assets could wind up in the United States and the United Kingdom.

Lastly, I would like to talk about improving the guaranteed income supplement. We are extremely concerned about the fact that over 80,000 Quebec seniors are living below the low-income line. The maximum GIS allowance is not even enough to get seniors out of poverty.

The Bloc Québécois has been working very hard to improve the GIS in order to: increase the guaranteed income supplement by $110 per month; continue paying both pension and survivor benefits, for a period of six months, to a surviving spouse; automatically enrol people over 65 who are eligible for the GIS; ensure full retroactive payment of the GIS for all those who were shortchanged; and increase the surviving spouse's allowance to the same amount as the GIS.

As for the thousands of people who rely on old age security, the federal government has unfairly deprived, and is still depriving, these people of the money owing to them. In order to access the guaranteed income supplement, one must apply. Tens of thousands of seniors in Quebec have been cheated because they did not apply for the GIS as soon as they were eligible.

In closing, the Bloc Québécois supports Bill C-574 in principle , but believes it is important to propose various amendments in order to ensure, above all, that it applies only to federally regulated pensions plans.

Income Tax ActPrivate Members' Business

October 20th, 2010 / 6:25 p.m.
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Francis Scarpaleggia Liberal Lac-Saint-Louis, QC

Mr. Speaker, I rise on a point of order. I would like to register my support for Bill C-290.

Income Tax ActPrivate Members' Business

October 20th, 2010 / 6:15 p.m.
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The Deputy Speaker Conservative Andrew Scheer

The House will now proceed to the taking of the deferred recorded division on the report stage of Bill C-290 under private members' business. The question is on the motion.

The House resumed from October 7 consideration of Bill C-290, as reported (without amendment) from the committee.

TaxationOral Questions

October 20th, 2010 / 3 p.m.
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Earl Dreeshen Conservative Red Deer, AB

Mr. Speaker, later today the House will vote on Bill C-290.

The Bloc-NDP-Liberal coalition supported proposal would let businesses that underfund their own employees' pension plans off the hook, and would cost $10 billion annually for a new scheme to be paid for with higher and higher taxes on Canadians.

These reckless and costly schemes underline why the coalition is bad for our economy. Can the parliamentary secretary please explain the danger of the coalition's tax-and-spend policies?

The House proceeded to the consideration of Bill C-290, An Act to amend the Income Tax Act (tax credit for loss of retirement income), as reported (without amendment) from the committee.

FinanceCommittees of the HouseRoutine Proceedings

June 7th, 2010 / 3:20 p.m.
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James Rajotte Conservative Edmonton—Leduc, AB

Mr. Speaker, I have the honour to present, in both official languages, the second report of the Standing Committee on Finance regarding Bill C-290, An Act to amend the Income Tax Act (tax credit for loss of retirement income).

The committee has studied the bill and has decided to report the bill back to the House without amendments.

June 3rd, 2010 / 4:45 p.m.
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The Chair Conservative James Rajotte

I call this meeting to order, colleagues.

We'll go right to clause-by-clause consideration of Bill C-290. I will call the clauses in order and ask if there's any debate.

(On clause 1)

June 3rd, 2010 / 4 p.m.
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Parliamentary Budget Officer, Library of Parliament

Kevin Page

I think you're right, though. When you are designing legislation and when we are costing legislation, you want to look at behavioural impacts.

In that context, if there were clarity, including clarity on Bill C-290 as to what the intent is and whether we have the legislation right, we would make some assumptions of what the potential behavioural impacts could be.

But other than that, sir, we stay away from policy recommendations.

June 3rd, 2010 / 3:30 p.m.
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Kevin Page Parliamentary Budget Officer, Library of Parliament

Good afternoon.

Thank you, Chair.

I want to thank the committee for the opportunity to appear before you today. FINA members and parliamentarians in general have consistently referred interesting issues to my team, which has kept us busy and challenged.

I have a few brief introductory remarks I would like to make regarding my general process for preparing estimates of the proposed legislative amendments to the Income Tax Act and our specific review of Bill C-290.

Following this, I would be pleased to answer any questions members may have regarding the correspondence I sent to the committee chair on May 14 or any other issues.

I want to begin by outlining the general process by which we prepare cost estimates of legislative amendments to the Income Tax Act proposed by private members. Over the past year, we have received 15 requests and completed 4 cost estimates. All have followed the same general three-step approach.

Step 1 is to prepare terms of reference for the study, which specify timelines, resources and key assumptions to be used. These terms of reference are presented to the requesting parliamentarian or other interested Committee members for approval before any formal work begins.

Step 2 is to identify relevant data, research and expertise that can be used to determine how many taxpayers are currently eligible for the proposed legislative amendment, and how many taxpayers may be induced to change their behaviour to make themselves eligible.

The third step involves completing a reality check with people who actually work in the field and who are familiar with the policy area. After the calculations are completed and the draft report prepared, we then examine whether results are reasonable given what policy experts know about this domain.

For example, when I prepared a recent cost estimate regarding Bill C-466, the tax exemption for public transportation benefits, we benefited from the insight provided by U.S. firms that actually administer the proposed programs and indicated that, depending on how the legislation was worded, administration costs and adoption rates could vary widely. This is the type of real-world knowledge that is very relevant to preparing a cost estimate, but it's not typically collected in the data.

In the case of Bill C-290, we did not progress beyond step one, the preparation of the terms of reference. My staff met with several committee members shortly after receiving the request and completed a review of the cost estimates prepared by the Bloc Québécois and the government by early May.

At that time, it became evident that the divergence between the two cost estimates primarily related to differing legislative interpretations of Bill C-290. The Bloc Québécois believe it to be narrowly targeted, while the government believes it to have a wider application.

The government estimate assumes that all recipients of income from registered pension plans are eligible for a tax credit on pension income. In contrast, the legislative interpretation of the Bloc Québécois assumes that only retirees whose pension income has been reduced as a result of financial distress of the sponsoring firm are eligible for a tax credit on lost pension income.

After determining this, my staff asked the committee to clarify these assumptions and reach a common understanding of precisely which legislative proposal was to be costed. After waiting a week, we sent correspondence to the chair of the committee providing a preliminary assessment of the two cost estimates—$5 million per annum and approximately $10 billion per annum—and again highlighted the need to reach a common understanding regarding the legislative interpretation of Bill C-290 before moving forward with this request.

As noted in my correspondence of May 14, both estimates appear to be free of major errors. While a government estimate of $10 billion appears reasonable, given its assumptions, the Bloc Québécois estimate of $5 million may be near the low end of a range, based on their differing assumptions.

I would like to convey to committee members that we would look forward to continued work on a terms of reference for this request should members provide additional direction with respect to the legislative intent of Bill C-290.

I would be pleased to answer any questions Committee members may have regarding our process for preparing cost estimates of legislative amendments to the Income Tax Act or my preliminary analysis of Bill C-290.

June 3rd, 2010 / 3:30 p.m.
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The Chair Conservative James Rajotte

I call to order the 24th meeting of the Standing Committee on Finance. In our orders today, pursuant to the order of reference of Wednesday, March 3, 2010, we are continuing our study of Bill C-290, An Act to amend the Income Tax Act (tax credit for loss of retirement income).

This afternoon we have a panel from 3:30 until 4:30 and then clause-by-clause consideration from 4:30 to 5:30.

I have two items I want to deal with at the beginning of the meeting. First of all, Monsieur Paillé would like the floor to present a motion.

Monsieur Paillé, s'il vous plaît.