Canada Pension Plan (R.S.C., 1985, c. C-8)

Year’s Basic Exemption

Marginal note:Amount of Year’s Basic Exemption

• 20 (1) Subject to subsection (2), the amount of a Year’s Basic Exemption is the highest multiple of $100 that is less than or equal to 10% of the Year’s Maximum Pensionable Earnings for the year.

• Marginal note:Limitation

  (2) For each year after 1997 the amount of a Year’s Basic Exemption is $3,500.

DIVISION CCollection of Contributions

Employees and Employers

Marginal note:Amount to be deducted and remitted by employer

• 21 (1) Every employer paying remuneration to an employee employed by the employer at any time in pensionable employment shall deduct from that remuneration as or on account of the employee’s contributions for the year in which the remuneration in respect of the pensionable employment is paid to the employee any amount that is determined in accordance with prescribed rules and shall remit that amount, together with any amount that is prescribed with respect to the contributions required to be made by the employer under this Act, to the Receiver General at any time that is prescribed and, if at that prescribed time the employer is a prescribed person, the remittance shall be made to the account of the Receiver General at a financial institution (within the meaning that would be assigned by the definition financial institution in subsection 190(1) of the Income Tax Act if that definition were read without reference to its paragraphs (d) and (e)).

• Marginal note:Exception — remittance to financial institution

  (1.1) For the purpose of subsection (1), a prescribed person referred to in that subsection is deemed to have remitted an amount to the account of the Receiver General at a financial institution referred to in that subsection if the prescribed person has remitted the amount to the Receiver General at least one day before the day on which the amount is due.

• Marginal note:Liability for failure to deduct and remit

  (2) Subject to subsection (3), every employer who fails to deduct and remit an amount from the remuneration of an employee as and when required under subsection (1) is liable to pay to Her Majesty the whole amount that should have been deducted and remitted from the time it should have been deducted.

• Marginal note:Subsequent decision — limit on liability

  (3) An employer is not liable for any amount that the employer fails to deduct as required by this Act from the remuneration of an employee, or for any interest or penalties for that failure, if

  • (a) the employer is informed in writing in a ruling under section 26.1 that the employer is not required to make the deduction;

  • (b) the ruling is not based on information provided by the employer to the Minister that was incorrect in a material particular; and

  • (c) it is subsequently decided under subsection 27.2(3) or section 28 that the deduction should have been made.

• Marginal note:Payment and deemed notification

  (3.1) Once the decision under subsection 27.2(3) or section 28 is communicated to the employer, the employer is liable without interest or penalties under this Act to pay any contribution required to be paid by the employer with respect to the employee. On payment by the employer of any amount as or on account of that contribution, the employee is deemed to have notified the Minister as required by subsection 15(1.1), 15.1(1.1) or 15.2(1.1) of the employer’s failure to deduct the amount of that contribution from the remuneration of the employee.

• Marginal note:Deduction from subsequent payment of remuneration

  (4) Any employer who fails to deduct an amount that is required by subsection (1) to be deducted from a payment of remuneration to an employee may deduct an amount equal to the amount from any subsequent payment of remuneration made to the employee within 12 months after the making of the payment from which the amount was required to be deducted, but no employer may deduct from a payment of remuneration made to an employee, in addition to the amount required by subsection (1) to be deducted therefrom, any amount with respect to more than one such amount that the employer previously failed to deduct.

• Marginal note:Amount deducted deemed received by employee

  (5) Where an amount has been deducted under subsection (1), it shall be deemed for all purposes to have been received at that time by the employee to whom the remuneration was payable.

• Marginal note:Interest on amounts not remitted

  (6) Where an employer has failed to remit to the Receiver General an amount that the employer was required to remit at the time when he was required to do so, the employer shall pay to the Receiver General interest on that amount at the prescribed rate computed from the day on which the employer was so required to remit the amount to the day of remittance of the amount to the Receiver General.

• Marginal note:Penalty for failure to remit

  (7) Every employer who in a calendar year fails to remit to the Receiver General an amount that the employer is required to remit at the time when he is required to do so is liable to a penalty of

  • (a) subject to paragraph (b), if

    • (i) the Receiver General receives that amount on or before the day it was due, but that amount is not paid in the manner required, three per cent of that amount,

    • (ii) the Receiver General receives that amount

      • (A) no more than three days after it was due, three per cent of that amount,

      • (B) more than three days and no more than five days after it was due, five per cent of that amount, or

      • (C) more than five days and no more than seven days after it was due, seven per cent of that amount, or

    • (iii) that amount is not paid or remitted on or before the seventh day after it was due, ten per cent of that amount; or

  • (b) where at the time of the failure a penalty under this subsection was payable by the employer in respect of an amount that the employer was required to remit during the year and the failure was made knowingly or under circumstances amounting to gross negligence, twenty per cent of the amount.

Marginal note:Excess payment — amount deemed not deducted

• 21.01 (1) Subject to subsection (2), an amount deducted by an employer under subsection 21(1) for a year after 2015 in respect of an excess payment that was paid — as a result of a clerical, administrative or system error — as remuneration to an employee in respect of pensionable employment is deemed not to have been deducted for the purposes of this Act if

  • (a) before the end of the third year after the calendar year in which the amount was deducted,

    • (i) the employer elects to have this section apply in respect of the amount, and

    • (ii) the employee has repaid, or made an arrangement to repay, the employer;

  • (b) the employer has not filed an information return correcting for the excess payment before making the election referred to in subparagraph (a)(i); and

  • (c) any additional conditions specified by the Minister are met.

• Marginal note:Determination of amount

  (2) For the purposes of subsection (1), the amount that is deemed not to have been deducted is the amount that was deducted by the employer or, if the amount determined by the following formula is less than the amount that was deducted by the employer, the amount determined by the formula

  A − B

  where

  A

  is the aggregate of all amounts that were deducted by the employer as the employee’s contributions for the year in question; and

  B

  is the aggregate of all amounts that would have been deducted by the employer as the employee’s contributions for that year had the employer not made the excess payment referred to in subsection (1).

Marginal note:Liability

• 21.1 (1) If an employer who fails to deduct or remit an amount as and when required under subsection 21(1) is a corporation, the persons who were the directors of the corporation at the time when the failure occurred are jointly and severally or solidarily liable, together with the corporation, to pay to Her Majesty that amount and any interest or penalties relating to it.

• Marginal note:Application of Income Tax Act provisions

  (2) Subsections 227.1(2) to (7) of the Income Tax Act apply, with such modifications as the circumstances require, in respect of a director of a corporation referred to in subsection (1).

• Marginal note:Assessment provisions applicable to directors

  (3) The provisions of this Act respecting the assessment of an employer for an amount payable by the employer under this Act and respecting the rights and obligations of an employer so assessed apply in respect of a director of a corporation in respect of an amount payable by the director under subsection (1) in the same manner and to the same extent as if the director were the employer referred to in those provisions.

Marginal note:Minister may assess amount payable

• 22 (1) The Minister may assess an employer for an amount payable by him under this Act, or may re-assess the employer or make additional assessments as the circumstances require, and the expression assessment when used in this Act with reference to any action so taken by the Minister under this section includes any such re-assessment or additional assessment.

• Marginal note:Notice of assessment and liability of employer

  (2) After assessing an employer for an amount payable by him under this Act, the Minister shall send the employer a notice of assessment, and on that notice being sent to the employer, the assessment shall be deemed to be valid and binding, subject to being varied or vacated on appeal under this Act, and the employer is liable to pay to Her Majesty the amount thereof forthwith.

• Marginal note:Limitation on assessments

  (3) Notwithstanding subsection (1) or (2), no assessment, re-assessment or additional assessment of an amount payable by an employer under this Act may be made by the Minister under this section after four years have elapsed from the earliest of the days on or before which any contribution in relation to which that amount is payable should have been paid, unless the employer has made any misrepresentation or committed any fraud in filing any return or in supplying any information pursuant to this Part in relation thereto.

Marginal note:Recovery of contributions, etc., as debt due to Her Majesty

• 23 (1) All contributions, interest, penalties and other amounts payable by a person under this Act are debts due to Her Majesty and recoverable as such in the Federal Court or any other court of competent jurisdiction or in any other manner provided for by this Act.

• Marginal note:Application of Income Tax Act provisions

  (2) Section 160, subsections 161(11) and 220(3.1), (4) and (5), sections 221.1 and 223 to 224.3, subsections 227(9.1) and (10), sections 229, 236 and 244 (except subsections 244(1) and (4)) and subsections 248(7) and (11) of the Income Tax Act apply, with such modifications as the circumstances require, in relation to all contributions, interest, penalties and other amounts payable by a person under this Act, and for the purposes of this subsection,

  • (a) the reference in subsection 224(1.2) of that Act to “subsection 227(10.1) or a similar provision” shall be read as a reference to “section 22 of the Canada Pension Plan”; and

  • (b) subsection 224(1.2) of the Income Tax Act shall apply to employer’s contributions, employee’s contributions, and related interest, penalties or other amounts, subject to subsections 69(1) and 69.1(1) of the Bankruptcy and Insolvency Act and section 11.09 of the Companies’ Creditors Arrangement Act.

• Marginal note:Where amount deducted not remitted

  (3) Where an employer has deducted an amount from the remuneration of an employee as or on account of any contribution required to be made by the employee but has not remitted the amount to the Receiver General, the employer is deemed, notwithstanding any security interest (as defined in subsection 224(1.3) of the Income Tax Act) in the amount so deducted, to hold the amount separate and apart from the property of the employer and from property held by any secured creditor (as defined in subsection 224(1.3) of the Income Tax Act) of that employer that but for the security interest would be property of the employer, in trust for Her Majesty and for payment to Her Majesty in the manner and at the time provided under this Act.

• Marginal note:Extension of trust

  (4) Notwithstanding the Bankruptcy and Insolvency Act (except sections 81.1 and 81.2 of that Act), any other enactment of Canada, any enactment of a province or any other law, where at any time an amount deemed by subsection (3) to be held by an employer in trust for Her Majesty is not paid to Her Majesty in the manner and at the time provided under this Act, property of the employer and property held by any secured creditor (as defined in subsection 224(1.3) of the Income Tax Act) of that employer that but for a security interest (as defined in subsection 224(1.3) of the Income Tax Act) would be property of the employer, equal in value to the amount so deemed to be held in trust is deemed

  • (a) to be held, from the time the amount was deducted by the employer, separate and apart from the property of the employer, in trust for Her Majesty whether or not the property is subject to such a security interest, and

  • (b) to form no part of the estate or property of the employer from the time the amount was so deducted, whether or not the property has in fact been kept separate and apart from the estate or property of the employer and whether or not the property is subject to such a security interest

  and is property beneficially owned by Her Majesty notwithstanding any security interest in such property or in the proceeds thereof, and the proceeds of such property shall be paid to the Receiver General in priority to all such security interests.

• Marginal note:Meaning of security interest

  (4.1) For the purposes of subsections (3) and (4), a security interest does not include a prescribed security interest.

• Marginal note:Certificate before distribution

  (5) Every person, other than a trustee in bankruptcy, who is an assignee, liquidator, receiver, receiver-manager, administrator, executor, liquidator of a succession or any other like person, in this section referred to as the “responsible representative” , administering, winding-up, controlling or otherwise dealing with a property, business or estate of another person, before distributing to one or more persons any property over which he or she has control in his or her capacity as the responsible representative, shall obtain a certificate from the Minister certifying that all amounts

  • (a) for which any employer is liable under this Act up to and including the date of distribution, and

  • (b) for the payment of which the responsible representative is or can reasonably be expected to become liable in his capacity as the responsible representative

  have been paid or that security for the payment thereof has been accepted by the Minister.

• Marginal note:Personal liability

  (5.1) Where a responsible representative distributes to one or more persons property over which he has control in his capacity as the responsible representative, without obtaining a certificate under subsection (5) in respect of the amounts referred to in that subsection, the responsible representative is personally liable for the payment of those amounts to the extent of the value of the property distributed and the Minister may assess the responsible representative therefor in the same manner and with the same effect as an assessment made under section 22.

• Marginal note:Trustee in bankruptcy

  (6) Where an employer has become a bankrupt, the trustee in bankruptcy shall be deemed to be the agent of the bankrupt for all purposes of this Act.

• (7) to (13) [Repealed, 1993, c. 24, s. 154]