The federal government’s 2022 budget, which set out $56 billion in new spending on Thursday, has a few offerings that could impact employers and employees.
Dental-care program, pharmacare
The budget confirmed the government’s commitment to rolling out a national dental-care program, which was announced in March, by specifying a $5.3-billion investment in its implementation. It also said it will continue its work toward introducing a universal national pharmacare program.
Read: Liberals, NDP to move forward on dental-care program, national pharmacare
“This will include tabling a Canada pharmacare bill and working to have it passed by the end of 2023 and then tasking the Canadian Drug Agency to develop a national formulary of essential medicines and bulk purchasing plan.”
DEI initiatives for federally regulated workplaces
The budget also included $1.9 million in 2022/23 to complete the Employment Equity Act, which aims to promote and improve equality and diversity in federally regulated workplaces. Last summer, it launched a task force to review the act and advise on how to modernize the federal employment equity framework.
It also proposed providing $3.7 million over four years, starting in 2022/23, to the Treasury Board of Canada Secretariat for Black-led engagement, design and implementation of a mental-health fund for Black federal public employees.
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“The 2020 public service employee survey showed that Black federal public servants feel less included in the workplace — a key component of a healthy and safe work environment,” said the budget. “The government is committed to supporting a more equitable, diverse and inclusive workplace for Black public servants across the federal government.”
Building a new EI system
In addition, as Canada’s economy continues to recover from the coronavirus pandemic and emergency programs wind down, the government is consulting with Canadians on what needs to be done to build an employment insurance system that better meets the current and future needs of employers and employees, noted the budget.
“This includes simpler and fairer rules for workers, new ways to support experienced workers transitioning to a new career and coverage for self-employed and gig workers.”
Employee ownership trusts
The budget also announced developments in the creation of employee ownership trusts. Following the government’s commitment in the 2021 budget to engage with stakeholders to examine what barriers exist to the creation of these trusts, the government said the consultations revealed the main barrier as the lack of a dedicated trust vehicle under current tax legislation tailored to the requirements of these structures.
Read: New report backs up calls to bring employee ownership to Canada
The 2022 budget proposed to create the employee ownership trust — a new, dedicated type of trust under the Income Tax Act to support employee ownership. “The government will continue to engage with stakeholders to finalize the development of rules for the employee ownership trust and to assess remaining barriers to the creation of these trusts.”
ESG disclosure, changes at PSP Investments
As well, the budget said the government will move forward with requirements for federally regulated pension plans to disclose environmental, social and governance considerations, including climate-related risks.
And to back up the government’s commitment to continuously improving the governance, transparency and accountability of its pension plans, the budget announced the intention to expand the Public Sector Pension Investment Board from 11 to 13 members, with the board’s new seats to be filled by representatives of federal public service bargaining agents.
Borrowing for DB pensions
In the budget’s supplementary tax measures, the government proposed providing more borrowing flexibility to administrators of registered defined benefit pension plans by maintaining the borrowing rule for real property acquisitions and replacing the 90-day term limit with a limit on the total amount of additional borrowed money (for purposes other than acquiring real property), equal to the lesser of 20 per cent of the value of the plan’s assets (net of unpaid borrowed amounts) and the amount, if any, by which 125 per cent of the plan’s actuarial liabilities exceed the value of the plan’s assets (net of unpaid borrowed amounts).
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“Plan administrators must continue to comply with the provisions of federal or provincial pension benefit standards legislation, which ensure that pension funds are administered with a duty of care, investments are made in a reasonable and prudent manner and the plan is funded in accordance with prescribed funding standards,” said the budget. “These standards are designed to manage the risks to the promised benefits of plan members and ensure the stability of registered pension plans.”
The budget also included the government’s intention to:
- Amend the Canada Labour Code in the coming year to further support federally regulated employees who experience a miscarriage or stillbirth;
- Increase the federal minimum wage to $15.55 per hour;
- Implement a 10 per cent increase to the maximum guaranteed income supplement benefit for single seniors and reverse the announced increase to the eligibility for old-age security benefit and GIS back to age 65 from 67; and
- Provide 10 days of paid sick leave for all federally regulated private sector employees.
Read: Government open to amending paid sick days legislation for federally regulated workers