REFERENCE GUIDE To Canadian Benefits | 2020 - Gallagher

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REFERENCE GUIDE To Canadian Benefits | 2020 - Gallagher
REFERENCE GUIDE
To Canadian Benefits | 2020
REFERENCE GUIDE To Canadian Benefits | 2020 - Gallagher
Table of Contents
SUMMARIES OF UPCOMING ENHANCEMENTS FOR THE CPP........3                                                                         WORKERS’ COMPENSATION BENEFITS.............................................. 13
       Phase 1—Increasing Employee and Employer Contributions...........3                                                       MATERNITY AND PARENTAL LEAVES AND THE REQUIRED
SUMMARIES OF UPCOMING ENHANCEMENTS FOR THE QPP.......4                                                                          EXTENSION OF GROUP BENEFITS ....................................................... 14

CANADA PENSION PLAN/QUEBEC PENSION PLAN/OLD                                                                                     A NOTE ON OTHER FEDERAL AND PROVINCIAL LEAVES
AGE SECURITY..............................................................................................5                     OF ABSENCE................................................................................................ 14
       Maximum Monthly OAS Benefits...................................................................5                         TAXES............................................................................................................ 22
       Contributions 2020...............................................................................................5
                                                                                                                                        Sales Tax on Group Insurance Plans..........................................................22
       Maximum Monthly Benefit 2020.................................................................. 6
                                                                                                                                        Employer Contributions to Group Benefits...........................................22
       Maximum Contribution Limits for RRSPs, and
                                                                                                                                        Premium Tax..........................................................................................................23
       Defined Contribution RPPs and DPSPs..................................................... 6
                                                                                                                                        Harmonized Sales Tax (HST).........................................................................23
       Withholding Tax......................................................................................................7
       CPP/QPP Disability Benefits.............................................................................7                PROVINCIAL MEDICARE PROGRAMS................................................. 24

EMPLOYMENT INSURANCE.......................................................................8                                            Hospital Coverage..............................................................................................24
                                                                                                                                        Out of Country.....................................................................................................24
       Regular, Sickness and Family-Related Benefits..................................... 8
                                                                                                                                        Medical Care..........................................................................................................24
       Premium Rates for EI—All of Canada, Except Quebec...................... 9
                                                                                                                                        Prescription Drugs (Out of Hospital)........................................................24
       Premium Rates for EI—Quebec..................................................................... 9
       Quebec Parental Insurance Plan (QPIP)...................................................10
       Premium Reduction Program......................................................................... 11
       Reminder About the Premium Reduction Program (PRP)
       and Applicable Transition Period ................................................................12
Summaries of Upcoming Enhancements for the CPP
2020 Canada Pension Plan Enhancements                                             Phase 1—Increasing Employee and Employer Contributions
                                                                                  Under the enhanced CPP program, the contribution rate will gradually
Announced January 2019, the Canada Pension Plan (CPP)
                                                                                  increase from 4.95% to 5.95% over the next four years.
contributions will gradually increase over a seven-year period. Today,
CPP benefits replace about 25% of employees’ pre-retirement income                                  Employee/Employer                     Self-Employed/Total
up to an annual maximum. Under the enhanced plan, they’ll replace                  Year                Contribution                           Contribution

closer to 33% up to the maximum.                                                   2020                  5.25% each                               10.50%
                                                                                   2021                  5.45% each                               10.90%
What Are the Major Changes to CPP?
                                                                                   2022                  5.70% each                               11.40%
Eligibility guidelines for CPP will stay the same under the enhanced plan.
                                                                                   2023                  5.95% each                               11.90%
However, the amount employees and employers contribute will increase,
and these higher contributions will result in higher retirement, disability       Employees and employers contribute on employment earnings
and survivor benefits. The CPP enhancement will be gradually                      between $3,500 and the annual pensionable earnings limit, which is
implemented in two phases over the next seven years. Phase 1 will go              adjusted each year. In 2020, the annual pensionable earnings
from 2019 to 2023 while Phase 2 will commence in 2024. This summary               maximum increases to $58,700 (from $57,400 in 2019).
will focus on Phase 1 information and will be updated with Phase 2 as we          The CPP will undergo additional contribution changes in 2024. We
get closer to 2024.                                                               will provide an update on this information as we get closer to the
                                                                                  effective date.
                                                                                  For more information, please visit the Government of Canada website: https://www.
                                                                                  canada.ca/en/revenue-agency/news/2018/10/the-canada-pension-plan-enhancement--
                                                                                  businesses-individuals-and-self-employed-what-it-means-for-you.html

                                                                              3
Summaries of Upcoming Enhancements for the QPP
2020 Quebec Pension Plan Enhancements                                            Also similar to the CPP, the QPP will undergo additional contribution
                                                                                 changes in 2024. We will provide an update on this information as we
Similar to CPP, starting January 1, 2020, the Quebec Pension Plan will
                                                                                 get closer to the effective date.
be enhanced by the application of the two following plans:

1.   The Base Plan (the current plan): Employees and employers each                                         Annual Earnings Less Than the MPE
     contribute 5.40% for the portion of earnings between $3,500 (the              Year            Base Plan             Additional Plan               Total
     basic exemption) and the maximum pensionable earnings (MPE).                 2020               5.40%                    0.30%                    5.70%

2.   The Additional Plan: Between 2020 and 2023, additional                       2021               5.40%                    0.50%                   5.90%

     contributions will be paid by employees and employers according              2022               5.40%                    0.75%                    6.15%
     to a gradually increasing rate as defined in the table at right. This        2023               5.40%                    1.00%                   6.40%
     additional contribution will provide a rate increase that will allow
                                                                                 For more information, please visit Retraite Quebec:
     an individual’s pre-retirement income rate that is used for benefits        https://www.rrq.gouv.qc.ca/en/programmes/regime_rentes/bonification/Pages/regime-
     eligibility to increase from the current amount of 25% to 33.33%,           supplementaire.aspx.

     up to the annual maximum.

                                                                             4
Canada Pension Plan/Quebec Pension Plan/Old Age Security
Maximum Monthly OAS Benefits                                                                      Contributions 2020
JANUARY–MARCH 2020                                                                                                                                 CPP                     QPP
Benefits are adjusted for inflation every January, April, July and                                 Year’s Maximum Pensionable
                                                                                                                                                            $58,700
October. To obtain current amounts, call 1.800.277.9914.                                           Earnings (YMPE)
                                                                                                   Year’s Basic Exemption (YBE)                                 $3,500
                                              Maximum                  Maximum
 Benefit                                    Monthly Benefit          Annual Income*                MAXIMUM ANNUAL CONTRIBUTION RATE*
                                                                                                   Employee                                       5.25%                   5.70%
 OLD AGE SECURITY PENSION
                                                                                                   Employer                                       5.25%                   5.70%
 Allowance (age 65 and over)                       $613.53                 $128,137**
 Allowance (age 60-64)                            $1,165.16                 $34,416                Self-employed                                 10.50%                   11.40%

 Allowance for survivor                          $1,388.92                 $25,056                 MAXIMUM ANNUAL CONTRIBUTION
 GUARANTEED INCOME SUPPLEMENT                                                                      Employee                                     $2,898.00                $3,146.40

 Single                                            $916.38                 $18,600                 Employer                                     $2,898.00                $3,146.40
 Spouse of non-pensioner                           $916.38                 $44,592                 Self-employed                                $5,796.00                $6,292.80
 Spouse of pensioner                               $551.63                 $24,576
                                                                                                  *Percentage of employment earnings up to the YMPE less YBE.
 Spouse of allowance recipient                     $551.63                 $44,592

*Pensioners are not eligible for benefits if their income, or the combined income including
their spouse, is more than the maximum shown. The income level cutoffs do not include the
OAS pension and the first $3,500 of employment income.

**Note: Pensioners with an individual net income above $79,054 per annum must repay part
or all of the maximum Old Age Security pension amount. The full pension is eliminated when
net income is $128,137 or more.

                                                                                              5
Maximum Monthly Benefit 2020                                                             Maximum Contribution Limits for RRSPs, and
                    Type of Benefit                            CPP         QPP           Defined Contribution RPPs and DPSPs

 Retirement Pension (at age 65)                              $1,175.83   $1,177.30                                               2019                                2020
                                                                                          RRSP                     Lesser of 18% of prior               Lesser of 18% of prior
 DISABILITY BENEFIT
                                                                                                                   year’s earned income or              year’s earned income or
 Contributor (maximum)                                       $1,387.66   $1,388.46                                 $26,500 minus the PA*                $27,230 minus the PA*
                                                                                                                   plus any unused RRSP                 plus any unused RRSP
 Each child                                                   $255.03     $80.97                                   contribution room                    contribution room
 SURVIVOR BENEFIT (spouse)*                                                               Defined                  Lesser of 18% of eligible            Lesser of 18% of eligible
                                                                                          Contribution RPP         compensation or $27,230              compensation or $27,830
 65 and older                                                $705.50     $706.65
                                                                                          DPSP**                   Lesser of 18% of eligible            Lesser of 18% of eligible
 64 and under (maximum)                                       $638.28     $947.70                                  compensation or $13,615              compensation or $13,915
 Under 45 (disabled)                                          $638.28     $947.70         TFSA***                  $6,000; unused              $6,000; unused contribution
                                                                                                                   contribution and withdrawal and withdrawal amounts
 Under 45 (not disabled with dependent child)                 $638.28     $911.55                                  amounts carried forward     carried forward
 Under 45 (not disabled without dependent child)              $638.28     $571.48
                                                                                         *A Pension Adjustment (PA) applies to members of an RPP or DPSP, and reduces his or her
 ORPHAN BENEFIT                                               $255.03     $255.03        RRSP contribution level.

 DEATH BENEFIT (maximum lump sum)                            $2,500.00   $2,500.00       **Employees cannot contribute to a DPSP. The maximum an employer can contribute is 50%
                                                                                         of an individual’s defined contribution RPP amount.
*May differ for survivor on regular or disability pension.
                                                                                         ***The annual TFSA dollar limit will be indexed to the inflation rate. The contribution limit will
                                                                                         be increased only when the cumulative indexing results in an increase rounded to the nearest
                                                                                         $500 increment.

                                                                                     6
Withholding Tax                                                           CPP/QPP Disability Benefits
Withholding tax on lump-sum and RRSP payments                                                              CPP                      QPP
                     Provinces Other
                                                 Quebec                    Waiting Period               Four Months             Four Months
                      Than Quebec
 Amount                Federal Tax     Federal   Provincial   Total        MONTHLY PAYMENT
 Up to $5,000             10%            5%         15%       20%                                A flat amount of $496.36 (CPP) or $496.33 (QPP)
                                                                           Contributor           plus 75% of retirement pension. Maximum $1,362.30
 $5,001 to $15,000        20%           10%         15%       25%                                (CPP) and $1,362.27 (QPP).

 $15,001+                 30%           15%         15%       30%          Child (Under 18)              $255.03                   $80.97

                                                                      7
Employment Insurance
Regular, Sickness and Family-Related Benefits                                    EI Maximum
                                                                                                              $54,200 annually.
Employment Insurance (EI) benefits are paid to workers who have lost             Insurable Earnings

their jobs and are available for work, but cannot find employment.               Benefit Waiting Period       Maximum of seven consecutive days.

Sickness benefits are paid to those who have left work due to sickness or                                     55% of average weekly insurable earnings to a maximum of
                                                                                 Benefit Level and            $573 per week, following a waiting period of seven consecutive
injury. Family-related EI benefits are paid to workers who take time off         Maximum                      days. Claimants with children and a family income under $25,921
                                                                                                              per year will be entitled to a family income supplement.
work due to specific life events: maternity/parental leave, compassionate
                                                                                 Minimum Number of            420 to 700 depending on unemployment rate in the region; 600
care and family caregiver leaves.
                                                                                 Hours Required               hours of employment for sickness and family-related benefits.

                                                                                                              Period ranging from 14 to a maximum of 45 weeks (depending on
                                                                                 Maximum Period for           regional unemployment rate) and up to 70 weeks for long-tenured
                                                                                 Regular Benefits             employees. 50 weeks combined with compassionate care, sickness,
                                                                                                              maternity, parental or family caregiver benefits.

                                                                                 Maximum Period for
                                                                                                              15 weeks
                                                                                 Sickness Benefits
                                                                                                              Maternity: 15 weeks
                                                                                                              Standard parental benefits: 35 weeks within a 52-week period
                                                                                                              (weekly benefit rate is 55%).
                                                                                                              Extended parental benefits: 61 weeks within a 78-week period
                                                                                 Maximum Period               (weekly benefit rate is 33%).
                                                                                 for Family-Related           Compassionate care: 26 weeks within a 52-week period. 102
                                                                                 Benefits                     weeks combined with sickness, maternity/parental and/or family
                                                                                                              caregiver benefits.
                                                                                                              Family caregiver benefit for children: 35 weeks in a
                                                                                                              52-week period.
                                                                                                              Family caregiver benefit for adults: 15 weeks in a 52-week period.
                                                                                *The province of Quebec is responsible for providing maternity, paternity, parental and
                                                                                adoption benefits to residents of Quebec as indicated on p. 8 of this guide.
                                                                            8
Premium Rates for EI—All of Canada, Except Quebec

                   Maximum                  Rates per $100 of Insurable Earnings                       Annual Contribution Maximum
 Year          Insurable Earnings          Employee (%)               Employer (%)*                 Employee                    Employer*
 2016                 $50,800                  1.88                         2.632                    $955.04                    $1,337.06
 2017                 $51,300                  1.63                         2.282                    $836.19                     $1,170.67
 2018                 $51,700                  1.66                         2.324                    $858.22                     $1,201.51
 2019                 $53,100                  1.62                         2.268                    $860.22                    $1,204.31
 2020                 $54,200                  1.58                         2.212                    $856.36                    $1,198.90

*1.4 times the employee premium.

Premium Rates for EI—Quebec
Rates in Quebec are less than the federal EI rates because Quebec employees and employers with employees in Quebec also contribute to the
Quebec Parental Insurance Plan (QPIP). Premiums are a combination of the federal EI rate noted below plus the QPIP rate. See p. 10 for QPIP rates
and information.

                   Maximum                  Rates per $100 of Insurable Earnings                       Annual Contribution Maximum
 Year          Insurable Earnings          Employee (%)               Employer (%)*                 Employee                    Employer*
 2016                 $50,800                  1.52                         2.128                    $772.16                    $1,081.02
 2017                 $51,300                  1.27                         1.778                    $651.51                      $912.11
 2018                 $51,700                  1.30                         1.820                    $672.10                     $940.94
 2019                 $53,100                  1.25                         1.75                     $663.75                     $929.25
 2020                 $54,200                  1.20                         1.68                     $650.40                     $910.56

*1.4 times the employee premium.                                        9
Quebec Parental Insurance Plan (QPIP)
The QPIP provides benefits similar to the EI benefits, with some additions and modifications. Employees choose from either the basic or special
plan, which provide a percentage of average weekly income. Benefits are as follows:

                                                                                                  Basic: 18 weeks of benefits at 70%
 Maternity (for mother only)
                                                                                                  Special: 15 weeks of benefits at 75%
                                                                                                  Basic: 5 weeks of benefits at 70%
 Paternity (for father only)
                                                                                                  Special: 3 weeks of benefits at 75%
                                                                                                  Basic: 32 weeks of benefits
 Parental (for mother and/or father)                                                              First 7 weeks: 70% remainder—55%
                                                                                                  Special: 25 weeks of benefits at 75%
                                                                                                  Basic: 37 weeks of benefits
 Adoption (for mother and/or father)                                                              First 12 weeks: 70% remainder—55%
                                                                                                  Special: 28 weeks of benefits at 75%

There is no waiting period before the benefits begin.

                    Maximum                                 Rates per $100 of Insurable Earnings                                  Annual Contribution Maximum
 Year           Insurable Earnings                          Employee                         Employer                          Employee                Employer
 2016                   $71,500                               $0.548                          $0.767                            $391.82                 $548.41
 2017                   $72,500                               $0.548                          $0.767                            $397.30                 $556.08
 2018                   $74,000                               $0.548                          $0.767                            $405.52                 $567.58
 2019                   $76,500                               $0.526                          $0.736                            $402.39                 $563.04
 2020                   $78,500                               $0.494                          $0.692                            $387.79                 $543.22

This QPIP contribution is in addition to the EI annual contribution displayed on the p. 9.

                                                                                             10
Premium Reduction Program
Under the Employment Insurance (EI) Act and the EI regulations, an employer’s EI premiums may be reduced when employees are covered by a
qualified short-term disability plan that reduces EI benefits that would be payable if such a plan did not exist.

To qualify for a reduction, the employer must:

• Apply for a reduction

• Provide short-term disability coverage that meets the requirements of the program

• Demonstrate that at least five-twelfths of the reduction will be passed on to the employees covered by their approved plan

• Remit to Canada Revenue Agency (CRA) under separate payroll deduction accounts, if necessary

The reduction for a registered and approved short-term disability plan with a maximum payment period of at least 15 weeks compares as follows:

 Sample (Based on Category 3 Plan)*                                          2020 Rate
 Employee Premium                                                            $1.58 per $100 of insurable earnings ($1.20 in Quebec)
 Employer Premium Multiple Without a Registered Plan                         1.4 times the employee premium
 Employer Premium Multiple With a Registered Plan                            1.171 times the employee premium (1.098 in Quebec)

*Category 3 is one of four plans that qualify for an EI premium reduction.

Employers with employees residing in multiple provinces, inside and outside Quebec, can obtain new premium rates by calling 1.800.561.7923.

                                                                                                11
Reminder About the Premium Reduction Program (PRP)
and Applicable Transition Period
In June 2016, the federal government adopted a change in the EI              At the end of the transitional period, all affected employers’ short-term
program benefit waiting period, reducing the two-week period to one          disability plans will need to be in compliance with the amended
week. This change went into effect on January 1, 2017.                       elimination period standard in order to retain their premium reduction.
                                                                             The government will be communicating with employers that participate
Employers with existing qualifying plans that do not meet the new
                                                                             in the PRP (or have an eligible SUB plan) to provide details about the
standard no longer qualify to participate in the PRP. To address this
                                                                             legislative changes and the transition period.
concern, the government implemented a four-year transitional period
to January 2, 2021, to provide affected employers with time to make          Employers sponsoring only long-term disability plans designed to
adjustments to their short-term disability plan to meet the new              coincide with the prior EI 17-week waiting period should consider
standard. In the meantime, affected employers continue to qualify to         amending the long-term disability program to avoid a one-week gap
participate in the PRP and receive a premium reduction during the            in benefits.
transitional period.

                                                                        12
Workers’ Compensation Benefits
Wage loss, permanent disability and survivor benefits are available to                             Workers’ Compensation Benefits 2020
claimants as a result of work-related injury or disease-related legislation                                                           Maximum Assessable
                                                                                   Province                Percentage of Earnings
specific to each province and territory. Employer contributions are                                                                        Earnings
calculated as a percentage of insurable earnings, and vary by province             Alberta                       90% of net                $98,700
and territory. Visit the Association of Workers’ Compensation Boards of            British Columbia              90% of net                $87,100
Canada website at www.awcbc.org for links to WCBs across Canada.                   Manitoba                      90% of net                $127,000
Wage loss, permanent disability and survivor benefits are available to             New Brunswick                 85% of net                $66,200
claimants as a result of work-related injury or disease-related legislation        Newfoundland                  80% of net                $66,980
specific to each province and territory. Employer contributions are                NWT/Nunavut                   90% of net                $94,500
calculated as a percentage of insurable earnings, and vary by province
                                                                                                            75% of net for first 26
                                                                                   Nova Scotia                                             $62,000
and territory. Visit the Association of Workers’ Compensation Boards of                                       weeks, then 85%
Canada website at www.awcbc.org for links to WCBs across Canada.                   Ontario                       85% of net                $95,400
                                                                                   Prince Edward Island          85% of net                $55,300
                                                                                   Quebec                        90% of net                $78,500
                                                                                   Saskatchewan                  90% of net                $88,906
                                                                                   Yukon                          75% gross                $90,750

                                                                              13
Maternity and Parental Leaves and the Required Extension of
Group Benefits
Canadian provincial and federal employment standards legislation sets              Canadian legislation requires the employer to reinstate employees in
out the rights and obligations of employees and employers by stipulating           the position they occupied before the leave, or to provide them with
minimum standards on human resources management issues, such as                    alternative work of a comparable nature. This document also notes the
hours of work, vacation with pay and job-protected leaves.                         employer’s obligation to extend group benefit coverage during the
                                                                                   leave period.
This document provides a summary of job-protected leaves provided
to employees eligible for maternity and/or parental leave in Canada.               This summary is for general use and informational purposes only. It is
Quebec is the only province that provides a paternity leave for fathers            not intended to provide legal advice. Legislation governing these
(including adopting fathers).                                                      benefits are subject to change from time to time.

A Note on Other Federal and Provincial Leaves of Absence
During 2018, there were several changes with provincial leaves of                  For these reasons, it is imperative that employers examine not only the
absence due to the federal government’s December 2017 increase in EI               federal and provincial leaves concerning maternity and parental leaves,
benefits. In an attempt to establish uniformity, many provinces                    but also look at any other potentially related provincial leave provisions
responded by updating their respective leave policies. Not only did this           that may require compliance. Best practice would be for employers to
increase result in changes to existing provincial maternity and parental           develop written leave policies that address the coordination of any
leaves, as listed in pages 15–21, but it also resulted in the establishment        required leaves of absence.
of new leaves of absence, such as domestic violence, compassionate                 For more information about these programs, refer to your
care extensions and many others.                                                   jurisdiction website.

                                                                              14
Summary
Province                                             Duration of Job-Protected Leave                                    Extension of Group Benefits Requirement
Alberta                              Maternity or pregnancy leave for 16 weeks.                                  The legislation does not require employers to extend
                                                                                                                 group benefits during the leave period.
                                     Parental leave for up to 62 weeks.
http://work.alberta.ca/employment-
standards/maternity-and-parental-    Parental leave may be taken by one parent or shared between two             *Unless stated in employment contract or collective agreement.
leave.html                           parents, but the total combined leave cannot exceed 62 weeks.

                                     • Maximum combined maternity and parental leave is 78 weeks.

British Columbia                     Maternity or pregnancy leave for 17 weeks.                                  The legislation requires that all group benefit coverage
                                                                                                                 must continue during the leave period, unless the
https://www2.gov.bc.ca/gov/          • Maternity or pregnancy leave may be extended for up to six additional     employee decides to discontinue paying his or her share
content/employment-business/           weeks if the birth mother is unable to return to work due to birth-       of the premiums during the leave.
employment-standards-advice/           related health issues or termination of pregnancy.
employment-standards/time-off/       Parental leave up to 62 weeks.
leaves-of-absence
                                     • Birth mothers who have taken maternity leave are eligible for up to
                                       61 weeks, which must begin immediately after the end of their
                                       maternity leave.

                                     • Birth mothers who have not taken a pregnancy leave, birth fathers
                                       and/or adoptive parents are eligible for up to 62 weeks of parental
                                       leave. This initial period may be extended for another five consecutive
                                       weeks if the child requires an additional period of parental care.

                                                                                 15
Summary
Province                                                   Duration of Job-Protected Leave                                  Extension of Group Benefits Requirement
Manitoba                                   Maternity or pregnancy leave for 17 weeks.                                The legislation does not require employers to extend
                                                                                                                     group benefits during the leave period.
                                           Parental leave for 63 weeks.
https://www.gov.mb.ca/labour/
standards                                  • Birth parents and/or adoptive parents are eligible for up to 63 weeks   *Unless stated in employment contract or collective agreement.
                                             of parental leave.

                                           • Parental leave may be taken by one parent or shared between two
                                             parents, but the total combined leave cannot exceed 63 weeks.

New Brunswick                              Maternity or pregnancy leave for 17 weeks.                                The legislation does not require employers to extend
                                                                                                                     group benefits during the leave period.
                                           Parental (child care) leave for 62 weeks.
https://www2.gnb.ca/content/dam/
gnb/Departments/petl-epft/PDF/es/          • Parental leave may be taken by one parent or shared between two         *Unless stated in employment contract or collective agreement.
FactSheets/MaternityChildCareLeave.pdf       parents, but the total combined leave cannot exceed 62 weeks.

                                           • Birth mothers may take up to 61 weeks of parental leave immediately
                                             following maternity leave for a combined maximum of 78 weeks.

                                           • Birth fathers and/or adoptive parents are eligible for up to 62 weeks
                                             of parental leave.

Newfoundland & Labrador                    Maternity, pregnancy or adoption leave for 17 weeks.                      The legislation does not require employers to extend
                                                                                                                     group benefits during the leave period.
                                           Parental leave for 61 weeks.
https://www.aesl.gov.nl.ca/publications/
labour/labour_relations_work.pdf           • Birth parents and/or adoptive parents are eligible for up to 61 weeks   *Unless stated in employment contract or collective agreement.
                                             of parental leave.

                                                                                       16
Summary
Province                                                  Duration of Job-Protected Leave                                  Extension of Group Benefits Requirement
Northwest Territories                     Maternity or pregnancy leave for 17 weeks.                                The legislation does not require employers to extend
                                                                                                                    group benefits during the leave period.
                                          Parental leave for 61 weeks.
https://www.justice.gov.nt.ca/en/files/
legislation/employment-standards/         • Birth parents and/or adoptive parents are eligible for up to 61 weeks   *Unless stated in employment contract or collective agreement.
employment-standards.a.pdf                  of parental leave.
(starting on page 26)
                                          • Parental leave may be taken by one parent or shared between two
                                            parents, but the total combined leave cannot exceed 61 weeks.

                                          • The total amount of maternity and parental leave combined cannot
                                            exceed 69 weeks.

Nova Scotia                               Maternity or pregnancy leave for 16 weeks.                                The legislation requires the employer to provide the
                                                                                                                    employee with the option to maintain group benefit
                                          Parental leave for up to 77 weeks.
https://novascotia.ca/lae/                                                                                          coverage in writing.
employmentrights/leaveparentcourt.        • Birth mothers may take up to 61 weeks of parental leave immediately     If the employee opts to maintain group benefit
asp#qpreg                                   following maternity leave for a combined maximum of 77 weeks.           coverage during the leave, the employee may be
                                                                                                                    required to pay the entire cost of the benefit plan,
                                          • Birth fathers and/or adoptive parents are eligible for up to 77 weeks   including the employer’s share.
                                            of parental leave.

                                                                                      17
Summary
Province                                                Duration of Job-Protected Leave                                Extension of Group Benefits Requirement
Nunavut                                 Maternity or pregnancy leave for 17 weeks.                              The legislation does not require employers to extend
                                                                                                                group benefits during the leave period.
                                        Parental leave for up to 37 weeks.
http://www.nu-lsco.ca/faq-s
                                        • Birth mothers may take up to 35 weeks of parental leave immediately   *Unless stated in employment contract or collective agreement.
                                          following maternity leave for a combined maximum of 52 weeks.

                                        • Birth mothers who do not take pregnancy leave, birth fathers and/or
                                          adoptive parents are eligible for up to 37 weeks of parental leave.

Ontario                                 Maternity or pregnancy leave for 17 weeks.                              The legislation requires that all group benefit coverage
                                                                                                                must continue during the leave, unless the employee
                                        Parental leave for up to 63 weeks.
https://www.ontario.ca/document/your-                                                                           advises the employer in writing of his or her decision
guide-employment-standards-act-0/       • Birth mothers may take up to 61 weeks of parental leave immediately   to discontinue paying his or her share of the premiums
pregnancy-and-parental-leave              following pregnancy leave for a combined maximum of 78 weeks.         during the leave.

                                        • Birth mothers who do not take pregnancy leave, birth fathers and/or
                                          adoptive parents are eligible for up to 63 weeks of parental leave.

                                                                                  18
Summary
Province                                                    Duration of Job-Protected Leave                                 Extension of Group Benefits Requirement
Prince Edward Island                       Maternity or pregnancy leave for 17 weeks.                                 The legislation requires the employer to provide the
                                                                                                                      employee with the option to maintain group benefit
                                           Parental leave for 62 weeks.
https://www.princeedwardisland.                                                                                       coverage in writing. If the employee chooses to
ca/en/information/workforce-               • The total combined leave for maternity and parental leave for the        continue their group benefits, the employee must
and-advanced-learning/                       birth mother cannot exceed 78 weeks.                                     agree to pay both the employee’s and employer’s
maternityparentaladoption-leave                                                                                       share of the cost.
                                           • The combined adoption leave for both parents cannot exceed 62 weeks.

                                           • Leaves can be extended by an additional 5 weeks if the newborn child
                                             has a physical, psychological or emotional condition that requires
                                             additional parental care.

Quebec                                     Maternity or pregnancy leave for 18 weeks.                                 The legislation requires that all group benefit coverage
                                                                                                                      must continue during the leave, unless the employee
                                           Leave for a spouse (birth or adoption) up to five days.
https://www.quebec.ca/                                                                                                decides to discontinue paying his or her share of the
services-quebec/parent/                    Paternity leave up to five weeks is available to birth fathers only.       premiums during the leave.
                                           Parental leave for 52 weeks.
For information in English: https://www.
cnt.gouv.qc.ca/en/menus/pages-pivot/       • Each parent or adoptive parent is entitled to a parental leave up to
pivot-1-conges-et-absences/index.html        52 weeks.

                                           • The parental leave is in addition to maternity and paternity leaves.

                                           • A person who adopts the child of his or her spouse is also entitled to
                                             the parental leave.

                                                                                       19
Summary
Province                                                Duration of Job-Protected Leave                                    Extension of Group Benefits Requirement
Saskatchewan                            Maternity, pregnancy or adoption leave for 19 weeks.                        The legislation requires employees to have the option
                                                                                                                    of maintaining their group benefits while on leave. If the
                                        An additional 6 weeks can be taken if the employee is unable
https://www.saskatchewan.ca/business/                                                                               employee chooses to continue their group benefits, the
                                        to work after the expiration of the maternity leave for medical
employment-standards/vacations-                                                                                     employee may be required to pay both the employee’s
                                        reasons.
holidays-leaves-and-absences/                                                                                       and employer’s share of the cost.
leaves-family-medical-and-service/      Parental leave for up to 63 weeks.
family-leave
                                        • Birth mothers and primary care adoptive parents who have taken the
                                          maternity or adoption leave are eligible for 59 weeks of parental leave
                                          for a combined total leave of 77 weeks.

                                        • Birth or adoptive parents who have not taken a maternity or adoption
                                          leave are eligible for parental leave up to 63 weeks.

Yukon                                   Maternity or pregnancy leave for 17 weeks.                                  The legislation does not require employers to extend
                                                                                                                    group benefits during the leave period.
                                        Parental leave for 37 weeks.
http://www.community.gov.yk.ca/
pdf/Employment_Standards_FAQ_           • Parental leave can be taken wholly by one spouse or be shared by          *Unless stated in employment contract or collective agreement.
May_2017.pdf                              both, but the cumulative total of the leave cannot exceed a
                                          continuous period of 37 weeks.

                                                                                   20
Summary
Province                                             Duration of Job-Protected Leave                                  Extension of Group Benefits Requirement
Federally Regulated Employers        Maternity or pregnancy leave for 17 weeks.                                 The legislation requires that all group benefit coverage
                                                                                                                must continue during the leave, unless the employee
                                     Parental leave for up to 63 weeks.
https://www.canada.ca/en/                                                                                       decides to discontinue paying his or her share of the
employment-social-development/       • Total duration of the maternity and the parental leaves must not         premiums during the leave.
services/labour-standards/reports/     exceed 78 weeks.
maternity-leave.html
                                     • If both parents work for an employer falling under the jurisdiction of
                                       the code, the two parents are entitled to combined parental leave of
                                       up to 63 weeks. Parents have the option of taking their parental leave
                                       at the same time or one after the other, as long as the total combined
                                       parental leave does not exceed 63 weeks.

                                                                                21
Taxes
Sales Tax on Group Insurance Plans                                                          Employer Contributions to Group Benefits
Applicable based on corporate site locations or residency of plan                           (Tax-deductible business expense for the employer)
member, depending on the employer/employee premium cost-sharing
                                                                                                                                       Is the Premium               Are Benefit
arrangement.                                                                                                                              Taxable to             Payments Taxable
                                                                                             Group Benefit                               Employees?               to Employees?
 Ontario               8% on net group insurance cost
                                                                                             Employee Life Insurance                           Yes                         No
 Quebec                9% on net group insurance cost
                                                                                             Dependent Life Insurance                          Yes                         No
 Manitoba              7% on net group insurance cost*
                                                                                             AD&D                                              Yes                         No
 All Other             Not applicable
                                                                                             Critical Illness                                  Yes                         No
7% on premiums for group life insurance, short and long-term disability, critical            Short-Term Disability                             No                       No/Yes*
illness and AD&D (does not include premiums for health, dental, long-term care
                                                                                             Long-Term Disability                              No                       No/Yes*
or annuities).
                                                                                             Medical                                  No; yes in Quebec                    No
*This reflects the taxation on most insured and self-insured programs. However, some         Dental                                   No; yes in Quebec                    No
variations exist.
                                                                                             Employee Assistance Program                       No                          No
                                                                                             Health Spending Account                  No; yes in Quebec                    No

                                                                                            *Disability payments are taxable to the employee if the employer pays a portion of the
                                                                                            premium for short-term disability and/or long-term disability.

                                                                                            See www.cra.gc.ca for further information.

                                                                                       22
Premium Tax                                                                      Harmonized Sales Tax (HST)
(Based on residency of plan members)                                             Applies to: Federal “place of supply” rules affecting employers with
                                                                                 operations in more than one province. These rules determine whether
                                   Premium Tax
                                                                                 an employer is charged HST or GST.
                                  Rate on Group
                                    Insurance                                                                    Premium Tax
 Province                           Premiums                                                                    Rate on Group
 BC, Manitoba, New                                                                                                Insurance
                                        2.0%
 Brunswick, Ontario, Yukon                                                        Province                        Premiums
 Alberta, Nova Scotia,                                                            BC, Manitoba, New
                                                                                                                     2.0%
 Nunavut, Saskatchewan,                 3.0%                                      Brunswick, Ontario, Yukon
 Northwest Territories
                                                                                  Alberta, Nova Scotia,
 Newfoundland                           5.0%                                      Nunavut, Saskatchewan,             3.0%
                                                                                  Northwest Territories
 Prince Edward Island                  3.75%
                                                                                  Newfoundland                       5.0%
 Quebec                                3.48%
                                                                                  Prince Edward Island              3.75%
Net premiums defined as gross premium less dividends or surplus.
                                                                                  Quebec                            3.48%
Applies to insured premium and claims and expenses on ASO plans in ON, QC
and NL.

Not applicable to EAPs and other fee-for-service products.                       Call 1.800.959.5525 or visit www.cra.gc.ca for more information on
                                                                                 GST/HST.

                                                                            23
Provincial Medicare Programs
Hospital Coverage                                                                 Medical Care
All provinces provide room and board to the ward level; surgical                  Provincial Medicare programs cover medically necessary services
facilities; in-hospital nursing; drugs; and diagnostic, emergency                 provided by physicians based on an approved fee schedule. Other
outpatient, laboratory and operating room services.                               private practitioners (i.e., chiropractors, podiatrists, physiotherapists,
                                                                                  etc.) may be covered on a limited basis.
The additional cost for a private or semi private room varies according to
province. Alberta, Manitoba, Quebec, Prince Edward Island and                     Varying levels of coverage are also available while temporarily travelling
Newfoundland/Labrador have legislated charges that vary according to              out of province.
province. In all other provinces, charges vary according to market rates.
                                                                                  Prescription Drugs (Out of Hospital)
Out of Country                                                                    Varying levels of coverage are available to seniors and lower-income
Emergency out-of-country expenses are covered to limited levels and               persons based on a provincial drug list. See listing on the following pages.
vary by province. As of January 1, 2020, Ontario does not have this
coverage. In Alberta, the maximums are C$100 per day for hospital and
C$50 for outpatient.

                                                                             24
Summary of Coverage for Prescription Drugs
Province                                         Under Age 65                                                 Age 65 and Over
Alberta                   Supplementary provincial health coverage available for          70% coverage, maximum out-of-pocket — $25 per
                          quarterly cost. Provides drug coverage at 70% to a maximum      prescription.
                          out-of-pocket of $25 per prescription.

British Columbia          70% after deductible; 100% after out-of-pocket maximum          If born in 1939 or earlier: 75% after deductible; 100%
                          reached. Deductible and maximum based on family income.         after out-of-pocket maximum.

Manitoba                  100% after deductible of 3.17%–7.15%, depending on adjusted total annual family income. Deductible based on income,
                          and the minimum is $100.

New Brunswick             A voluntary plan is available. Premiums are paid according to annual family income level. Copay of 30% up to a maximum
                          of $30 per prescription.

Newfoundland & Labrador   Residents with a net family income of less than $150,000 are eligible for coverage with a 5%–10% out-of-pocket
                          maximum, depending on income.

                                                               25
Summary of Coverage for Prescription Drugs
 Province                                                            Under Age 65                                                  Age 65 and Over
 Nova Scotia                                 The Nova Scotia Family Pharmacare program provides                Seniors’ Pharmacare Program has income based
                                             coverage when drugs become a financial burden. No                 premiums of up to $424 per year. Copay: 30% to a $382
                                             premiums. Maximum copayments and deductibles depend on            annual out-of-pocket maximum.
                                             family size and annual income.

 Ontario                                     Additional drug coverage available. Deductible based on           Low income: $2 per drug. Others: Deductible of $6.11
                                             income and number of dependents (varies).                         per drug after first $100 per year out of pocket.

 Prince Edward Island                        When 3%–12% of household income is spent on drugs,                100% after deductible of $8.25/drug plus $7.69 of
                                             province covers remainder of costs.                               dispensing fee.

 Quebec (updated every July 1)               Individuals without group coverage: Unless there is a medical reason, the lowest-cost generic (or if no generic, 63% of the
                                             brand) drug will be reimbursed after the monthly deductible of $21.75 to a monthly maximum of $93.08. 100% coverage
                                             after monthly maximum. There is no cost for prescriptions of children under 18 or full-time students 18–25 (unmarried,
                                             living with parents) whose parents are insured under the public plan.

 Saskatchewan                                Income-based support if drug costs exceed 3.4% of family          If they qualify, seniors pay maximum of $25 per
                                             income. Under age 15, province pays cost of prescription          prescription; 100% of remainder of cost is covered by
                                             above $25.                                                        province.

Note: Most provinces provide drug coverage for low-income families and seniors, as well as assistance with catastrophic drug expenses.

                                                                                   26
27
www.ajgcanada.com

Consulting and insurance brokerage services to be provided by
Gallagher Benefit Services, Inc. and/or Gallagher Benefit Services
(Canada) Group Inc. Gallagher Benefit Services, Inc. is a licensed
insurance agency that does business in California as “Gallagher
Benefit Services of California Insurance Services” and in
Massachusetts as “Gallagher Benefit Insurance Services.” Neither
Arthur J. Gallagher & Co. nor its subsidiaries provide accounting,
legal or tax advice.

© 2020 Gallagher Benefit Services (Canada) Group Inc. All rights reserved.
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