On June 3, the federal government launched a public consultation
to assess whether the so called "30% Rule" should be
retained, relaxed or eliminated for federally regulated pension
plans. The 30% Rule restricts pension funds from investing plan
assets in more than 30% of the shares that may be cast to elect the
directors of a corporation, with certain exceptions.
As outlined in our previous blog, the Ontario government
announced its own plans to eliminate the 30% Rule for Ontario
registered pension plans and has already conducted its own
The Federal consultation is much broader than that conducted by
Ontario. In particular, the Federal consultation is requesting
views on the tax policy issues associated with the growth of active
investments by pension plans. Specifically, the consultation notes
the potential for an erosion of the Canadian tax base resulting
from pension plans holding their investments in businesses through
flow-through entities, such as partnerships and trusts, where in
general, any tax payable is paid at the investor level. The
consultation also notes that a pension plan may shift income away
from a taxable Canadian corporation to the tax-exempt pension plan
by employing significant amounts of related-party debt.
To prevent pension plans from stripping earnings through the use
of related-party debt, the consultation asks whether the thin
capitalization rules, which disallow the deductibility of an
entity's interest expense payable to certain non-resident
shareholders on the proportion of debt that exceeds a specified
multiple of the entity's equity, should be applied to interest
paid to pension plans.
Stakeholders are invited to make submissions by September 16,
2016, by email to:
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about your specific circumstances.
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Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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