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Bill C-2

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RECOMMENDATION

His Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled ``An Act to establish the Canada Pension Plan Investment Board and to amend the Canada Pension Plan and the Old Age Security Act and to make consequential amendments to other Acts''.

SUMMARY

This enactment establishes the Canada Pension Plan Investment Board and provides that the Board's objects are to manage and invest money transferred to it from the Canada Pension Plan Account in the best interests of the contributors and beneficiaries under the Canada Pension Plan. The Board's investments are to be made in accordance with the regulations and with investment policies, standards and procedures the Board is required to establish.

The enactment also amends the contribution, benefit and funding provisions of the Canada Pension Plan. The funding provisions are amended to move from ``pay-as-you-go'' funding to fuller funding. The contribution rates are amended to reach 9.9% of contributory earnings over six years and then remain steady. It also establishes that the Year's Basic Exemption below which no contributions are paid is frozen at $3,500.

The benefit changes to the Canada Pension Plan that are included in this enactment affect the contributory requirements for a disability pension, the retirement benefit calculation of a former disability recipient, the formula for adjusting career average earnings, the maximum death benefit and the calculation of combined benefits.

Other changes include provisions dealing with harmonization of the Canada Pension Plan's disability benefits and provincial workers' compensation benefits, post-mortem applications, non-cancellation of retirement benefits in favour of disability benefits, reimbursement to provinces, municipalities and private insurers, and the discontinuation of the Canada Pension Plan Advisory Board. The Canada Pension Plan and the Old Age Security Act are also amended in respect of information sharing, investigations and penalties.

The enactment also amends Part I of the Canada Pension Plan to align it with the provisions of the Income Tax Act and the Employment Insurance Act.