NB bulletins

Recently, Normandin Beaudry conducted its 19^th annual survey of fees charged by health care professionals in Quebec. Because health care services provided by these specialists are typically covered by group benefits plans, we believe that the results presented below will be of interest to you.

Real estate investments continue to grow in popularity among institutional investors, especially pension funds. Today, these investments are considered a core part of an asset allocation alongside stocks and bonds.

On October 12, 2016, the Quebec Court of Appeal largely confirmed a Superior Court decision declaring sections 76.3 and 76.5 of the Pay Equity Act to be unconstitutional. These sections violate the Canadian Charter of Rights and Freedoms and the Charter of Human Rights and Freedoms on the grounds of gender discrimination.

In our April 2016 bulletin on the last federal budget, we informed you that, following the introduction of the Budget Implementation Act 2016, No. 1 (S.C. 2016, c. 7), the waiting period for Employment Insurance benefits could be reduced from two weeks to one week effective January 1, 2017. This change has since been endorsed.

Bill C-27 (An Act to amend the Pension Benefits Standards Act, 1985) was introduced in the House of Commons on October 19, 2016. This Bill comes in response to public consultations on target benefit pension plans (“TB plans”) launched by the Department of Finance Canada on April 24, 2014, and applies to federally regulated private pension plans.

The annual Salary Increases Survey, conducted by Normandin Beaudry, reveals that Quebec salaries are expected to increase by 2.8% in 2017. Salary structures are expected to increase by an average of 1.8%.

On July 26, 2016, the Ontario government released a consultation paper entitled “Review of Ontario’s Solvency Funding Framework for Defined Benefit Pension Plans”, targeted at sponsors of single employer pension plans. This bulletin summarizes the approaches and options proposed during the course of these consultations.

In recent years, Canadian investors have seen interest rates fall dramatically. The rate for 10-year federal bonds fell from 6% at the beginning of the 2000s to under 1% in the 3^rd quarter of 2016. This decrease allowed investors to generate good returns. However, the future prospects for traditional bonds are now poor.

On July 1 each year, the Régie de l’assurance maladie du Québec adjusts the financial parameters applicable to the public prescription drug insurance plan to take into account the increase or decrease in plan costs.

Several private sector organizations must include the recognition of their obligations toward defined benefit pension plans (DB plans) and group insurance plans offered to retirees (other post-retirement benefits) in their financial statements. The assumptions required to determine the defined benefit obligation and the defined benefit cost (the expense) must be established by the organization’s management.

Some provinces have announced new tax measures that could soon affect group benefits plans: The increase in Insurance Premiums Tax rates in Newfoundland and Labrador; and the increase in the Harmonized Sales Tax in Newfoundland and Labrador and Prince Edward Island.

The Association des chirurgiens dentistes du Québec (ACDQ) recently recommended that its members stop offering assignment of dental care benefits.

In its budget tabled on March 22, 2016, the Government of Canada proposed several changes to Employment Insurance (EI), including making changes to the eligibility rules for new entrants and re-entrants to the labour market, temporarily enhancing benefits in certain regions and investing in improved service delivery.

The draft regulation entitled Regulation to amend the Regulation respecting supplemental pension plans (Draft Regulation) was published in the Gazette officielle du Québec on April 6, 2016. This Draft Regulation relates to the Act to Amend the Supplemental Pension Plans Act mainly with respect to the funding of defined benefit pension plans (Bill 29).

Some provinces have announced new tax measures that could soon affect group benefit plans including the increase in Insurance Premiums Tax rates in Alberta and
the increase in the Harmonized Sales Tax in New Brunswick.

In the 2016 Ontario Budget, the Ontario government confirms its intention to transform health care in the province.

For the 2015 tax year, a tax credit ranging from 4% to 20% of incurred medical expenses could be granted to Canadian taxpayers. The credit is subject to certain conditions and depends on the province or territory of residence.

In our August 2015 bulletin, we informed you about the latest developments concerning the design of the Ontario Retirement Pension Plan (ORPP), i.e. the phased enrolment of employers beginning in 2017 as well as the definition of a comparable workplace pension plan that determines whether or not an employer will be required to participate in the ORPP.

Over the past few years, responsible investment has become very important to investors. According to a survey of European institutions (pension funds, foundations, investment managers, etc.) conducted by Ernst & Young in 2015, close to 80% of investors now take into account the non-financial performance, including their impacts on the planet, of businesses they are investing in.

It can be stated unequivocally that 2015 has been the busiest year in terms of legislative changes since Quebec’s basic prescription drug insurance plan was established almost 20 years ago.

As in previous years, we inform you about the parameters that will be used by the major social security programs in 2016.