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1996-060-e.html
COMPENSATION DIRECTIVE : 1996-060
December 19, 1996
Ottawa,
Canada
K1A 0S5
SUBJECT: 1997 Canada Pension Plan (CPP)/Québec Pension Plan (QPP)
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1
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PURPOSE
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1.1
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The purpose of this directive is to inform you of amendments to the
Canada/Québec Pension Plans (CPP/QPP) which affect the contributions
withheld at source.
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2
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BACKGROUND
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2.1
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For the first time in the history of the CPP and QPP, the rates of each plan
will differ. While the Government of Quebec sets the contribution rate for the
QPP, all other provincial governments and the Federal government decide, and
must agree, on the administration of the CPP.
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The Department of Finance Canada had been seeking the agreement of provincial
governments on the future of the CPP. A part of the agreement that was being
sought was an increase in CPP rate; however, this was not agreed upon.
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2.2
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It is understood that discussions between the Federal and Provincial
governments will continue; however, the Department of Finance Canada has
announced that the legislation currently in place will be utilized for the 1997
taxation year. Therefore, the rate for CPP will be different than the QPP
rate.
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2.3
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Due to the tight time constraints for implementation, the rate for CPP will be
utilized in the calculation of both CPP and QPP contributions until such time
as the Regional Pay System is modified to accept two different rates. As such,
a future adjustment for employees working in Quebec will be required. Once all
particulars are known, departments will be advised accordingly.
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3
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POLICY
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3.1
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The CPP rate will be utilized to determine the PSSA low rate. This is due to
the fact that the Public Service Superannuation Act specifically refers to the
integration with CPP.
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3.2
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Change in CPP/QPP Contribution Rate
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3.2.1
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Effective January 1, 1997, the CPP contribution rate will increase from 2.8% to
2.925%.
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3.2.2
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Effective January 1, 1997, the QPP contribution rate will increase from 2.8% to
3.0%.
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3.2.3
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The 1997 changes related to CPP/QPP are as follows:
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MAXIMUM PENSIONABLE EARNINGS CPP/QPP : $35,800
BASIC EXEMPTION CPP/QPP : $3,500
MAXIMUM CONTRIBUTORY EARNINGS CPP/QPP : $32,300
MAXIMUM CPP CONTRIBUTION : $944.78
MAXIMUM QPP CONTRIBUTION : $969.00
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4
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INQUIRIES
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4.1
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Any request for information regarding the foregoing should be addressed to your
PWGCS Compensation Services Office.
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Original Signed by
P. Charko
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P. Charko
Director General
Compensation Sector
Government Operational Service
Reference: CJA 9006-12, 9006-24, 9007-7-8
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