The 2024 federal budget and your total rewards offering

The federal budget released on April 16, 2024, contains measures that could have a direct or indirect impact on your organization’s total rewards offering. Our experts have put together a watch list in light of the available information.

The government proposes to increase the registered retirement savings plan (RRSP) withdrawal limit to $60,000 for the purchase of a qualifying home under the home buyers’ plan (HBP). This measure would apply to withdrawals made after Budget Day.

Furthermore, the budget proposes a temporary measure to defer the start of the HBP repayment period by an additional three years after making a first withdrawal between January 1, 2022, and December 31, 2025. As such, the 15-year repayment period would begin the fifth year following the year in which a first withdrawal is made.

The Government of Canada is already rolling out the Canadian Dental Care Plan (CDCP) to provide dental care to eligible Canadians. The implementation should be complete in 2025 (exact date to be confirmed). Read our December 2023 bulletin for more information.

Following the introduction of Bill C-64 , the Government of Canada is proposing to allocate $1.5 billion over five years to Health Canada to support the launch of the National Pharmacare Plan. This initiative is meant to enhance and expand, rather than replace, existing provincial and territorial public drug insurance plans. The first phase of the plan, which includes the reimbursement of contraceptives and diabetes medication, will be implemented after negotiations with the provinces and territories.

Pursuant to the 2023 Fall Economic Statement, the government continues to emphasize the importance and potential for the Canadian economy of having Canadian pension plans invest a meaningful portion of their assets domestically.

Two new measures are proposed along these lines:

1. The creation of a working group to explore ways to generate attractive investment opportunities for pension plans, notably in the following areas:

• Digital infrastructure and artificial intelligence
• Physical infrastructure
• Airport facilities
• Venture capital
• Construction of new housing

Given the significant demand for infrastructure as an institutional investment, this initiative may result in particularly interesting investment opportunities for pension funds.

This working group will also consider the possibility of removing the rule preventing pension plans from owning more than 30% of a given company’s voting shares.

2. The amendment of the Pension Benefits Standards Act, 1985 to allow the Office of the Superintendent of Financial Institutions to publicly release information on the investments of large federally regulated pension plans, such as the allocation of plan assets by province and territory.

As the nature of work is increasingly digital, the government is taking action to restore work-life balance with a right to disconnect from work outside of working hours. The government will provide $3.6 million over five years, starting in 2024-2025, and $0.6 million thereafter to enable the Labour Program, a federal institution within Employment and Social Development Canada, to implement legislative amendments to the Canada Labour Code. This measure could affect up to 500,000 employees working in federally-regulated sectors, and reflects a desire for more flexibility in the workplace.

Our experts are closely monitoring the situation to keep you informed of any new developments. Looking for more information on one of these topics? Contact your Normandin Beaudry expert or email us.