Jim Flaherty, Canada's Minister of Finance, together with Saskatchewan's Deputy Premier and Finance Minister Ken Krawetz, today released draft legislative amendments to accommodate changes to the Saskatchewan Pension Plan, as outlined by the Government of Saskatchewan in its 2010 budget.
"Saving for retirement is an important objective for Canadian families," said Flaherty. "We are continuing to move forward to provide greater flexibility and opportunity to achieve this goal. Saskatchewan's proposed changes to the Saskatchewan Pension Plan are consistent with these objectives and with these proposals. We are able to accommodate these changes under the Income Tax Act."
"We are very pleased that the federal government has agreed to our request to increase the contribution limit," Krawetz said. "Plan participants requested this change and we are responding."The Saskatchewan Pension Plan is a voluntary defined contribution pension plan established by the Government of Saskatchewan. It offers an alternative for small businesses that do not offer their own pension plans, provides cost-effective professional investment management of retirement savings and allows employees full portability of pension savings between employers.
The amendments proposed today to the Income Tax Act accommodate an increase in the annual contribution limit to the Saskatchewan Pension Plan to $2,500 from $600, and align its tax treatment with that of other tax-assisted retirement savings vehicles. These changes will ensure that Saskatchewan Pension Plan members benefit from additional features of the Registered Retirement Savings Plan and Registered Pension Plan rules that were not previously available to them. The proposed changes will apply to 2010 and subsequent taxation years.
The Government of Saskatchewan is simultaneously proceeding with amendments to provincial legislation and regulations required to enact these changes.
"This is another great example of our governments working together to help families in Saskatchewan," said Gerry Ritz, Minister of Agriculture and Agri-Food and Member of Parliament for Battlefords-Lloydminster.
"The Government of Canada is continuing to work with Saskatchewan and all provinces and territories on strengthening Canada's retirement income system," said Flaherty.
Minister Flaherty indicated that the Government of Canada intends to table the proposed changes to the Income Tax Act in the House of Commons at an early opportunity.
