CanadianPayroll/docs/source/2_compliance.rst

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PAYROLL COMPLIANCE
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The Canada Revenue Agency
~~~~~~~~~~~~~~~~~~~~~~~~~~~

Under the Canada Pension Plan Act and the Employment Insurance Act, the CRA is
responsible for determining:

  - whether or not an individual's employment is pensionable under the Canada Pension
Plan Act or insurable under the Employment Insurance Act

  - the types of earnings that are considered pensionable or insurable

  - how many hours an insured person has in insurable employment

  - the recovery of any debts owed as a result of an overpayment of Canada Pension
Plan, Employment Insurance, or Old Age Security benefits

The CRA is also responsible for ensuring that CPP contributions and EI premiums are
deducted, remitted and reported as required by legislation.

The Canada Revenue Agency (CRA) is a federal government agency that manages the
following business lines for the federal government: Tax Services and Benefit Programs.
The Tax Services business line assists over 25 million individuals, businesses, trusts, and
organizations to meet their obligations under the tax system. Each year, the CRA collects
approximately $324 billion in gross taxes and excise duties on behalf of the federal and
provincial governments - the equivalent of about $1.2 billion every working day. The CRA's
mission is to promote compliance with Canada's tax legislation and regulations through
communication, quality service, and responsible enforcement, thereby contributing to the
economic and social well-being of Canadians.

From this mission comes the CRA's mandate to:

  - collect revenues and administer tax laws for the federal government and for most provinces and territories

  - deliver various social and economic benefit incentive programs to Canadians

The CRA tracks the success of the first part of its mandate by measuring compliance in the following areas:

  - **Filing:** the CRA's goal is to have over 90% of individual and corporate income tax and registered business' goods and services tax/harmonized sales tax (GST/HST) returns filed on time.

  - **Registration:** the CRA measures its success in this area by ensuring that the majority of all known businesses are registered for various programs including corporate income tax, GST/HST, payroll deductions, and import/export accounts.

  - **Remittance:** the CRA's goal is to have over 90% of individual and corporate tax filers pay their taxes on time.

  - **Reporting:** the CRA measures reporting compliance through the information it receives on tax documents, for example, the T4 and T4A information slips.

The CRA's program responsibilities that are specifically related to payroll include the administration of:

  - the Canada Pension Plan (CPP) (shared responsibility with Employment and Social Development Canada and Service Canada)

  - Employment Insurance (EI) (shared responsibility with Employment and Social Development Canada and Service Canada)

  - Income Tax

Each of these programs requires compliance by employers to withhold deductions from their
employees' pay for CPP contributions, EI premiums and income tax deductions. These
withholdings are termed statutory deductions as the deductions are required under legislative
statute. Statutory deductions are the first deductions to be withheld from an employee's gross
pay.

Canada Pension Plan (CPP)
--------------------------

The Canada Pension Plan became operational on January 1, 1966. The plan was fully
effective in 1976 after a ten year transitional period.
The Canada Pension Plan is a social insurance program, legislated under the federal Canada
Pension Plan Act, designed to provide protection in the form of benefits to contributors and
their families against loss of income due to retirement. 

In addition to retirement pension benefits, the plan provides supplementary benefits in the form of:

  - surviving spouse pensions
  - disability benefits
  - benefits for orphans and children of disabled contributors
  - death benefits payable upon the death of a contributor

All employers are required by law to deduct CPP contributions from pensionable earnings
paid to their employees, and to remit these deductions, along with the employer's portion, to
the CRA. The employer matches the employee's contributions dollar for dollar.

.. admonition:: EXAMPLE

    Janet Frank has $45.00 in CPP contributions deducted from her gross pay. Her employer,
    Northern Skies, must match her contribution of $45.00. A total of $90.00 in CPP contributions must be remitted to the CRA.

CPP contributions take priority over all other deductions and are therefore the first statutory
deduction to be withheld from an employee's gross pay.

Employment Insurance (EI)
--------------------------

The CRA's responsibility for the Employment Insurance program is associated with the
collection of employee and employer premiums. It also makes decisions about which types of
remuneration are considered insurable and, therefore, subject to EI premiums.
All employers are required by law to deduct EI premiums from the insurable earnings paid to
their employees, and remit these deductions, along with the employer's portion, to the CRA.
The employer's portion is 1.4 times the employee's portion.

.. admonition:: EXAMPLE

    Janet Frank has $20.00 in EI premiums deducted from her gross pay. Her employer, Northern
    Skies must contribute $28.00 ($20.00 x 1.4). A total of $48.00 in EI premiums must be
    remitted to the CRA.

EI premiums are the second statutory deduction to be withheld from an employee's pay.
Employers are also required to track the employee's insurable earnings and insurable hours
by pay period for reporting purposes, such as completing the Record of Employment for a
terminated or inactive employee.

Income Tax
----------
Income taxation began in Canada, and in many other countries, during World War I. In July
1917, the Government of Canada passed legislation which enabled the government to levy a
temporary tax on personal income. This tax was intended to help finance government
expenditures for World War I; however, it eventually became the basic tax on all incomes.

When income tax was first introduced, each person was responsible for paying their own
income tax directly to the federal government. In 1940, the federal government legislated
deductions at source, which meant that employers became responsible for withholding
income tax from remuneration paid to employees. Beginning January 1, 1962, all provinces
imposed personal income tax; prior to that date, only Québec imposed such a tax.

Income tax withholdings are calculated by applying a federal tax rate and a separate
provincial/territorial tax rate to the employee's taxable income. The employee's province of
employment determines which provincial/territorial tax rate to apply. The federal
government and all provinces and territories, except Québec, have the same definition of
taxable income.

All Canadian provinces/territories, except Québec, have entered into tax collection
agreements with the federal government. Under these agreements the CRA collects the
provincial/territorial income taxes on behalf of the provinces/territories. The CRA then
distributes the provincial/territorial income taxes it has collected through a series of transfer
payments to the provinces/territories. These transfer payments are based on the personal tax
returns filed by Canadian taxpayers.

As the federal government collects both the federal and the provincial/territorial portions of
tax from all employees working in a province/territory other than Québec, the two tax
withholdings, federal and provincial/territorial, are combined into one deduction amount. The
employee may only see one item *Income Tax* or *Federal Income Tax* listed on their pay
statement, however it is the total of two withholdings.

Québec collects its own provincial income tax. There are two separate income tax deductions
withheld from Québec employees — one for federal income tax and the other for Québec
provincial income tax. The federal income tax is remitted to the CRA and the Québec
provincial income tax is remitted to Revenu Québec (RQ). Québec employees will see
*Federal Income Tax* and *Québec Income Tax* listed separately on their pay statements.
RQ is discussed extensively in a later chapter.

Non-Compliance Penalties
~~~~~~~~~~~~~~~~~~~~~~~~~

If an organization fails to deduct and remit the amounts withheld from employees for CPP
contributions, EI premiums and income tax, it may be left in the position of having to pay
both the employer's and the employee's portion of deductions not taken, as well as penalties
and interest charges on the outstanding amount.

An employer who remits withholdings or deductions late is subject to the following penalties:

  - 3% will be applied to remittances that are 1 to 3 days late
  - 5% for remittances that are 4 or 5 days late
  - 7% for remittances that are 6 or 7 days late
  - 10% for remittances that are 8 or more days late

An employer who withholds the statutory deductions but does not remit them, or fails to
deduct the required deductions, will be subject to a 10% penalty for the first occurrence on
the amount that should have been deducted and remitted. This penalty may increase to 20%
for the second and each subsequent occurrence in the same calendar year if the failure was
made knowingly or under circumstances of gross negligence. Penalties will be applied to
amounts in excess of $500; however, in the case of wilful delay or deficiency, these penalties
can be levied on amounts of less than $500.

The Canada Revenue Agency (CRA) charges interest on any unpaid remittances and unpaid
penalties from the day the payment was due. The interest rate is determined every three
months, in accordance with the prescribed interest rates, and is available on the CRA
website.

As a payroll practitioner, you need to have a clear understanding of how and when to make
the required deductions and remittances to avoid these penalties and interest charges.

All monies deducted on behalf of the CRA are considered to be held “in trust” for the
Receiver General. The amount owed must be kept separate from the operating funds of the
organization. In the event of estate liquidation, assignment, receivership, or bankruptcy the
trust money for statutory deductions is still owed to the CRA.

Employment and Social Development Canada (ESDC)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Employment and Social Development Canada (ESDC), a department of the Government of
Canada, is committed to building a stronger and more competitive Canada by supporting
Canadians in making choices that help them live productive and rewarding lives and to
improve their quality of life.

To do this, the department:

  - develops policies that make Canada a society in which all can use their talents, skills and resources to participate in learning, work and their community
  - creates programs and support initiatives that help Canadians move through life's transitions—from families with children to seniors, from school to work, from one job to another, from unemployment to employment, from the workforce to retirement
  - creates better outcomes for Canadians through service excellence with Service Canada and other partners

ESDC supports human capital development and labour market development; and is dedicated
to establishing a culture of lifelong learning for Canadians. Some of their specific program
responsibilities include:

  - Canada Pension Plan and Old Age Security
  - Employment Insurance
  - Employment Programs
  - Youth Employment Strategies
  - Canada Education Savings Program
  - Canada Student Loans and Grants

ESDC is responsible for matters relating to:

  - amending the regulations made under the Canada Pension Plan and the Employment *Insurance Act*
  - keeping records of each individual's CPP contributions and pensionable earnings
  - the establishment of annual maximum insurable earnings
  - the administration of provisions related to Wage Loss plans
  - the administration of provisions regarding Job Creation programs

Almost all of today's seniors receive income from Canada's public pensions. Basic financial
support is also available to survivors, people who become too disabled to work, and their
children. These pensions and benefits are delivered through the Canada Pension Plan (CPP)
and Old Age Security (OAS) programs. Together, the CPP and OAS programs provide a
modest base upon which Canadians can build their retirement income.

The amount of CPP benefits is based on an individual's CPP contributions. Employees
between the ages of 18 to 70 years old make contributions that are calculated on their annual
pensionable earnings between a minimum and a maximum amount. The minimum amount is
frozen at $3,500, while the maximum pensionable earnings are set each January, based on
increases in the average wage in Canada.

Employment Insurance (EI) is the program with the greatest impact on payroll. This program
provides temporary financial assistance for unemployed Canadians while they look for work
or upgrade their skills. It also provides coverage for Canadians who are sick, pregnant or
caring for a newborn or adopted child. Individuals who must care for a family member who
is seriously ill with a significant risk of death may also be assisted by Employment Insurance
benefits. Application of the EI rules will be looked at in more detail in another chapter.
The first Unemployment Insurance (UI) Act was passed into law in 1940, and was based on
the British Unemployment Insurance Act, 1935. Since that time, the UI Act has been repealed
and replaced four times - in 1955, 1971, 1985, and most recently in 1996. Clarifying details
on how the act is to be applied are found in the EI Regulations, which are amended as
required.

The purpose of the act is to provide income support during a temporary interruption of
earnings with the emphasis on returning the unemployed to the labour force as quickly as
possible. Contributions to the plan and the amount of benefits are based on a percentage of
insurable earnings. The ceiling on insurable earnings is reviewed annually to keep pace with
increases in average income and the cost of living. The premium rates payable by an insured
employee and the employer are also determined annually.

Service Canada
~~~~~~~~~~~~~~~~~

Service Canada (SC) was created by the federal government in 2005 with the goal of
providing easy-to-access, one-stop personalized service to Canadians. The agency integrates
services from a number of federal departments to form a service delivery network. These
services often touch all aspects of the lives of Canadians: from parental and pension benefits,
to matching employers with job seekers, and obtaining a Social Insurance Number.
Service Canada serves as the government's operational arm while Employment and Social
Development Canada (ESDC) operates as the policy-making body. ESDC makes the rules
for the various programs while Service Canada delivers the programs.

Some of Service Canada's program responsibilities include:

  - the issuance of Social Insurance Numbers (SIN) and the protection and security of SIN information
  - the delivery of services to employers, including Record of Employment on the Web the administration of Employment Insurance programs to individuals, including regular, illness, pregnancy/parental, critically ill or injured person and compassionate care benefits
  - the administration of the Employment Insurance Premium Reduction program, including granting qualified employers a reduced Employment Insurance premium rate
  - the administration of Canada Pension Plan benefits, including retirement, disability, survivor, children's and death benefits
  - the administration of benefits for seniors, including the Old Age Security Program and the Guaranteed Income Supplement

Through the Canada Pension Plan program, SC administers the payment of CPP benefits. These payments have little impact on payroll. 
The biggest impact Service Canada has on
payroll is through the administration of the Record of Employment program and the Social
Insurance Number.

Payroll is responsible for deducting and remitting EI premiums on behalf of employees and
employers. They are also responsible for capturing information related to insurable earnings
and hours, and reporting that information on the Record of Employment, which is explained
in detail in a later chapter.

Social Insurance Number (SIN)
------------------------------

The Social Insurance Number (SIN) Program was introduced by Parliament in 1964 to
register people with the Unemployment Insurance Commission (now known as Employment
Insurance) and the Canada Pension Plan. In 1967, the SIN also became a file identifier for
Revenue Canada (now known as the Canada Revenue Agency).

Under the Employment Insurance Act, every person who works in Canada is required to have
a Social Insurance Number. As an employer, you must ask new employees to provide their
SIN when they are hired. According to the Employment Insurance Regulations which came
into force on April 30, 2013, employees are required by law to provide their SIN; they may
do so by presenting a SIN card or the Confirmation of SIN letter. It is important that you
obtain the correct SIN of your employee so that payroll can report accurate statutory
withholdings for Canada Pension Plan contributions, Employment Insurance premiums, and
income tax on the employee's information slips at the end of the year.

To apply for a Social Insurance Number, individuals must complete an application form that
can either be obtained from a SC office or downloaded from their website. Documents
proving the individual's identity and status in Canada must also be submitted with the
application. The documents must be originals and written in English or French.

Social Insurance Numbers beginning with a "9" (commonly called 900-series) are issued to
individuals who are neither Canadian citizens nor permanent residents, but need a SIN for
employment purposes. All 900-series SIN cards/letters carry an expiry date that is the same
as the expiry date on the individual's work permit. Individuals must apply for new
documentation prior to expiry. Employees who are not residents of Canada, who are in
regular continuous employment, and are in possession of a 900-series SIN, are subject to all
applicable statutory deductions.

Statistics Canada
~~~~~~~~~~~~~~~~~~~~~
Statistics Canada produces statistics that help Canadians better understand their country—its
population, resources, economy, society and culture.
In Canada, providing statistics is a federal responsibility. As Canada’s central statistical
agency, Statistics Canada is legislated under the Statistics Act to serve this function for the
whole of Canada and each of the provinces/territories.
Objective statistical information is vital to an open and democratic society. It provides a solid
foundation for informed decisions by elected representatives, businesses, unions and non-
profit organizations, as well as individual Canadians.
Statistics Canada is committed to protecting the confidentiality of all information entrusted to
them and to ensure that the information delivered is timely and relevant to Canadians.

Personal Privacy
~~~~~~~~~~~~~~~~~
The Canadian federal government and all provincial governments have legislation that sets
limits on the collection, use or disclosure of personal information. Private sector privacy laws
in Canada currently only cover the employee personal information of employees that work
for federally regulated companies or who are located in one of the four provinces with
provincial private sector privacy laws: Alberta, British Columbia, Manitoba and Québec1.
Public sector employees have some privacy protection under all jurisdictions except Ontario
which excludes employee information from its public sector privacy legislation. Employees
who are covered by a collective agreement also have statutory privacy protection based on
arbitral jurisprudence and their particular collective agreement. Therefore, approximately
half of workers in Canada have privacy rights backed by legislation, while the remaining
50% of the country’s more than 20 million or so workers have privacy rights that are either
voluntarily set in place by employers who have developed employee privacy codes or have
privacy rights because they have a collective agreement in place.
Employers should also be aware that egregious violations of privacy may open them up to
civil damages, including class action lawsuits. Legislatures and the courts are recognizing
privacy rights and providing opportunities for civil remedies.
In drawing up its legislation for the protection of personal information, the Canadian
government based its privacy provisions on a set of guidelines that had been developed by
the Canadian Standards Association in its Model Code for the Protection of Personal
Information.

The Privacy Principles
-----------------------

The Canadian Standards Association (CSA) Model Code is a set of principles that was
developed with input from organizations, governments, consumer associations and other
privacy stakeholders. They are incorporated in Federal private sector privacy legislation and
have become the generally accepted framework for evaluating privacy processes and systems
in Canada2.
Principle 1. Accountability
An organization is responsible for personal information under its control and shall designate
an individual or individuals to be accountable for the organization's compliance with the
following principles.
Principle 2. Identifying Purposes
The purposes for which personal information is collected shall be identified by the
organization at or before the time the information is collected.
Principle 3. Consent
The knowledge and consent of the individual are required for the collection, use, or
disclosure of personal information, except where inappropriate. Note: In certain
circumstances, personal information can be collected, used, or disclosed without the
knowledge and consent of the individual. For example, legal, medical, or security reasons
may make it impossible or impractical to seek consent.
Principle 4. Limiting Collection
The collection of personal information shall be limited to that which is necessary for the
purposes identified by the organization. Information shall be collected by fair and lawful
means.
Principle 5. Limiting Use, Disclosure, and Retention
Personal information shall not be used or disclosed for purposes other than those for which it
was collected, except with the consent of the individual or as required by law. Personal
information shall be retained only as long as is necessary for the fulfillment of those
purposes.
Principle 6. Accuracy
Personal information shall be as accurate, complete, and up-to-date as is necessary for the
purposes for which it is to be used.
Principle 7. Safeguards
Personal information shall be protected by security safeguards appropriate to the sensitivity
of the information.
Principle 8. Openness
An organization shall make readily available to individuals specific information about its
policies and practices relating to the management of personal information.
Principle 9. Individual Access
Upon request, an individual shall be informed of the existence, use and disclosure of his or
her personal information and shall be given access to that information. An individual shall be
able to challenge the accuracy and completeness of the information and have it amended as
appropriate. In certain situations, an organization may not be able to provide access to all the
personal information it holds about an individual. Exceptions to the access requirement
should be limited and specific. The reasons for denying access should be provided to the
individual upon request. Exceptions may include information that is prohibitively costly to
provide, information that contains references to other individuals, information that cannot be
disclosed for legal, security, or commercial proprietary reasons, and information that is
subject to solicitor–client or litigation privilege.
Principle 10. Challenging Compliance
An individual shall be able to address a challenge concerning compliance with the above
principles to the designated individual or individuals accountable for the organization's
compliance.

The Personal Information Protection and Electronic Documents Act (PIPEDA)
--------------------------------------------------------------------------
The federal government drew upon the CSA Privacy Principles in its drafting of the federal
Personal Information Protection and Electronic Documents Act (PIPEDA) and the spirit and
much of the wording of the principles can be found throughout PIPEDA.
The mandate of the Office of the Privacy Commissioner of Canada (OPC) is overseeing
compliance with both the Privacy Act, which covers the personal information-handling
practices of federal government departments and agencies (including employee data), and the
Personal Information Protection and Electronic Documents Act (PIPEDA), Canada’s private
sector privacy law.
PIPEDA has applied to federally regulated organizations such as banks, telecommunications
and transportation companies since January 2001 and applies to the collection, use or
disclosure of personal information in the course of any commercial activity within a province
that does not have its own privacy legislation, since January 2004.
While this protection of personal information legislation has a significant impact on how
organizations collect, use and disclose personal information relating to commercial
transactions (for example, customer/client lists and information), it is the effect of this
legislation on employee personal information that concerns the payroll and human resources
departments.
Employers collect personal employee information to conduct and protect their business, and
to comply with government legislation (for example, Employment/Labour Standards and
statutory deductions relating to CPP/QPP contributions, EI and QPIP premiums along with
income tax). As well, many employers provide benefits such as dental, medical and pension
plans that require the collection of even greater amounts of personal data.

.. note::

    Notice
PIPEDA does not require that employers obtain consent from prospective employees, current
employees, or terminated employees to collect, use, and disclose information about that
person where the information is necessary for the creation, maintenance, and termination of
the employment relationship. It is, however, the case that the employer will provide notice to
the employee so that they are knowledgeable with respect to the information that the
employer collects, uses, and discloses.
This notice should be provided to prospective employees as part of the recruitment process
and also as part of the on-boarding process. In addition, if there are changes to personal data
practices for employee information, employees should be informed about such changes in a
timely manner.

Consent
According to PIPEDA, employers must obtain an employee’s consent before they collect
personal information where that information is not required for the employment relationship.
Further, the information collected must be for a specific purpose and must be destroyed once
that purpose is no longer valid.
There are two forms of consent that can be obtained from an employee − express and
implied:
Express consent should be used for particularly sensitive employee information such as
might be asked for in the case of a voluntary employee assistance program.
Implied consent means the employee is considered to have consented indirectly. An
example of implied consent is when an employee completes a form for an employer provided
but optional service such as a ‘social club’ for birthday gifts and notices. Participating in this
club is not required for the employment relationship so consent is required. But the
information requested, and the context is not overly sensitive so consent for the collection
and use of employee data may be implied by the fact that the employee completed the
voluntary form. It doesn’t need an “I consent” checkbox.
In essence, the more sensitive the information, the more one should use express written
consent, which outlines in detail the specific purpose for which an employer is using the
information. It is critical for those working in payroll to be aware of the requirements of
privacy legislation that applies to their employees and to have the necessary procedures in
place to comply with the legislation. If an employee chooses not to disclose the information
and is not required to do so by law, an employer cannot force an employee to divulge it.

Exceptions to Consent Requirement
Subparagraph 7(3) of the Personal Information Protection and Electronic Documents Act
(Bill C6) allows an employer to disclose personal information without the knowledge or
consent of the individual if the disclosure is made to a government institution which has
identified its lawful authority, and if the disclosure is for the purpose of administering any
law of Canada.
PIPEDA permits federal government agencies such as the CRA, ESDC, Service Canada and
provincial/territorial Ministries of Labour to obtain personal employee information needed to
administer programs or benefits, or to perform an audit. Legislation specifically provides
these government bodies with the right to request personal employee information and inspect
certain records and documents. As a result, the employer does not need to obtain the
employee’s permission to provide the information.
In addition to disclosures to government that are mandated by legislation and in relation to
employment, subparagraph 7.3 of PIPEDA states that an employer that is regulated by
federal labour codes can

“…collect, use and disclose personal information without the consent of the individual if
(a) the collection, use or disclosure is necessary to establish, manage or terminate an
employment relationship between the federal work, undertaking or business and the
individual; and
(b) the federal work, undertaking or business has informed the individual that the personal
information will be or may be collected, used or disclosed for those purposes”.

Use and Storage of Personal Information
According to PIPEDA, organizations can only use information for the purpose for which it
was collected. Employers must fully disclose in writing to the employee the reasons why
they require the information, as well as what will be done with it.
Personal information must not be disclosed to external stakeholders without the employee’s
consent and only for the purpose for which the information was collected. For example, if the
organization is being audited by a government agency, such as the CRA, the employee’s
medical information should not be included with the information provided for audit purposes.
There are times when employers are required to collect information about employees in order
to comply with employment/labour standards or human rights legislation. For example, to
accommodate an employee for religious days and holidays, an employer needs to know about
the employee’s religious beliefs. To seek out this type of information for any other reason
invades the individual’s right to privacy.

Limitations on Use – the Social Insurance Number example
The purpose of a social insurance number (SIN) is to identify an individual for specific
government programs. This information may not be collected, stored, used or disclosed for
any other purpose without the employee’s consent. Where the SIN is to be used for purposes
of identification, an organization must provide a convenient method for the employee to
withdraw his/her consent for that use at any time.
Employers are authorized to collect a SIN from employees in order to produce Records of
Employment and income tax information slips. Unless the employee has provided a SIN for
another specific use, and has consented to that specific use in writing, an employer could be
subject to fines for each improper use of that number.
As a general rule, an employer may not communicate the number to a third party without the
employee’s specific consent to do so. Exceptions are cases in which it is the employer’s
obligation to report an employee’s SIN to RQ, CRA, ESDC or Service Canada.
The SIN should not be used on pay statements or communicated to unions or benefit carriers.
They should not be used as an identifier by any organization other than the government
agencies mentioned above, unless the employee provides written consent to do so.

Pension Benefits Standards Act
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Canadian Human Rights Act
~~~~~~~~~~~~~~~~~~~~~~~~~~

Employment Equity Act
~~~~~~~~~~~~~~~~~~~~~~~~~~

Summary
~~~~~~~~~~~~~~~~

  - Under the Canada Pension Plan Act and the Employment Insurance Act, the Canada Revenue Agency is responsible for determining:
    - whether or not an individual's employment is pensionable under the Canada Pension Plan Act or insurable under the Employment Insurance Act
    - the types of earnings that are considered pensionable or insurable
    - how many hours an insured person has in insurable employment
    - the recovery of any debts owed as a result of an overpayment of Canada Pension Plan, Employment Insurance, or Old Age Security benefits

  - The Canada Revenue Agency is responsible for ensuring that Canada Pension Plan contributions and Employment Insurance premiums are deducted, remitted, and reported as required by legislation.

  - The Canada Revenue Agency collects provincial/territorial income taxes on behalf of all provinces/territories except Québec.

  - Revenu Québec collects the provincial income tax for the province of Québec.

  - Employers who remit withholdings or deductions late, withhold the statutory deductions but do not remit them, or fail to deduct the required deductions will be subject to penalties, which may increase on subsequent occurrences, plus interest charges.

  - All monies deducted on behalf of the Canada Revenue Agency are considered to be held “in trust” for the Receiver General.

  - Employment and Social Development Canada is responsible for matters relating to:

    - amending the regulations made under the Canada Pension Plan and the Employment Insurance Act
    - keeping records of each individual's Canada Pension Plan contributions and pensionable earnings
    - the establishment of annual maximum insurable earnings
    - the administration of provisions related to Wage Loss plans
    - the administration of provisions regarding Job Creation programs

  - Employment and Social Development Canada's Employment Insurance program
provides temporary financial assistance for unemployed Canadians while they look
for work or upgrade their skills.

  - Service Canada serves as the government's operational arm while Employment and
Social Development Canada operates as the policy-making body.

  - Service Canada is responsible for:

    - the issuance of Social Insurance Numbers (SIN) and the protection and security of SIN information
    - the delivery of services to employers, including Record of Employment on the Web
    - the administration of Employment Insurance programs to individuals, including regular, illness, pregnancy/parental, critically ill or injured person and compassionate care benefits
    - the administration of the Employment Insurance Premium Reduction program, including granting qualified employers a reduced Employment Insurance premium rate
    - the administration of Canada Pension Plan benefits, including retirement, disability, survivor, children's and death benefits
    - the administration of benefits for seniors, including the Old Age Security Program and the Guaranteed Income Supplement Payroll is responsible for deducting and remitting Employment Insurance premiums on behalf of employees and employers. 

  - Payroll is responsible for deducting and remitting Employment Insurance premiums on behalf of employees and employers.

  - Payroll is responsible for capturing information related to insurable earnings and hours, and reporting that information on the Record of Employment.

  - The Canadian government based its privacy provisions in its legislation for the
protection of personal information on a set of guidelines called the Ten Privacy
Principles.

  - The Personal Information Protection and Electronic Documents Act has applied to
federally-regulated organizations such as banks, telecommunications and
transportation companies since January 2001.

  - Since January 2004 the Personal Information Protection and Electronic Documents
Act has applied to the collection, use or disclosure of personal information in the
course of any commercial activity within a province that does not have its own
privacy legislation.

  - Express consent means the employee provides their consent either verbally (in which
case when and how the consent was received should be documented) or in writing.

  - Implied consent means the employee is considered to have consented indirectly.

  - The employer does not need to obtain the employee’s permission to provide personal
information where legislation provides federal government agencies such as the
Canada Revenue Agency, Employment and Social Development Canada, Service
Canada and provincial/territorial Ministries of Labour with the right to request
personal employee information in order to administer programs or benefits, or in the
case of an audit.

  - Other than an employer’s obligation to report an employee’s Social Insurance
Number to the Canada Revenue Agency, Employment and Social Development
Canada, Service Canada or Revenu Québec, an employer may not communicate the
number to a third party without the employee’s specific consent to do so.

Review Questions
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1. What are the three main programs specifically related to payroll that the Canada Revenue Agency administers?

2. If an organization deducts $27,400 in Canada Pension Plan contributions from its employees and $21,200 in Employment Insurance premiums, how much would have to be remitted in total to the Canada Revenue Agency?

3. True or False: The Canada Revenue Agency collects provincial/territorial income taxes for all provinces and territories.

4. True or False: The emphasis of the Employment Insurance program is on paying people so they don't have to return to work.

5. Indicate which federal department or agency would be responsible in the following scenarios.

  An employer is preparing the budget for the next year and wants to know the annual maximum insurable earnings amount.

  An employee wants to retire and apply for Canada Pension Plan benefits.

  There is a new type of earning in the new collective agreement. You are not sure if it is insurable.

  The organization would like to apply for a reduction in its Employment Insurance premium rate.