Canadian Tax Adviser
January 10, 2012
CPP Refunds Nixed by Retroactive Tax Change
GVA, Indirect Tax
Taxpayers are no longer entitled to recover Canada Pension Plan (CPP)
employer premium overpayments made for employees on temporary leave from
employment who receive disability- or parental leave-type payments, due to legislative amendments
to the CPP included in federal Bill C-13. Surprisingly, this
change was made to the CPP retroactive to January 1, 2006. As a result,
certain potential refund claims for prior years are no longer valid.
Legislation to enact several tax measures announced in the 2011 federal
budget, tabled as Bill C-13, received Royal Assent on December 15, 2011. Bill C-13 retroactively broadened the scope of the CPP to
include any payments made in respect of employment, including overpayments
made for employees on temporary leave from employment.
This legislative change effectively reverses a Federal Court of Appeal case
that found that certain disability payments to employees were not for employment
services and thus were not pensionable earnings for CPP purposes under the Canada Pension Plan Act (Toronto Transit Commission v. The Minister of
For more information, contact your KPMG adviser.