Draft Pension And Deferred Salary Leave Tax Regulations Released

As part of the Government of Canada's (Government) COVID-19 Economic Response Plan, the Department of Finance Canada announced on July 2, 2020, the release of proposed draft regulations—by way of amendment to the Income Tax Regulations (Draft Regulations)—that are intended to assist sponsors of registered pension plans (RPPs) and deferred salary leave plans (DSLPs) during the COVID-19 pandemic, through the provision of temporary relief from certain Income Tax Act registration requirements and other requirements under the Income Tax Act.

The Draft Regulations address the following matters:

• Adding temporary stop-the-clock rules to the conditions applicable to DSLPs for the period of March 15, 2020, to April 30, 2021. The purpose of these rules is to ensure that DSLPs applicable to employees who return early from a leave or who defer the start of a leave during the specified period are not subject to premature termination due to non-compliance with the