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Last week, the Ontario government passed its latest budget bill, Bill 229: Protect, Support and Recover from COVID-19 Act (Budget Measures), 2020 (“Bill 229”). Bill 229 implements initiatives contained in Ontario’s 2020 budget through amendments to existing statutes.

Amendments to key employment statutes include:

Protecting a Sustainable Public Sector for Future Generations Act, 2019:

Bill 229 amended Bill 124: The Protecting a Sustainable Public Sector for Future Generations Act, 2019 (“Bill 124”) to clarify the moderation period for a group of non-union employees who are certified by a trade union after June 5, 2019, or to a group of unionized employees who decertify. In short, where employees have already commenced their moderation period before the change in status, they will get credit for the time spent in their moderation period before their change in status. If they have not commenced their moderation period before the change in status, then the 3-year moderation period will apply under their new status.

Further, the Management Board of Cabinet can now issue directives requiring employers to provide information related to collective bargaining compensation for compliance purposes. Under this provision, the Management Board of Cabinet has the authority to withhold funds from the employer or employers’ organization if a directive is not complied with, and contains measures that might result in the forfeiture of any withheld funds.

Employer Health Tax Act:

Back in March, the government temporarily increased the Employer Health Tax (“EHT”) exemption for 2020 from $490,000 to $1 million. Bill 229 amended the legislation to make this permanent. The EHT exemption will be adjusted according to inflation in 2028, following which it will be adjusted for inflation every 5 years. The Ontario government also amended the Act to increase the installment threshold from $600,000 to 1.2 million for the 2021 tax year. Under this new installment threshold, all employers would only be required to remit monthly installments when their payroll reaches $1.2 million.

Pension Benefits Act:

In 2010, the government amended the Pension Benefits Act to include a target benefits framework, among other things. These provisions were never proclaimed into force and were subject to automatic repeal under Ontario’s Legislation Act after 10 years, on December 31, 2020. Bill 229 re-enacted the target benefits provisions, but these provisions will come into force on a future date to be proclaimed by the Lieutenant Governor of Ontario.

Other noteworthy provisions that have now been automatically repealed under the Legislation Act include provisions relating to phased retirement and the requirement to provide advance notice for plan amendments.

Many thanks to Dorna Zaboli for her assistance in drafting this article.