Vol. 147, No. 10 — May 8, 2013

Registration

SI/2013-49 May 8, 2013

JOBS, GROWTH AND LONG-TERM PROSPERITY ACT

Order Fixing July 1, 2014 as the Day on which Sections 434 to 439 of the Act Come into Force

P.C. 2013-417 April 25, 2013

His Excellency the Governor General in Council, on the recommendation of the Minister of Labour, pursuant to subsection 440(2) of the Jobs, Growth and Long-term Prosperity Act, chapter 19 of the Statutes of Canada, 2012, fixes July 1, 2014 as the day on which sections 434 to 439 of that Act come into force.

EXPLANATORY NOTE

(This note is not part of the Order.)

Proposal

An Act to Implement Certain Provisions of the Budget Tabled in Parliament on March 29, 2012 and Other Measures (the Jobs, Growth and Long-term Prosperity Act [the Act]) was assented to on June 29, 2012. This Order fixes July 1, 2014, as the coming into force date for sections 434 to 439 of Part 4 of the Act.

Objective

To bring into force legislation which will require federally regulated employers to insure, on a go-forward basis, any long-term disability (LTD) plans they offer to employees, and increase maximum fines for violations of Part III (Labour Standards) of the Canada Labour Code, which establishes minimum working conditions (such as hours of work, general holidays and statutory leave) for employees in federally regulated enterprises.

Background

In the 2010 Speech from the Throne, the Government committed to explore ways to better protect workers when their employers go bankrupt. Subsequently, in Budget 2012, the Government promised to introduce legislation to require federally regulated private- sector employers to insure, on a go-forward basis, any long-term disability plans they offer to their employees. Sections 434, 435 and 438 of the Act amended Part III to implement the insurance requirement for long-term disability plans in the federally regulated private sector.

To ensure that there is a strong incentive for compliance with the new LTD requirement, as well as with other provisions of Part III, sections 436, 437 and 439 of the Actamended Part III to increase the maximum fine levels for violations of Part III provisions for the first time since 1965. The maximum fine for most Part III violations will increase from $5,000 to $250,000 on summary conviction, with the implementation of a graduated level of maximum fines for first, second and subsequent offences of $50,000, $100,000 and $250,000, respectively, in the case of an employer that is a corporation, and $10,000, $20,000 and $50,000, respectively, in all other cases, while the maximum fines for failing to comply with an order to pay arrears of wages under Part III, and for offences relating to record-keeping, will increase from $100 to $1,000 per day.

Implications

The provisions being brought into force with respect to insuring LTD plans apply to employers in the federally regulated private sector, which includes industries such as telecommunications, banking, and cross-border transportation. The provisions do not apply to provincially regulated employers.

The LTD insurance provisions apply on a go-forward basis, meaning that LTD benefits being provided to employees at the time the provisions come into force do not have to be insured.

The provisions relating to fines would increase the fines applicable to violations of Part III requirements, but do not have any impact upon fines for offences under other parts of the Canada Labour Code.

Consultation

Sections 434 to 439 of the Act did not come into force immediately upon Royal Assent but are to “come into force on a day to be fixed by order of the Governor in Council.” This was done recognizing that affected employers and unions would require some time to transition from uninsured to insured LTD plans, and to allow for consultations with those affected on the appropriate length of this transition period.

Following the tabling of the Act, discussions were held with affected employers and unions to obtain their perspective on what would constitute a reasonable transition period prior to the legislation coming into force. Based on these discussions, a coming into force date of July 1, 2014, was chosen, which provides sufficient time to implement the required change.

Departmental contact

Lenore Duff
Senior Director
Strategic Policy and Legislative Reform
Labour Program
Human Resources and Skills Development Canada
165 De l’Hôtel-de-Ville Street
Gatineau, Quebec
K1A 0J2
Telephone: 819-953-0241