Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: The taxpayer's concern that decisions of his employer's corporate parent could have a negative impact on his pension.
Position: The Minister assured the taxpayer that the CRA properly applies the provisions of the Act concerning these types of plans. OSFI and the provincial authorities will ensure requirements, as they apply to pensions, are satisfied.
March 30, 2009
XXXXXXXXXX
Dear XXXXXXXXXX :
XXXXXXXXXX , forwarded to me a copy of your email concerning the decisions of your employer's corporate parent and your view that those decisions could have a negative impact on your pension. Please accept my apology for this delayed reply.
You state in your email that the Canada Revenue Agency (CRA) enabled these decisions through a favourable advance income tax ruling and you ask that the CRA review this ruling.
The confidentiality provisions of the Income Tax Act prohibit me from discussing or providing information on any matter relating to a taxpayer without written authorization from that taxpayer. Therefore, I cannot advise you as to whether an advance ruling has been requested or provided in regard to the situation you describe. The policies, procedures and objectives of advance tax rulings are described in Information
Circular 70-6R5, Advance Income Tax Rulings, which can be found on the CRA Web site at www.cra.gc.ca/E/pub/tp/ic70-6r5/ic70-6r5-e.pdf.
The CRA advance ruling service does not change existing law; rather rulings state how the CRA will interpret and apply specific provisions of existing Canadian income tax law to a transaction or transactions which the taxpayer is contemplating. Individuals or corporations can ask the CRA to review a proposed transaction prior to its implementation to confirm the tax consequences pursuant to the specific provisions of existing Canadian income tax law. Advance rulings address the tax implications of a transaction, but they do not confirm or evaluate the business merits of a proposal. The
CRA does not have the mandate nor the authority to advise or compel a business to carry out particular transactions, and the government does not interfere with the business decisions of enterprises. Transactions which are part of an advance ruling must be legal and comply with all Canadian regulatory authorities, including federal and provincial pension regulators.
As Minister of National Revenue, I am accountable to Parliament for all CRA activities, including administering and enforcing the Act as it applies to the establishment and operation of registered pension plans and various types of employee benefit plans.
I assure you that the CRA properly applies the provisions of the Act concerning these types of plans.
The Office of the Superintendent of Financial Institutions (OSFI) Canada, which reports to the Minister of Finance, is the primary regulator and supervisor of federally registered deposit taking institutions, insurance companies, and federally registered private pension plans. As part of their functions, the OSFI Canada and its provincial counterparts determine if pensions are maintained in sound financial condition, meet minimum plan funding requirements, and comply with all governing laws and supervisory requirements. I am confident that the OSFI Canada and the provincial authorities will ensure these requirements, as they apply to your pension, are satisfied.
I appreciate being made aware of your concerns.
Sincerely,
Jean-Pierre Blackburn, P.C., M.P.
c.c.: Mr. Ray Boughen, M.P.
Palliser
House of Commons
Ottawa ON K1A 0A6
Lori Carruthers
613-957-2060
January 21, 2009
2008-030452
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