Highlights of the federal, provincial and territorial budgets for 2015

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Every year, we publish an overview of the federal, provincial and territorial budgets, with an emphasis on measures that could potentially affect group benefits plans. In line with last year’s budgets, the focus of the 2015 provincial and territorial budgets has been on sustaining the momentum for economic recovery and on introducing measures to achieve fiscal balance, while maintaining or enhancing vital public services. For the first time in eight years, Finance Minister Oliver has delivered a federal budget with a surplus.

Here’s a summary of the 2015 budgets by jurisdiction, including Federal, Alberta, Ontario, Newfoundland and Labrador, Quebec and Saskatchewan.

Federal – April 21, 2015

Compassionate Care Benefits

Finance Minister Joe Oliver announced that Employment Insurance (EI) Compassionate Care Benefits will be extended from 6 weeks to 6 months to better support Canadians caring for gravely ill family members. 

As is the case for the other job-protected leaves of absence (i.e. maternity and parental), the Canada Labour Code establishes minimum standards that federally-regulated employers must follow. The Code currently provides for an 8-week unpaid compassionate care leave of absence. Although the budget proposes that the duration of the EI compassionate care benefit be significantly increased (from 6 weeks to 6 months), the duration of the job-protected leave under the Code remains unchanged at 8 weeks.  

According to the Code, eligible federally-regulated employees may continue to participate in their group benefit plans (including pension plans) for the duration of their job protected leave, unless the employee(s) elects not to do so in writing. Where contributions are required from an employee in order to be entitled to a benefit(s), the employee is responsible for making the contributions. Similarly, an employer who pays contributions in respect of a benefit plan shall continue to make those contributions as if the employee was not on leave.

We continue to monitor any developments with respect to the Canada Labour Code and will report back as new details become available.   

For more information, please visit the Department of Finance Canada website.

Alberta – March 26, 2015

On March 26, 2015, the Alberta Government delivered their 2015 budget. The budget included an announcement that the Insurance Premium Tax charged on premiums for life, accident and sickness insurance would be increasing by one percent from 2% to 3%, effective April 1, 2016. On April 7, 2015 the legislature was dissolved for a general election on May 5, 2015. Given that no legislation was passed supporting the budget provisions prior to the election, none of the provisions came into effect.

Ontario  -  April 23, 2015

The Ontario Budget contains a number of measures that may affect the cost of some employee benefits. Though we bring these matters to your attention, we cannot comment on their impact based on the information currently available. 

1. Changes to the ODB Program

Proposed changes to the Ontario Drug Benefit (ODB) Program are: 

  • Optimizing the quantities of medication dispensed;
  • Adjusting some dispensing payments and practices;
  • Modernizing the coverage and reimbursement of certain products through evidence-based reviews; and
  • Continuing with Pan-Canadian work to build better processes and coordination of coverage and pricing for new brand and generic drugs.

It is unclear whether the first three measures will influence the coverage under the ODB; therefore, the effect on employer costs cannot be assessed at this point. 

Collaborating with the Pan-Canadian Pricing Alliance is positive as it will continue to support a lower drug cost environment.

2. Increasing Access to Fertility Treatments

The budget proposes to increase access to fertility treatments. In 2015, Ontario plans to contribute to the cost of one in vitro fertilization (IVF) cycle per patient for all eligible forms of infertility. Associated expenses related to IVF treatments are not covered under the provincial plan.

3. Travel Vaccines

The Government is considering allowing Ontarians to receive travel vaccines in their local pharmacies. With easier access to travel vaccines, we may see fewer travelers getting ill while being away from home.   

4. Disability benefits – Ontario auto insurance

To further reduce costs in Ontario’s auto insurance system, the Government proposes to amend the Insurance Act regulations to: 

  • Increase the standard benefit level for medical and rehabilitation benefits from $50,000  to $65,000
  • Reduce the standard duration of medical and rehabilitation benefits under the vehicle insurance policies from 10 years to 5 years for all claimants other than children

Although these amendments to the Ontario auto insurance will not have a direct impact on Sun Life’s disability plans, increasing the amount paid for medical and rehabilitation benefits is a positive change for the insured individual. This, in turn, may positively impact our wellness initiatives offered through our disability plans.   

For more information, please visit the Government of Ontario’s Ministry of Finance website.

Newfoundland and Labrador – April 30, 2015

  1. Harmonized Sales Tax

Newfoundland announced its plans to increase the current HST rate by 2% from 13% to 15%, effective January 1, 2016. This proposed rate increase will impact group benefits goods and services where the HST applies.

The impact of this proposed change will be communicated closer to the effective date.

  1. Addition of new drug therapies and new vaccine in provincial programs

The Government proposes to implement new drug therapies under the Newfoundland and Labrador Prescription Drug Program including drugs for the treatment of Hepatitis C and pulmonary hypertension, as well as new cancer therapies. It also plans to add a new vaccine, the Rotavirus vaccine, to the Provincial Vaccine Program. The vaccine protects infants from gastrointestinal illnesses which may lead to severe illness and hospitalization.

For more information, please visit the
Newfoundland and Labrador’s Department of Finance website.

Quebec  –  March 26, 2015

Bill 28 on prescription drug plans

The budget delivered on March 26, 2015 confirmed the intention of the Government of Quebec to pass Bill 28, An Act mainly to implement certain provisions of the Budget Speech of June 4 2014 and return to a balanced budget 2015-2016. Following the sanction of the Bill on April 21, 2015, we issued a Special Edition Focus Update on April 22, 2015.

The Government made the following amendments:

  • Reimbursement for brand-name drugs where a generic exists: as is the case elsewhere in Canada and with RAMQ, for brand-name drugs for which a generic exists, private plans in Quebec will be able to limit reimbursement to the lowest cost (i.e. the cost of the generic equivalent); this change will be effective October 1, 2015;
  • Some new professional services rendered in pharmacy (previously framed under Bill 41) will be remunerated. Bill 28 does not specify which services, and we will need to wait for the disclosure of the regulations to know more;  
  • Approval by the Quebec government to conduct confidential listing agreements with prescription drugs manufacturers: under such agreements, the negotiated medication will temporarily be taken out of the RAMQ formulary and will not be covered under private plans. Once the agreement is formalized, the negotiated medication will then be listed on the RAMQ formulary and covered under private plans. It appears that the negotiated cost savings will not apply to private plans. More details to come.

For more information, please visit the Province of Quebec’s Ministère des Finances website.

Saskatchewan – March 18, 2015

Seniors’ Drug Plan

Eligible seniors 65 years and older pay a maximum of $20 for prescription drugs listed on the Saskatchewan Formulary and for drugs approved under the Exception Drug Status (EDS).

Previously, the Province used the federal threshold of $80,255 with regards to the drug plan. Anyone with a taxable income in excess of that amount was not eligible for the program.

The 2015 budget lowers the seniors’ income threshold to $65,515, aligning with the provincial income tax credit. The change will come into effect on July 1, 2015.

For more information, please visit the Government of Saskatchewan’s Ministry of Finance website.

Other budgets

Although the remaining provinces and territories are directing funds to health care initiatives, committing to decreased wait times and increasing access to health professionals, their budgets do not contain issues relevant to Sun Life’s group benefits plans.

More to come

We will communicate upcoming updates as we continue to study the impact of the changes included in the budgets listed above.

Questions?

Please contact your Sun Life Financial group benefits representative.