FTR Now
Highlights from the Federal Government’s 2024 Fall Economic Statement
Date: December 19, 2024
On December 16, 2024, the federal government issued its 2024 Fall Economic Statement. The Statement covers a wide array of initiatives including several proposals that, if they were to be implemented, will be of interest to employers, human resources professionals and pension plan administrators.
Early Retirement Benefits in the Public Service
The government has proposed amendments to the Public Service Superannuation Act to expand the operational service early retirement program to additional frontline employee groups in the federal public service, following the Treasury Board President’s announcement in June 2024.
Under this proposal, firefighters, border services officers, parliamentary protection officers, and other frontline employees would be eligible to retire with an immediate unreduced pension after completing 25 years of actual operational service. Alternatively, they could retire at age 50 with 25 years of combined actual and deemed operational service, provided at least 10 years are actual service.
Worker Protection Initiatives
Increases to Wage Theft Penalties
The government intends to implement regulatory changes that would substantially increase penalties for federally regulated employers who do not pay workers wages they have earned and to which they are otherwise entitled. Current penalty amounts range from $200 for individuals to $25,000 for large corporations, depending on the severity of the violation. The government will consult on proposed changes to the penalty amounts.
Restrict Use of Non-Compete Agreements
The government intends to restrict the use of non-compete agreements to promote labour mobility and enhance competition. The government will consult on proposed legislative amendments and intends to enact changes in early 2025.
Eradicating Forced Labour from Supply Chains
The government has announced its intention to establish a new supply chain due diligence regime through forthcoming legislation. This regime would require government entities and businesses to examine their international supply chains for fundamental labour rights risks and take remedial action where necessary.
The initiative includes:
- the creation of a new oversight agency to monitor compliance
- legislative amendments to strengthen Canada’s ban on forced labour imports
- enhanced requirements for importers to demonstrate supply chain compliance
The Statement proposes allocating $25.1 million over two years, beginning in 2025–26, to Global Affairs Canada and the Canada Border Services Agency, to support implementation of these initiatives.
Personal Support Worker Tax Credit
A new refundable tax credit for personal support workers is under development, potentially modelled on the design of the tax credit for volunteer firefighters (see our FTR Now, Highlights of the 2024 Federal Budget and Budget Bill). The government has indicated its intention to introduce implementing legislation promptly, with additional details to be announced.
Domestic Pension Investments
As indicated in a December 13 announcement from the Department of Finance and confirmed in the Fall Economic Statement on December 16, the federal government intends to move forward with its plans to encourage greater levels of domestic investment by Canadian pension funds. These plans were first announced in the 2023 Fall Economic Statement and moved forward by the 2024 federal Budget (see our FTR Now regarding the 2024 federal budget, linked above).
The 2024 Fall Economic Statement states that the federal government:
- will be removing the “30 per cent rule” (which restricts federally regulated Canadian pension funds from holding more than 30% of the voting shares of most corporations) from investments in Canada, and the federal government will consult with provinces regarding the treatment of provincially regulated pension plans
- is exploring relaxing the 10% limit on total private ownership of municipal utility corporations by providing an exception for Canadian pension funds
- intends to engage with Canadian airports and pension funds on measures to incentivize investment and development on airport lands
- proposes to launch a $1 billion fourth round of the Venture Capital Catalyst Initiative in 2025–2026, featuring enhanced investment terms designed to attract pension funds and other institutional investors
- has committed up to $15 billion to match Canadian pension funds’ debt or equity investments in AI data centres at a 1:2 ratio through a newly developed AI data centre investment program
Should you have any questions about the 2024 Fall Economic Statement, please contact your regular Hicks Morley lawyer.
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Hicks Morley Hamilton Stewart Storie LLP and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Hicks Morley Hamilton Stewart Storie LLP. ©
