Foreign Workers and the Canada Pension Plan

Many Canadian newspapers are writing today about how Canada and India are on the verge of signing a Social Security Agreement that will make it easier for temporary foreign workers from India to work in Canada.

The agreement will address Canada Pension Plan payments by foreign nationals.

Generally, coverage under the Canada Pension Plan is based upon whether an employee is engaged in “pensionable employment.”  Pensionable employment is all employment that is not “excepted employment”. Where there is pensionable employment, both the employer and the employee are required to pay CPP.

The categories of “excepted employment” are:

  • Exchange teachers
  • Foreign government employees
  • Directors resident outside Canada
  • Employment in Canada by an employment resident outside Canada (with numerous limitations)
  • Employees covered by reciprocal agreements

Social Security Agreements ensure that people receive the benefits that they would otherwise be entitled too.  They also help avoid dual coverage.

The terms of the Canada – India Social Security Agreement are reported to be that:

Under the agreement, Indian workers on short term contracts of up to five years are likely to get relief from making any social security contribution in Canada provided they continue to make similar payments in India. Similar benefits will also be available to Canadian citizens working in India.

Canada currently has Social Security Agreements with Antigua, Australia, Austria, Barbados, Belgium, Chile, Croatia, Cyprus, the Czech Republic, Denmark, Dominica, Estonia, Finland, France, Germany, Greece, Grenada, Hungary, Iceland, Ireland, Israel, Italy, Jamaica, Japan, Korea, Latvia, Lithuania, Luxembourg, Macedonia, Malta, Mexico, Morocco, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Romania, St. Kitts, Saint Lucia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Trinidad, Turkey, the UK, the USA, and Uruguay.

 


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