2025 Ontario Budget: Pension and Benefit Highlights
May 21, 2025
.png)
On May 15, 2025, the Ontario government released its 2025 Budget, titled A Plan to Protect Ontario (the “Budget”), and introduced Bill 24, Plan to Protect Ontario Act (Budget Measures), 2025 (“Bill 24”). The Budget and Bill 24 included a couple of pension and benefit updates.
Variable Life Benefits
The Budget confirms that the government is continuing to consult with the pension sector on a variable life benefit (“VLB”) framework. Generally, a VLB is decumulation framework that allows for pooling of members’ defined contribution (DC) accounts in retirement. The monthly benefit payments for a member’s life are adjusted based on the fund’s investment performance and mortality experience. VLBs will be available under pooled registered pension plans and DC registered pension plans.
The government published a consultation paper on a VLB framework on November 12, 2024. The consultation period closed on January 10, 2025. The Budget notes that the government is evaluating the feedback received from stakeholders, which will help inform a future VLB legislative framework.
Ontario Fertility Treatment Tax Credit
As announced in the 2024 Ontario Economic Outlook and Fiscal Review, the Budget details a proposed new Ontario Fertility Treatment Tax Credit effective January 1, 2025.
The Ontario Fertility Treatment Tax Credit is a refundable tax credit of 25% on eligible fertility treatment expenses up to $20,000, for a maximum credit of $5,000 per year. Eligible fertility treatment expenses are expenses paid by an individual or their spouse or common-law partner for the purposes of conceiving a child, including in vitro fertilization, egg and embryo freezing (including storage), fertility drugs, travel, and diagnostic testing (in each case provided within Canada). The Ontario Fertility Treatment Tax Credit is to be built on the eligible medical expenses claimed for the existing Medical Expense Tax Credit related to fertility treatment and preservation, as well as to surrogacy, and can be claimed in addition to the existing federal and Ontario Medical Expense Tax Credits.
A growing number of employers are offering fertility benefit coverage as part of their group benefit plans. As such, certain fertility expenses that would otherwise be eligible for the Ontario Fertility Treatment Tax Credit may be covered under a group benefit plan. Where a fertility expense is or will be reimbursed (including through a group benefit plan), the expense will not be eligible for the Ontario Fertility Treatment Tax Credit. If only a part of the fertility expense is or will be reimbursed, the unreimbursed portion may be eligible for the Ontario Fertility Treatment Tax Credit.
Bill 24, which was ordered for second reading as of May 15, 2025, includes the legislative amendments required to implement the proposed Ontario Fertility Treatment Tax Credit.
***
If you have any questions regarding the Budget or Bill 24, please do not hesitate to reach out – we’re here to help.
