Principal Issues: [TaxInterpretations translation] Will workers' contributions to the Quebec Parental Insurance Plan be eligible for a tax credit that is deductible from federal income tax, in the same way as contributions to the Quebec Pension Plan and workers' contributions made under the Employment Insurance Act?
Position: This is a matter for the Department of Finance.
XXXXXXXXXX 2005-015675
July 10, 2006
Dear Sir,
Subject: Request for Technical Interpretation: Deductibility of Quebec Parental Insurance Plan Contributions
This is further to your email of October 31, 2005, in which you asked whether workers' benefits under the Quebec Parental Insurance Plan ("QPIP") will be eligible for a tax credit that is deductible from federal income tax, in the same manner as contributions to the Quebec Pension Plan and workers' contributions under the Employment Insurance Act ("EIA"). We apologize for the delay in responding to your question.
Prior to the introduction of the QPIP, maternity and parental benefits for Quebec residents - as well as all Canadians - were funded through contributions to the Employment Insurance program. With the advent of the QPIP, effective January 1, 2006, Quebec residents will be able to take advantage of more generous maternity, parental or adoption leave funded through QPIP premiums. Quebec employers' and employees' EI premiums will be reduced accordingly.
The Department of Finance Canada - which is responsible for the development of tax policy in Canada - has not indicated its intention to give QPIP contributions the same tax treatment as that given to contributions to the Employment Insurance program. We therefore invite you to consult the Department of Finance Canada's website at www.fin.gc.ca for any possible decision on this subject.
We hope that these comments are of assistance.
Best regards,
François D. Bordeleau, LL.B.
Individuals, Business and Partnerships Section
Income Tax Rulings Directorate