Income Tax Act — I-3.3 147.2
Pension contributions deductible — employer contributions 147.2 (1) For a taxation year ending after 1990, there may be deducted in computing the income of a taxpayer who is an employer the total of all amounts each of which is a contribution made by the employer after 1990 and either in the taxation year or within 120 days after the end of the taxation year to a registered pension plan in respect of the employer’s employees or former employees, to the extent that (a) in the case of a contribution in respect of a money purchase provision of a plan, the contribution was made in respect of periods before the end of the taxation year (i) in accordance with the plan as registered, or (ii) under subsection 147.1(20); (b) in the case of a contribution in respect of the defined benefit provisions of a plan (other than a specified multi-employer plan), the contribution (i) is an eligible contribution, (ii) was made to fund benefits provided to employees and former employees of the employer in respect of periods before the end of the taxation year, and (iii) complies with subsection 147.1(10); (c) in the case of a contribution made to a plan that is a specified multi-employer plan, the contribution was made in accordance with the plan as registered and in respect of periods before the end of the taxation year; and (d) the contribution was not deducted in computing the income of the employer for a preceding taxation year. Employer contributions — defined benefit provisions (2) For the purposes of subsection 147.2(1), a contribution made by an employer to a registered pension plan in respect of the defined benefit provisions of the plan is an eligible contribution if it is a prescribed contribution or if it complies with prescribed conditions and is made pursuant to a recommendation by an actuary in whose opinion the contribution is required to be made so that the plan will have sufficient assets to pay benefits under the defined benefit provisions of the plan, as registered, in respect of the employees and former employees of the employer, where (a) the recommendation is based on an actuarial valuation that complies with the following conditions, except the conditions in subparagraphs 147.2(2)(a)(iii) and 147.2(2)(a)(iv) to the extent that they are inconsistent with any other conditions that apply for the purpose of determining whether the contribution is an eligible contribution: (i) the effective date of the valuation is not more than 4 years before the day on which the contribution is made, (ii) actuarial liabilities and current service costs are determined in accordance with an actuarial funding method that produces a reasonable matching of contributions with accruing benefits, (iii) all assumptions made for the purposes of the valuation are reasonable at the time the valuation is prepared and at the time the contribution is made, (iv) the valuation is prepared in accordance with generally accepted actuarial principles, (v) the valuation complies with prescribed conditions, which conditions may include conditions regarding the benefits that may be taken into account for the purposes of the valuation, and (vi) where more than one employer participates in the plan, assets and actuarial liabilities are apportioned in a reasonable manner among participating employers in respect of their employees and former employees, and (b) the recommendation is approved by the Minister in writing, and, for the purposes of this subsection and except as otherwise provided by regulation, (c) the benefits taken into account for the purposes of a recommendation may include anticipated cost-of-living and similar adjustments where the terms of a pension plan do not require that those adjustments be made but it is reasonable to expect that they will be made, and (d) a recommendation with respect to the contributions required to be made by an employer in respect of the defined benefit provisions of a pension plan may be prepared without regard to such portion