Prepaid Funeral Plans in Canada: How They Work and How They Are Protected

A prepaid funeral plan in Canada is a contract with a licensed funeral provider that you fund in advance, either through a trust account or through an insurance policy. There is no national standard, because each province makes its own rules. In Ontario, for example, you can cancel for a full refund within 30 days, contracts signed since July 1, 2012 must be guaranteed, and a compensation fund protects prepaid money at licensed funeral establishments.

What is the difference between pre-planning and prepaying?

Pre-planning means recording what you want: burial or cremation, the kind of service, the provider. You can do that with a licensed provider at no upfront cost, and the Bereavement Authority of Ontario (BAO) says you do not have to prepay to pre-arrange. Prepaying means you also pay for those arrangements ahead of time.

Pre-planning alone does not lock in a price, but it does spare your family a set of decisions at a hard time. If you are not sure you want to tie up money, it can be a good first step. Our guide to pre-paid funeral plans explains the wider trade-offs.

How are prepaid plans funded in Canada?

There are two common ways to pay, and the BAO describes both:

• A trust account. You pay the provider, and the money is held for you in trust at a bank, trust company or with an independent trustee. It earns income until it is needed, which can help offset price increases.
• Insurance. You buy an insurance policy, through the provider's program or directly from an insurer, and the policy pays the provider when you die. In Ontario this is a two-step process. You sign a prepaid contract with the provider for the services you choose, and a separate contract with the insurer, which sets out cancellation and refund rights.

Refunds on cancellation differ between the two, so ask for both options in writing. If you pay by instalments, ask for the total cost including fees and interest. The BAO notes that in most cases you save money by paying in full rather than over time.

What protections apply in Ontario?

Ontario publishes detailed rules, set out in the Funeral, Burial and Cremation Services Act, 2002 and explained by the BAO and the Government of Ontario.

• Guarantee. All prepaid contracts signed on or after July 1, 2012 must be guaranteed. You or your legal representative will not be asked to pay more for the supplies and services in the contract, provided you have met its terms. Taxes are not guaranteed. Older contracts may not be, so the estate could owe a shortfall if prices have risen.
• Cancelling. You, your legal representative or another named person can cancel or change a prepaid contract at any time before the supplies or services are provided, in writing. A trust-funded contract cancelled within 30 days gets a full refund. After 30 days you receive a refund plus income earned, but the provider may keep up to 10% of the amount paid, to a maximum of $350.
• Protection of your money. If you prepay with a licensed funeral establishment or transfer service, a compensation fund returns money to consumers if, in rare cases, their prepaid money is not available when needed. Providers may only invest trust money in safe investments, and you can ask at least once a year where it is invested and how much is in the account. Insurance money is protected under the Insurance Act.
• If something is unavailable. The provider may make a reasonable substitution at no extra charge, or your legal representative may cancel that part of the contract.
• Leftover money. For funeral contracts signed after July 1, 2012, the purchaser can choose a person to receive any money left over.

Check that your provider is licensed. The BAO keeps a public register of licensees.

What about British Columbia and the other provinces?

In British Columbia, Consumer Protection BC licenses funeral providers. A provider that sells preneed services must set up a preneed trust account with a savings institution in BC, and must submit its preneed trust agreement and preneed contracts as part of the licence process. The rules come from the Cremation, Interment and Funeral Services Act, the Business Practices and Consumer Protection Act and the Consumer Contract Regulation. The detail of cancellation and refund terms is in the contract and regulation, so read your own contract rather than relying on a general summary.

Other provinces and territories, including Quebec, have their own rules. For any province, ask for these answers in writing:

• Whether your money goes into a trust or an insurance policy, and who holds it.
• Whether the price is guaranteed, and for which items.
• What you would get back if you cancel, and any fee.
• What happens if you move or the provider closes.
• Whether taxes, cemetery charges and third-party costs are included.

Does a prepaid plan cover everything?

Usually not. A plan may cover the funeral home's services and merchandise, while items bought from others, such as the cemetery plot, opening and closing, a marker or flowers, may be extra. Prices also differ by province and provider, and there is no official national average. Our guides on average funeral cost in Canada, burial cost in Canada and cremation cost in Canada explain what to expect and what help is available.

How does the CPP death benefit fit in?

The Canada Pension Plan (CPP) death benefit is a one-time payment, not a funeral plan. For deaths from January 1, 2025, it is $2,500, with a possible $2,500 top-up for a maximum of $5,000. The top-up applies if the person never received a CPP or QPP disability benefit, post-retirement disability benefit or retirement pension, and there is no surviving spouse or common-law partner eligible for a survivor's pension.

To qualify, the person must have contributed to the CPP for at least one-third of their contributory years, with a minimum of three years, or for at least 10 calendar years. If there is no estate, the person or institution paying the funeral expenses can apply first, then the spouse or partner, then next of kin. Service Canada says the executor should apply within 60 days and that processing takes roughly 6 to 12 weeks. If the person also contributed to the Quebec Pension Plan, contact Retraite Québec. See our CPP death benefit guide for the steps.

Because it arrives weeks after the funeral, the benefit does not replace a plan or savings.

Tell your family where the plan is

A plan helps only if the right people can find it. Keep the contract, the receipt for your payment or your insurance policy, and your wishes where your executor can reach them. The BAO suggests your legal representative take the pre-arrangement documents to the provider after a death, to show proof of payment and make any changes. Our guide on telling your family your funeral wishes has ways to start the conversation.

What to do next

1. Decide whether you want to pre-plan only, or prepay too.
2. Check that each provider you consider is licensed, and ask for its price list.
3. Get the funding method, guarantee, cancellation terms and moving rules in writing.
4. Keep the paperwork with your will and tell your executor.