Income Tax Act — I-3.3 144.1
esignated employee benefits payable in the year or a prior year to, or for the benefit of, beneficiaries described in subparagraph (2)(d)(i) or (ii); and (b) the portion of any contribution made to an employee life and health trust that exceeds the amount deductible under paragraph (a) and that may reasonably be regarded as enabling the trust to provide or pay benefits described in subparagraphs (a)(i) or (ii) in a subsequent taxation year is deductible for that year. Actuarial determination (5) For the purposes of subsection (4), if, in respect of an employer’s obligations to fund an employee life and health trust, a report has been prepared by an independent actuary, using accepted actuarial principles and practices, before the time of a contribution by the employer, the portion of the contribution that the report specifies to be the amount that the employee life and health trust is reasonably expected to pay or incur in a taxation year in order to provide designated employee benefits to beneficiaries described in subparagraph (2)(d)(i) or (ii) for a taxation year is, in the absence of evidence to the contrary, presumed to have been contributed to enable the trust to provide those benefits for the year. Deductibility — collectively bargained or similar agreement (6) Despite subsection (4) and paragraph 18(9)(a), an employer may deduct in computing its income for a taxation year the amount that it is required to contribute for the year to an employee life and health trust if the following conditions are met at the time that the contribution is made: (a) the employer contributes to the trust in accordance with a contribution formula that does not provide for any variation in contributions determined by reference to the financial experience of the trust and either of the following conditions is met: (i) if there is a collective bargaining agreement, the trust provides benefits (A) negotiated under the collective bargaining agreement, or (B) under a participation agreement that are substantially the same as under the collective bargaining agreement, or (ii) in any other case, the trust provides benefits in accordance with an arrangement that meets the following conditions: (A) there is a legal requirement for each employer to participate in accordance with the terms and conditions that govern the trust, (B) there are a minimum of 50 beneficiaries under the trust who are employees of the participating employers in respect of the trust, and (C) each employee who is a beneficiary under the trust deals at arm’s length with each participating employer in respect of the trust; and (b) contributions that are to be made by each employer are determined, in whole or in part, by reference to the number of hours worked by individual employees of the employer or some other measure that is specific to each employee with respect to whom contributions are made to the trust. Maximum deductible (7) The amount deducted in a taxation year by an employer in computing its income in respect of contributions made to an employee life and health trust shall not exceed the amount determined by the formula A – B where A is the total of all amounts contributed by the employer to the trust in the year or in a preceding taxation year; and B is the total of all amounts deducted by the employer in a preceding taxation year in respect of amounts contributed by the employer to the trust. Employer promissory note (8) If an employer issues a promissory note or provides other evidence of its indebtedness to an employee life and health trust in respect of its obligation to the trust, (a) the issuance of the note or the provision of the evidence of indebtedness to the trust is not a contribution to the trust; and (b) a payment by the employer to the trust in full or partial satisfaction of its liability under the note or the evidence of indebtedness, whether stated to be of principal or interest or any other amount, is deemed to be an employer contribution to the trus