CRA interprets a reference to an ITA paragraph as referring to a subparagraph thereof

S. 144.1(2)(e)(i) requires that an employee life and health trust (ELHT) established by an employer must have one class of beneficiaries whose members represent at least 25% of all the beneficiaries of the participating employer under the trust, with at least 75% of the members of the class not being key employees.

S. 144.1(2)(e) was amended (through the addition of s. 144.1(2)(e)(ii)) to provide, as an alternative to satisfying the “Beneficiary Condition” in s. 144.1(2)(e)(i), that a trusteed plan can qualify as an ELHT where key employees are included as beneficiaries under the plan if the total cost of private health services plan benefits (PHSP benefits) provided to each key employee (and specified related persons) in respect of the year does not exceed $2,500

CRA indicated that the requirement of s. 144.1(2)(f) (dating from before the introduction of the s. 144.1(2)(e)(i) condition) – that the rights under the trust of each key employee are not more advantageous than the rights of a class of beneficiaries described in s. 144.1(2)(e) - applies only where the s. 144.1(2)(e)(i) condition is relied upon (so that where s. 144.1(2)(e)(ii) is met, the plan is not required to satisfy s. 144.1(2)(f).

Neal Armstrong. Summary of 3 May 2022 CALU Roundtable, Q.4, 2022-0928801C6 under s. 144.1(2)(f).