CRA notes that a supplementary disability plan for the company’s majority shareholder and another executive might not qualify as a s. 6(1)(a)(i) group plan

A corporation, which already provided a group health and disability plan to all its employees, created a supplementary disability insurance plan for two of its executive employees, one of whom was the majority shareholder.

CRA indicated that if there was “a higher level of benefits for the employee who is the majority shareholder compared to the level of benefits for the other employee in the group, such a policy would probably not be considered a component of a group insurance plan, but rather an individual disability insurance policy.” Accordingly, even if the executives received their benefit from the employer payment of the premiums qua employee rather than shareholder, the exemption pursuant to s. 6(1)(a)(i) from the taxability of that benefit under s. 6(1)(a) would not be available to the executives.

Neal Armstrong. Summaries of 19 February 2025 External T.I. 2018-0744821E5 F under s. 6(1)(a)(i) and s. 15(1).