2 November 89 T.I. (April 90 Access Letter, ¶1191)

Expenses involved in negotiating and evaluating a B.C. employee share ownership plan or B.C. employee venture capital plan seem to constitute mere preliminary steps taken prior to the actual issuance of the shares, and do not qualify for deduction.

An ESOP or an EVCP must require that the corporation redeem a shareholder's shares in certain circumstances for an amount determined in accordance with the provisions of the Employee's Investment Act (B.C.). To the extent that the retraction price does not provide for a minority discount, it could exceed the fair market value of the share and therefore be outside of the exception.

Reimbursements received by employee groups from the B.C. government for up to 1/2 of the costs of negotiating, evaluating and implementing an ESOP or an EVCP do not constitute an employee benefit. Following Ransom, such payment "puts nothing in the pocket but merely saves the pocket."