When a DSU was terminated contrary to the DSU rules, CRA applied the SDA rules retroactively

If a DSU plan is amended so that it no longer qualifies then, depending on the circumstances, CRA may consider that this evidences that the plan was never intended to comply, so that it is subject to the salary deferral arrangement rules on a retroactive rather than prospective basis. For example, in an actual situation "where a DSU plan was terminated and all outstanding awards were redeemed in cash…,[a]s the early redemption did not involve extraordinary circumstances…we took the position that the SDA rules applied retroactively with respect to any outstanding awards."

In light of the wording of s. 6(11) (see also Dominion of Canada and Sears Canada), retroactive application would mean that "if an amount was includable in income in a year that is now statute-barred, … the amount [would] be…brought forward and included in income in the earliest non-statute-barred year."

Neal Armstrong. Summaries of 29 April 2015 T.I. 2015-0565181E5 under Reg. 6801(d) and s. 6(11).