Section 118.7

B

Paragraph (a.1)

Administrative Policy

10 July 2006 External T.I. 2005-0156751E5 F - Régime québécois d'assurance parentale

description of QPIP program

CRA noted that prior to the introduction of the Quebec Parental Insurance Plan, maternity and parental benefits for Quebec residents - as well as all Canadians - were funded through contributions to the Employment Insurance program. With the advent of the QPIP, effective January 1, 2006, Quebec residents were able to take advantage of more generous maternity, parental or adoption leave funded through QPIP premiums. Quebec employers' and employees' EI premiums were to be reduced accordingly.

At the time of the letter, the Department of Finance Canada had not yet indicated its intention to give QPIP contributions the same tax treatment as EI premiums.