OTTAWA – The government has yet to explain how it intends to fulfil Prime Minister Justin Trudeau’s pledge not to go after anyone’s employee discounts -- despite that promise contradicting how the Canada Revenue Agency enforces the law.

In an attempt to put the final nail in the coffin on concerns over a CRA edict that suggested the tax agency was changing its approach to taxable employee discounts, Prime Minister Justin Trudeau tweeted: “Let me be blunt: we are not going to tax anyone's employee discounts.”

However, as it stands, despite the contentious document being pulled, the Income Tax Act remains unchanged, and within it there are longstanding rules that say employee benefits in some circumstances are taxable.

In an interview with Evan Solomon, host of CTV’s Question Period, Treasury Board President Scott Brison defended Trudeau’s tweet saying he intended to refer to the retail and hospitality sector, which was especially inflamed this week over the prospect of having to file things like employee discounts on T-shirts or hamburgers.

“In 140 character tweet it’s sometimes difficult to explain a 3,000-page Canadian tax code,” said Brison.

In a statement, a spokesperson for National Revenue Minister told CTV News the Canada Revenue Agency “must enforce” the provision of the act that says “all benefits and allowances received or enjoyed because of one’s employment are to be included in employment income,” including the value of discounts on merchandise.

When asked what threshold of employee benefits Canadians can expect to see taxed when the government comes out with its revised stance on this, Brison said that it wouldn’t make administrative sense to go after retail or hospitality claims “in an unreasonable way.”

The Agency, on the instruction of National Revenue Minister Diane Lebouthillier, pulled the edict by midweek, on the insistence that it was published without the minister’s approval and that the government has no intention of going after the retail sector.

‘So much doublespeak’

On CTV’s Question Period, Conservative deputy leader Lisa Raitt criticized the Liberals handling of the issue and said departmental officials dropped the ball on flagging this to the government before it blew up.

“This just shows you that this government doesn’t know how to govern, because you cannot have political interference with the Canada Revenue Agency and how they administer the law before them,” she said, adding that if they want to actually change whether or not employee discounts are taxed, it’ll require Finance Canada drafting amendments to change the law.

The revamped language around what employee discounts were considered taxable was prompted by the tax court ruling in 2011 that the CRA's old guidance for employers was inaccurate and had to be updated.

The document advised employers that the CRA would be interpreting the existing tax law differently and it would mean that, in certain instances, employee discounts count as part of income and the Agency considers them fair game to tax. The exception to this being: if the discount was available to members of the public at any point during the year, the discount doesn’t have to be reported, as it’s no longer considered a taxable benefit.

“There’s so much doublespeak that’s happening that Canadians are confused about what’s happening with the Liberal taxation plan,” NDP MP Tracey Ramsey said on CTV’s Question Period, adding that the mixed messages over employee discounts is another example of this.

"They’re not revealing things that they should be, they’re targeting people that they shouldn’t be, they’re talking about creating a level playing field when they’re not,” she said.

CRA, Finance reviewing

Brison said the wording is now under review by both the CRA and Finance Canada. It’s yet to be seen if they will come back with a revised edict with different wording about the CRA’s expectations for what employers have to report, or with more concrete changes to the law around employee discounts.

“CRA and Finance will look at this… There has to be some common sense and reasonableness to this… But that’s the end point. We have to make sure that we get both the policy and the application of the policy right,” said Brison.