Canada Pension Plan Disability (CPPD) is Long Term Disability insurance, therefore it ought to be TAX FREE!

CPPD tax free points.

1. CPPD is akin to private insurance.

2. Private insurance is not income, life insurance & LTD for example.

3. Private LTD purchased with 100% employee money results in tax free benefits.

4. CPPD is funded by 50% direct contribution plus 50% contribution earned in service. Therefore, 100% is paid by the employee. (IBM v Waterman case, 2013 SCC)

5. CRA's Horizontal Equity principle states two people in the same situation must be treated the same. Therefore CPPD must be tax free.

6. As an interim measure, CPPD premiums, using Horizontal Equity, should be deductible in accordance with ITA s. 6(1)(f)(v)'s reduction from box 107 of the T4A.

7. CPPD is taxable iaw ITA s. 56 & that appears to be when pensions are given "in lieu."

8. Public policy:

A. Disabled

B. Retired: long term financial security

C. Rule of law: Bradburn principle