The benefit an employee receives during the year because a debt has been forgiven (whether a loan or another type of debt) is a taxable benefit.

The value of the benefit corresponds to the amount forgiven when the debt is settled or extinguished. The forgiven amount is equal to:

• the lesser of the following amounts:
  • the principal, and
  • the amount for which the debt was contracted;
• minus:
  • any amount paid on the principal of the debt, and
  • any adjustments.

You have to include the value of the benefit in boxes A and L and, where applicable, in box G of the employee's RL-1 slip (see courtesy translation RL-1-T). For more information, go to the Benefit Provided to an Employee page.