Q: We are negotiating few terms and conditions around Collectives.
Discussion around non-taxable allowances is currently underway.

Allowance such as Meal/Night Allowance (Staying overnight – accommodation is paid for)/Late Shift Allowances are not currently taxed. The business would like to propose them to be moved to Taxable.
Are there any guidelines around this?
A: To make a meal allowance a true reimbursing allowance it must meet the requirements set by the Income Tax Act, look at these two sections.  So, if the meal allowance does not meet these requirements, then it is a taxable allowance.  Also, if the present meal allowance did not meet this criterion already it would be a taxable allowance already.

Income Tax Act 2007
CW 17C
Payments for overtime meals and certain other allowances

CW 17CB
Payments for certain work-related meals

I do not understand how a Late Shift Allowance would not be a taxable allowance to start with, how did the employee incur an expense while working for their employer while working a late shift?  Bottomline this is a taxable allowance already.  If you have been paying this as a reimbursing allowance, then you have a taxable and Holidays Act liability.

Bottomline a collective agreement cannot contract out of tax law or the Holidays Act (in what is part of taxable gross earnings for leave).