CRA indicated that where a provincial government sponsors a program that is designed to deliver incentive payments or earnings supplements directly to eligible nurses, such amounts are included in their income under s. 56(1)(r)(i) (“earnings supplements provided under a [government-sponsored] project … to encourage individuals to obtain or keep employment”) whereas if it sponsors a program designed to have employers deliver the payments directly to them, such amounts are included in their employment income under s. 5(1). This distinction is significant, in part, because in the first case, no source deductions are required for Canada pension plan or employment insurance premiums.
CRA noted that the Ontario Community Commitment Program for Nurses (CCPN) (which paid $25,000 to nurses to induce them back into practice) fell into the second (s. 5(1)) category.