Though rarely enforced, Canadian law actually considered frequent flyer miles earned from business travel to be taxable income.  Miles earned from personal travel were different, but if the employer was paying for travel and the employee was benefiting this was considered to be a taxable benefit.

This rule has now changed. Canada will not consider miles ot be a taxable benefit even if earned from company-paid travel, as long as the frequent flyer member does not convert the points into cash.

It’s just way too complex an issue to tax and handle evenly across taxpayers. Points are earned from multiple sources, both business and personal travel but also credit cards and online shopping to name just a few. Which points are redeemed for travel? How much are those points worth? Does it vary based on the value of the redemption, and what percent of points used in that redemption originated from business travel?

And it’s way too scary and unpopular, what if a taxpayer gets audited and winds up with an ornary auditor who learns the miles were redeemed for a first class international trip?

So good on the Canadian taxing authorities for deciding not to pursue such matters any longer.