Paragraph 6(1)(a) includes in income the value of any benefit of any kind whatever enjoyed by virtue of an office or employment, except certain listed items. Employee discounts are not a listed exception. So the issue distills to what is a benefit and what is its value.

Traditionally CRA took the administrative position that small reasonable discounts were not taxable provided the employer was recovering its cost. This was purely an administrative position to simplify the administration of the Income Tax Act and CRA is free to change it at any time.

In some cases, discounts can be very significant- e.g. cars, airplane tickets, parking and daily meals. The free coffee or discount on a pair of jeans is not their concern.