The Que CA said that UTC was the payer, not PWC. So, PWC was not an "employer" for purposes of paying payroll taxes on the option amounts (unofficial translation):
" Being of the opinion that in view of this advantage [the UTC-conferred stock options] it was not the subject employer in the sense of the [PQ sickness insurance plan, the Employment Standards Act, or the PQ Pension Plan], the appellant did not pay the prescribed assessments under these laws.
" It's clear that the [Stock Option] Plan represented no form of impoverishment for PWC. It is accepted that the latter made no payment or reimbursement to UTC in the context of the administration and management of the Plan.
" The persons enrollable in the Plan were clearly identified in the prospectus or the Plan agreement. Thus, it arises that, for the employees who were part of the executive or the upper management of PWC, the conferring of options was a decision taken by the UTC Committee, in its sole discretion and without the participation of PWC.
" As far as the key employees who were not part of the Executive, it's true that those were identified by PWC which communicated their name and proposed a recommendation for options which would be conferred on them. These recommendations were accepted in 95% of the cases by the UTC Committee but the decision was always that of the Committee. It remains also that, for these key employees, the costs of the Plan were entirely borne by UTC and not at all by PWC."
On 19 September 2013, the SCC refused to hear an appeal.
See Pratt & Whitney Canada Cie c. Agence du revenu du Québec, 2013 QCCA 706 (CanLII)