Essentially, the history of this measure goes back to 1979. At that time in looking at the ability of Canadian firms to compete for Canadian projects it felt like there was a tax disincentive, a tax competitive disadvantage for Canadian firms. To help address that, it would help their competitiveness by allowing them to price the labour costs differently because their employees would be paying less tax. As a result they might be able to have the employees accept a wage that's somewhat lower than otherwise would have been the case once all the taxes had been factored in.
On November 1st, 2012. See this statement in context.