The circumstances you have described are extremely unusual and generally, the employer's share of the contributions to an RPP on behalf of an employee does not give rise to a "taxable benefit" as you have described.
Without getting into the particulars as to the legitimacy of CRA's approach in this particular payroll audit, IF there is a legitimacy to the audit result as described by you, the logical answer to your question regarding the avoidance of double taxation is as follows.
The "taxable benefit" amount has in fact been contributed to the RPP, except that once it has been taxed in the employee's hands as an additional taxable benefit, the contributor of the additional RPP contribution is now the employee and not the employer and as a result, the employee should be entitled to claim a deduction for an additional RPP contribution equal to the "taxable benefit" added to his income. This effectively negates the initial tax cost of the attributed tax benefit by creating an RPP deduction that offsets the "tax benefit".
Proper documentation regarding the RPP contribution should be obtained to support the claim for this additional RPP contribution that is now deemed to have been made by the employee instead of the employer. As already mentioned, this is a highly unusual situation but the above suggestion would result in the avoidance of the "double taxation" scenario otherwise described.
