Employee allowances are taxable to the employee but then they can deduct on their T1’s an amount they feel is reasonable. If the allowance is not reasonable itself, you could have the expense limited on your tax return. You can’t just pay your employees $5000 a year allowance for internet access.
CRA could come in and limit it to $1000, or deny it all together. Now you don’t have an expense and the employees are still paying tax on the $5000 allowance.
We can debate what is reasonable to the cows come home. Based it on hard evidence and document it, makes it harder for the CRA to reject it. If you want to make sure your employees have adequate bandwidth, you can document quite easily an allowance for the average monthly increase to the next tier.