Thanks for the link.
OK, I am answering in broad terms. You are going to need to create custom tax codes. If your tax has multiple components, see this Guide: Work with multi-component custom tax codes | Manager. Even if it doesn’t, there are no built-in tax codes for Canada.
Then, you’ll have to break your meals and entertainment expenses into multiple lines on sales and purchase transactions. Put 50% of the purchase on one line and apply your regular tax code for your province, as set up in your custom code. The tax is at full rate because your apportionment of expense is being applied to the purchase amount. Thus, the tax will be apportioned, too. Post this line item to an expense account named something like Deductible meals & entertainment.
Put the other 50% of the purchase on another line and apply no tax code at all. Post this line to an expense account named something like Non-deductible meals & entertainment.
Add the balance of the transaction, which will be the unallowed tax, to a third line. Also post this to Non-deductible meals & entertainment. Or, you could just combine this amount with the non-deductible 50% of the purchase.
This way, all your expenses and taxes paid are reflected in your records and match bank or cash transactions. So your true profit is calculated. But the deductible and non-deductible portions are visibly separated for tax filing. And the Tax payable account is only reduced by by 50% of the tax paid on limited purchases for meals and entertainment. That keeps the offset amount correct.