Laval University – Tax Court of Canada finds that an agreement to offer, at a distant date, to license premises to unidentified individuals was deemed to be a real property supply

Tardif J found that two agreements under which Quebec City agreed to pay a $10M grant to Laval University for the expansion of its sports complex and the University agreed that the City populace would have access to the complex for 70% of its operating hours constituted a supply by the University in consideration for the $10M.

He then found that ETA s. 136(1) deemed this to be a supply of immovable property (which therefore was a taxable supply) rather than a potentially exempt supply of movable property or a service. On its face, s. 136(1) assimilates, to real property supplies, licences of real property – whereas, what was at stake here was a promise that at a future date, the University would provide licences of sorts to as-yet unidentified individuals who wanted to exercise or play sports at the complex. Accordingly, this represents an expansive interpretation of s. 136(1).

Neal Armstrong. Summaries of Laval University v. The Queen, 2016 CCI 17, under ETA s. 123(1) – consideration, s. 136(1).