A print shop, which printed advertising flyers for customers such as Canadian Tire, Loblaws and Sobeys, acquired robotic equipment, which was used to transfer the newly printed flyers to pallets for distribution. The ARQ ultimately conceded that such robotic equipment was used in the manufacturing or processing of goods but maintained its position that the flyers did not qualify as goods for sale – so that it denied related Quebec investment tax credit (ITC) claims.

In confirming the availability of such ITCs, Fournier JCQ found that the contracts with the customers were contracts of sale rather than contracts for services – including finding that the print shop transferred ownership of the flyers to its customers, and that essentially the only services they received from it were the printing of the flyers which were sold to them. It was irrelevant that the ultimate users of the flyers did not pay for them.

The concept of equipment acquired to be used directly or indirectly primarily in the manufacturing or processing of goods for sale or lease appears in various contexts including the description of a Class 29 depreciable property.

Neal Armstrong. Summary of Imprimeries Transcontinental Inc. v. Agence du revenu du Québec, 2025 QCCQ 1926 under Class 29.

An individual agreed to sell all the shares of a corporation except that he also agreed with the purchaser that he would retain a preferred share in that corporation on which he would receive a dividend equal to a percentage of any damages award to the corporation in its action against a 3^rd party for lost profits – but that if the law suit was unsuccessful, he would reimburse the corporation for certain of its legal fees. The corporation received an unfavourable decision in the action, and the individual reimbursed legal fees related to the litigation - and also requested the redemption of his preferred share.

In finding that the individual (Mr. A) likely could not deduct his reimbursement payment, CRA stated:

… Mr. A's undertaking to reimburse the legal costs of the corporation only took effect if the corporation received an unfavourable decision … . This court decision then eliminated any possibility of dividend income … . In short … it becomes difficult … to demonstrate the existence of a sufficient link between the expense and Mr. A's source of property income.

This is debatable. The purpose for incurring the reimbursement obligation might instead relate back to the individual’s purpose at the time of the agreement, namely, generating the prospective dividend income.

Neal Armstrong. Summaries of 26 February 2025 Internal T.I. 2023-0985151I7 F under s. 18(1)(a) – legal fees and s. 42(1)(b)(ii).

CRA has published a revised version of its Notice on cryptoasset mining. This notice has been updated to clarify the types of crypto mining arrangements that would be indicative of a person and a mining pool operator not being members of the same mining group for the purposes of s. 188.2. Being members of the same mining group could have the effect of deeming otherwise-taxable supplies made by the person to the operator not to be taxable supplies.

A “mining group” is a group of persons who agree to contribute property or services to perform mining activities together and who share mining payments in respect of the mining activities.

CRA considers that a person shares mining payments when the person shares in the risk of success in the mining activities of the group. Accordingly, where a person earns compensation that is determined based on an estimate of potential mining payments and the amounts are not adjusted to the actual mining payments, the person may not be considered to share in the mining payments.

For example, where a person is paid by the mining pool operator for the contribution of computing resources by the person and the payment is based on the expected value of the number of blocks validated, calculated based on the expected block subsidy (or the expected block subsidy and expected transactions fees), regardless of whether the activity gives rise to an actual block subsidy or transaction fee, the person is considered to bear no risk in the success of earning the block subsidy and transaction fees so that inter alia its services to the operator generally are taxable supplies rather than being deemed under s. 188.2 not to be supplies.

Neal Armstrong. Revised summaries of GST/HST Notice No. 324, "Mining Assets in respect of Cryptoassets" June 2025 under ETA s. 188.2(5) and s. 123(1) – consideration.

A golf club relying on the s. 149(1)(l) exemption sold a severed parcel of land in 2024 that had been owned for 35 years (1990 to 2024) and used as a golf range for 5 of those years (1998-2002) and otherwise was vacant. In finding that the gain was not exempted pursuant to the exemption in s. 149(5)(e)(ii) for “property used exclusively for and directly in the course of providing the dining, recreational or sporting facilities provided” by the golf club for its members, CRA stated that s. 149(5)(e)(ii) “is intended to only exclude taxable capital gains from property that is required and used exclusively to meet the objectives of the tax-exempt NPO” and that the limited historical use in this case was “insufficient to meet the threshold of being property used exclusively for and directly in the course of providing facilities to members.”

Neal Armstrong. Summary of 6 May 2025 External T.I. 2024-1031071E5 under s. 149(5)(e)(ii).