Peloton – Tax Court of Canada finds that ITCs could be claimed in holding a “free” cycling race that generated sponsorship revenues

Peloton was a non-profit association that staged the Tour of Alberta Road Race every year. It was denied ITCs for inputs acquired to stage the race itself on the grounds that the race was produced to fulfill its overall amateur cycling goals rather than as a contractual obligation to sponsors and that, to the extent that the race was a supply, it was made to the public spectators for no consideration.

In finding that Peloton was entitled to the denied ITCs, Sorensen J stated that:

As a matter of practical and commercial reality, the Race and the Sponsorship Contracts were interdependent: the sponsors’ branding, promotional, and participation rights were inextricably linked to staging the Race. The Race formed part of the taxable supplies made to sponsors and for consideration… .

In this regard, he indicated inter alia that:

• “it is self-evident that a transactional tax should be assessed in reference to the commercial relationships created, rather than through reference to the organization’s overarching purpose”; and
• Peloton “could not meet its contractual obligations without the race” whose spectators represented “brand-building promotional opportunities” so that “the sponsorship contracts and the race formed a commercial arrangement that could not be disaggregated for GST purposes”.

Neal Armstrong. Summary of Alberta Peloton Association v. The King, 2026 TCC 32 under ETA s. 141.01(2).