17 July 2014 Interpretation 152176

Landowner made its real property available for the installation of solar panels and related equipment by the Investor (who retains ownership thereof) in order to generate electricity for supply to the Ontario Power Authority under the Ontario provincial micro-FIT program, with revenues being shared.

After finding that this arrangement does not constitute a joint venture, given the lack of mutual control, CRA went on to find that the activity is a prescribed activity under s. 3(1)(e) of the Joint Venture (GST/HST) Regulations, stating:

The purpose of the parties to the Agreement is to construct a facility, generate electricity, and supply it to OPA via the micro-FIT program.

Landowner made its real property available for the installation of solar panels and related equipment by the Investor (who retained ownership thereof) in order to generate electricity for supply to the Ontario Power Authority under the Ontario provincial micro-FIT program (under which only the Landowner would be an eligible participant.) Landowner shall be paid the first $X of revenue and the Investor the balance.

In finding that this arrangement does not constitute a joint venture so that the Investor (styled as operator) cannot claim ITCs on behalf of the joint venture, CRA stated:

The Landowner is merely providing access to the land for the construction of the solar project and does not possess any right of mutual control and management of the activity. … One of the characteristics of a joint venture is that the participants have a right of mutual control. … Essential strategic and major decisions such as disposition of assets and large expenditures normally require consent of all the participants.