Athabasca University – Tax Court of Canada finds that a University’s purpose in acquiring books for its students was their education rather than the (free) “sale” of the books to them

Athabasca University, which provided online courses to its students and delivered printed books to them without any additional charge, was entitled to a GST rebate on its purchases of the books provided that it could be considered, as required by ETA s. 259.1(2) to have acquired the Books “otherwise than for the purpose of supply by way of sale.” Lyons J applied the single supply doctrine to find that, as the University was making a single supply of education (a service) to its students, it should be considered to have acquired the books for this “ultimate” purpose rather than for the purpose of merely transferring their ownership to the students. (This latter point may have been adverting to the fact that “sale” is defined for ETA purposes to “include any transfer of the ownership of the property” - so that, technically, a sale might include a gift – but her focus instead was on there being no “supply” of the books.)

Although Finance’s Explanatory Notes indicated that the rebate was not intended to be available where the books were acquired “for the purpose of resale or to give away permanently,” this proposition was not reflected in the wording of s. 259.1(2).

Neal Armstrong. Summary of Athabasca University v. The Queen, 2016 TCC 252 under ETA, s. 259.1(2).