Ike Enterprises – Tax Court of Canada is inclined to consider cereal to be in the cereal aisle

After finding that the exclusions from zero-rating for basic groceries should be narrowly construed, Smith J found that crystallized ginger (which CRA sampled and found to be sweet) was not excluded as candy or confectionaries, and that some granola qualified as a breakfast cereal notwithstanding that it appeared to CRA to be packaged so as to encourage its use as a snack. However, some sticks (made of wheat, rice and spelt) were considered by him to be excluded from zero-rating as sticks or other snack foods, rather than being bread products, given inter alia that they were fried rather than baked.

Compared to earlier jurisprudence, he was less interested in whether or not the products were healthy, and more interested in how they were presented in the marketplace: the ginger and granola were sold in the baking ingredient and cereal areas of the stores; whereas the sticks were presented as a snack food.

Neal Armstrong. Summaries of Ike Enterprises Inc. v. The Queen, 2017 TCC 59 under ETA Sched. VI, Pt. III, s. 1(e). s. 1(f) and s. 1(h).