CRA indicates that the delivery of rented equipment to the Canadian lessee’s facilities would not result in a non-resident lessee carrying on business in Canada

A non-resident leasing company enters into an agreement outside Canada for the lease of industrial equipment to a Canadian lessee. The lessor acquires the equipment outside Canada and delivers it to the lessee’s Canadian facility. The lessor has no other relevant connection to Canada, e.g., agents, employees or facilities in Canada, soliciting of Canadian business, Canadian bank accounts or servicing obligations under the lease. CRA indicated that the non-resident would not be considered to be carrying on business in Canada for GST/HST purposes given that “the only relevant factor present in Canada … is the place of delivery, which is insufficient to conclude that the non-resident is carrying on business in Canada.”

Neal Armstrong. Summary of 23 March 2017 CBA Commodity Taxes Roundtable, Q.4 under ETA s. 240(1).