Jayco – Tax Court of Canada finds that, under the UCC, goods were delivered by a U.S. manufacturer outside Canada

A U.S. manufacturer of recreational vehicles (Jayco) was found by D’Auray J to have delivered or made available the RVs to its Canadian dealers at its facility in Indiana, so that their supply occurred outside Canada and was not subject to GST/HST. Notwithstanding a statement in the Dealership Sale Service Agreements that neither party was “the agent … of the other for any reason,” she found that, in fact, Jayco arranged for the carrier (a Jayco subsidiary) to ship the RVs to Canada on behalf of the dealers rather than of it. Given that the relevant Uniform Commercial Code provisions were broadly similar to those of the Sale of Goods Act, she quoted as apropos an Ontario judicial statement that:

[I]f certain conditions are present, there may be a symbolical delivery which divests the seller’s possession … . The transfer to the buyer of a bill of lading, as representing the goods, forms a good delivery in performance of the contract.

In contrast, the documents suggested that parts sold by Jayco to the Canadian dealers were delivered on its behalf, so that their supply was made in Canada and subject to GST/HST.

Neal Armstrong. Summary of Jayco, Inc. v. The Queen, 2018 TCC 34 under ETA s. 142(1)(a) and s. 306.1(1)(a).