Stewardship Ontario – Tax Court of Canada finds that statutorily-mandated waste recycling charges were consideration for a taxable supply

Stewardship Ontario (“SO”) was a not-for-profit corporation that operated, as part of a regime governed by the Waste Diversion Act, 2002 (Ontario), an Ontario program for recycling various types of waste such as paints, solvents, batteries, empty propane tanks and antifreeze. It collected the waste and paid for its processing or disposal. “Stewards,” being persons who had a commercial connection with such waste, were statutorily responsible for paying fees to SO to reflect their reasonable share of the associated costs.

In rejecting the Crown’s argument that SO was not making supplies but instead merely performing a statutory duty, D’Arcy J stated:

…[T]he only question that is relevant when determining whether a person made a supply is whether the person provided something. The reason why a person provided the something is irrelevant… .

As to the Crown’s argument that the “Steward Fees” were a “regulatory charge” rather than a “user fee,” he stated that they were payable by “operation of law” (i.e., under the Waste Diversion Act) and thus came within the definition of consideration.

Since SO’s costs clearly related to its cost recovery charges (the Steward Fees), CRA was directed to allow SO’s claim for full input tax credits for the HST on its costs.

Neal Armstrong. Summaries of Stewardship Ontario v. The Queen, 2018 TCC 59 under ETA s. 123(1) – supply, consideration, service, s. 141.01(2).