Patterson Dental – Tax Court of Canada finds that a zero-rating for epinephrine did not include a drug containing epinephrine

The taxpayer did not charge GST on its sales of anesthetic solutions containing epinephrine to dentists on the basis that it was making a supply of a drug that was “epinephrine.” However, the epinephrine had no anesthetic effect and instead acted as a vasopressor to prolong the duration of the local anesthetic.

Favreau J found that the zero-rating in Sched. VI, Pt. I, s. 2(e) was not available in part based on a distinction drawn by him between “drugs which have epinephrine as their sole active ingredient” and “those that have epinephrine combined with another active ingredient, such as the anesthetics in issue.” He also was influenced by Finance’s Technical Notes, which indicated that the drugs intended to be covered by s. 2(e) were “designed to serve as an emergency relief for patients suffering from major death threatening conditions.”

Neal Armstrong. Summary of Patterson Dental Canada Inc. v. The Queen, 2018 TCC 131 under ETA Sched. VI, Pt. I, s. 2(e).