The Cooperative, which is a non-profit organization, was established are to carry on, on a co-operative basis, pre-booked rural public door-to-door service to residents of a municipality and, accordingly, provides pre-booked (at least the day before) daily transportation services to various clients, including clients going to work locally, for per-trip fees charged to the passengers or insurance companies. The Cooperative also offers a contract or charter service to residents where it provides a driver and vehicle for events, usually weddings, for four hours to drive guests home.
The Cooperative receives funding from the province, grants from the municipal department that provides public transit service for the Municipality, grants from the Municipality for providing community-based services in rural communities within the Municipality to subsidize regular vehicle operation and maintenance costs, and a grant for providing transportation services to seniors or persons with disabilities. Although the Cooperative has members and charges membership fees, the only benefit of membership is the right to participate in and vote at the annual general meeting.
Rulings
The Cooperative’s daily transportation services are municipal transit services under Sched. V, Pt. VI, s. 1, so that the supplies of these services are exempt under Sched. V, Pt. VI, s. 24(a). The Cooperative`s contract and charter services are not municipal transit services as so defined and their supply is not exempt.
CRA stated:
[T]he Cooperative was a transit authority … as it was a non-profit organization that received funding from the Province and the Municipality to support the supply of public passenger transportation services, and all or substantially all of the its supplies were supplies of public passenger transportation services provided within the Municipality and its environs.
