CIBC – Tax Court of Canada finds that Aeroplan Miles were supplied by Aeroplan to CIBC as a GST taxable service

CIBC was charged by Aeroplan for the number of Aeroplan Miles that were credited to the cards of CIBC cardholders. CIBC argued that these fees were (1) consideration for intangible personal property (the Aeroplan Miles) that were supplied by Aeroplan, and (2) that such IPP was exempted from GST as being a supply of “gift certificates.”

CIBC perhaps should have succeeded on the first argument – but did not, because two things went against it. First, the drafting of its agreement with Aeroplan was unhelpful: it stated that the fees were paid for referral and arrangement (i.e., promotional) services of Aeroplan and that all other services of Aeroplan were “incidental.” Second, a key CIBC witness testified that the Aeroplan Program allowed CIBC “to attract more customers.”

Based on his finding that CIBC received a taxable service, it was unnecessary for Visser J to consider the second argument – but he did anyway, and found that the Aeroplan Miles did not qualify as gift certificates, stating:

Parliament intended a gift certificate to be an equivalent to money, and to have attributes similar to money. … Aeroplan Miles … fatally ... do not have a stated monetary value.

Neal Armstrong. Summaries of Canadian Imperial Bank of Commerce v. The Queen, 2019 TCC 79 under ETA s. 123(1) – supply, s. 123(1) – service, s. 181.2.