20 February 2019 Ruling 196070

In order to recoup some of the expense of organizing an “Event” at the “Centre”,
a public sector body (“PSB”) will seek to raise money through 5 different sponsorship packages. Sponsorship packages A, B, and C include logo visibility, branding opportunities, acknowledgement during the Event, and use of an exhibition booth. Sponsorship package E includes only the use of an exhibition booth.

In finding that all but package E were deemed not to be a supply, CRA stated:

Based on the information provided, [the PSB] does not intend to carry out any services of advertising by the means described in section 135. All the sponsorship benefits described are either promotional services (logo visibility) or the right to use the Official Marks of [the Event] (the name and logo), which would fall under paragraph 135(a) and 135(b) respectively. The only exception is the booth in the designated area, which is the right to use real property.

[Sponsorship package E] sponsors only receive the use of a booth. …

On the other hand, for [sponsorship packages A, B, and C], although the sponsors receive the use of real property, they also receive a multitude of promotional services as part of the sponsorship package. These packages are all considered a single supply of promotional services, because, amongst other things, it is not possible for a sponsor to choose which benefit it wants and to only pay that price. Therefore, the entire package would be deemed not to be a supply because of section 135 … .

A public sector body (PSB) defrayed some of the expense of organizing an event at a particular centre through selling sponsorships, which included logo visibility, branding opportunities, acknowledgement during the event, and use of an exhibition booth. CRA considered that all of these items fell within the listed s. 135 items other that the exhibition booth, which was assimilated under the single supply doctrine to a non-supply under s. 135.

In finding that it made no difference that the sponsorship money will be paid to the centre directly instead of to the PSB, CRA stated:

The supplier of the sponsorship packages remains [the PSB] and the recipients (the persons liable to pay for these supplies) remain the sponsors.

A public sector body (PSB) is defraying some of the expense of organizing an event at a particular centre through selling sponsorships, which include logo visibility, branding opportunities, acknowledgement during the event, and use of an exhibition booth. CRA somewhat generously considered that all of these items fell within the listed s. 135 items other that the exhibition booth, which it characterized as a supply of real estate. However, it then applied the single supply doctrine to find that all of the sponsorship revenues received by the PSB were not subject to GST/HST, stating:

[A]lthough the sponsors receive the use of real property, they also receive a multitude of promotional services as part of the sponsorship package. These packages are all considered a single supply of promotional services, because, amongst other things, it is not possible for a sponsor to choose which benefit it wants and to only pay that price.