Montecristo – Federal Court of Appeal states that “delivery” for ETA purposes had its meaning under the Sale of Goods Act

ETA Sched VI, Pt. V, s. 12(a) zero-rates a supply of tangible personal property where the supplier “ships the property to a destination outside Canada that is specified in the contract for carriage of the property.” A Vancouver retailer of expensive watches and jewellery would accommodate customers who purchased such items (the “Jewellery“) as gifts to take with them on flights back to China by essentially arranging (by going through various hoops) to have the Jewellery personally delivered to the customers just as they were about to board their flights and just after a CBSA officer stamped a customs form attesting to the immediate exportation of the Jewellery. Dawson JA affirmed the finding below that this was not good enough to satisfy the zero-rating requirement, stating:

Even on a broad interpretation of paragraph 12(a), the appellant did not ship the jewellery to a destination outside of Canada that was specified in a contract of carriage.

As the place of “delivery” of the Jewellery was in Canada (i.e., at the Vancouver airport), its sale was taxable. In this regard, she stated:

The concept of delivery … is to be interpreted in the same manner as …delivery in the applicable sales of goods legislation (Jayco…). The British Columbia Sale of Goods Act… defines “delivery” to mean the “voluntary transfer of possession from one person to another”… [which] occurred when the customer received the jewellery at the airport in Vancouver.

Neal Armstrong. Summaries of Montecristo Jewellers Inc. v. Canada, 2020 FCA 12 under ETA Sched VI, Pt. V, s. 12(a) and s. 142(1)(a).