CRA considers that an agreement of a municipality to provide faster service was HST-taxable
In another ruling dealing with an Ontario conservation authority, that was a deemed municipality, providing services (here the provision of environmental permits) to a member municipality, CRA ruled that funding provided by the municipality in consideration for getting a dedicated staff at the authority to provide prompter permit service, was consideration for a taxable supply for HST purposes.
This result seems quite form driven. If the municipality had agreed to pay higher permit fees for the faster service, those fees presumably would have been exempted under Sched. V, Pt. VI, s. 20(c)(i).
Neal Armstrong. Summary of 29 September 2020 GST/HST Ruling 175147 under ETA Sched. V, Pt. VI, s. 20(c)(i).