4 May 1999 GST/HST Interpretation HQR0001427 - Tax Status of the Right to Dispose Refuse at a Refuse Site

This is in reply to your Round Trip Memorandum dated November 12, 1998, regarding the XXXXX and the supply of the right to deposit refuse at a refuse disposal site. Specifically you ask: "Who is making the supply?" and "Is it an exempt supply by a XXXXX[.] Our understanding of the case at hand is as follows:

1. The XXXXX passed Resolution XXXXX authorizing the XXXXX find a company with the expertise to properly manage the XXXXX disposal grounds.

2. XXXXX allows a XXXXX to enter into agreements with a person, with an agency of the XXXXX, including a XXXXX Accordingly ,XXXXX as entered into a public/private partnership agreement with XXXXX[.]

3. The revenues from this partnership shall not be used to subsidize the normal operating budget of the XXXXX[.] The intent is that the funds are to be used to increase reserve fund balances, retire all outstanding debts and for special projects deemed appropriate by XXXXX[.]

4. The XXXXX is the registered owner of the land used as the disposal grounds.

5. Pursuant to the XXXXX between the XXXXX XXXXX wishes to manage, on behalf of XXXXX the existing waste disposal grounds, currently operating under the authority of XXXXX[.]

6[.] XXXXX agrees to allow XXXXX to manage the operation of the waste disposal grounds for a period of XXXXX[.]

7. XXXXX represents and warrants that it will keep the Operating Permit in good standing throughout the term of this Agreement.

8. XXXXX shall operate the waste disposal grounds in accordance with the existing Operating Permit and the applicable laws and regulatory controls, and XXXXX hereby consents to the use of the premises for such purpose and hereby authorizes XXXXX XXXXX operate the waste disposal grounds.9. Together the parties shall prepare an operating budget for the year.

10. Tipping fees for commercial/industrial solid waste shall be XXXXX[.] This revenue shall be distributed in the following manner:

xi. Operations/Maintenance: XXXXX

xii. Contingency/Closure: XXXXX

xiii. To XXXXX $XXXXX

xv. Rebate to Haulers (based on volume) XXXXX

26. When the Operations/Maintenance fund reaches XXXXX, distribution of the amount in excess of $XXXXX will be made to XXXXX[.]

27. Assets (not including the land) obtained throughout the duration of this Agreement related to landfill operations will be owned jointly by XXXXX[.]

28. XXXXX will be responsible at its own cost for providing land and access to that land, as required, and providing operations overview.

29. XXXXX will be responsible at its own cost for sales, invoicing and reporting, overall site management and daily supervision of operations, regulatory management and liaison with XXXXX[.]

30[.] XXXXX will carry XXXXX of liability insurance, per incident, for the duration of this Agreement, showing loss payable to XXXXX shall supply a copy of the policy to XXXXX[.]

31[.] XXXXX shall be liable for all real property taxes, if any, assessed or levied against, or payable in respect of the premises during the term of this Agreement.

32. XXXXX shall allow at all reasonable times unimpeded access to the premises for inspection purposes by representatives of XXXXX and such regulator authority as may exist from time to time.

33. XXXXX acknowledges that XXXXX powers as a XXXXX[.] Based on the facts set out above, our opinion is as follows:

The supply of the right to deposit refuse at the XXXXX is a supply made by the XXXXX for the consideration o XXXXX. This supply, made by the XXXXX is an exempt supply pursuant to subparagraph 20(i) of Part VI of Schedule V of the Excise Tax Act (ETA).

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact Mr. Owen Newell, A/Manager, at (613) 941-3268 or Ms. Michèle Brûlé, the undersigned, at (613) 954-4280.

M. Brûlé
A/Senior Rulings Officer
Public Service Bodies and Governments
GST/HST Rulings and Interpretations Directorate