CRA declines to discuss whether an intra-government “transfer” can be a non-arm’s length supply

A provincial government department constructs a school and then transfers it for nominal consideration to another department within the same government which is a school authority that will use the school primarily in exempt activities, although it is also registered because it engages in commercial activities including the supply of parking spaces.

CRA noted that ETA s. 155 would apply to deem the supply to be made for FMV consideration if this transfer was a supply between persons not dealing with each other at arm’s length, but did not discuss the issue of whether a transfer of property between two departments within the same government could be such a transaction, nor did it discuss whether a transfer within the provincial government can be a supply.

Neal Armstrong. Summary of 23 March 2023 GST/HST Interpretation 245296 under ETA s. 155(1).