CRA may challenge the eligibility of a joint venture manager (e.g., property manager) to be a GST operator if its only personnel are officers jointly appointed to an affiliated co-owner

CRA accepts that a corporation can qualify as a “participant” in a joint venture (so that that it is eligible for making a GST joint venture election) even if its only role is as the joint venture’s manager (i.e., having “managerial or operational control” of the joint venture) rather than having any ownership interest in the joint venture. When asked whether the corporation can still so qualify if it has delegated the performance of all its management responsibilities, CRA stated:

Where an operator has no staff and contracts out all of its responsibilities to other parties, the officers of the operator are often the same persons as the officers of the other [co-owner] participants… . This would make it doubtful whether the operator actually has managerial or operational control of the joint venture… .

This suggests that CRA could view the overlapping officers as performing their management functions for the affiliated co-owner(s) rather than for the purported manager, so that the purported manager would not be regarded as being an eligible operator.

Neal Armstrong. Summary of 26 February 2015 CBA Roundtable, Q. 12 under ETA s. 273(1).