Farm Credit Canada – Federal Court of Appeal finds that “loan corporation” for GST/HST purposes has a broader meaning than its provincial regulatory meaning

Different types of selected listed financial institutions (SLFIs) are subject to different attribution rules for determining the blended HST rate of tax to which they are ultimately subject. One of these SLFI categories is for “a trust and loan corporation, a trust corporation or a loan corporation.” “Loan corporation” is undefined.

Farm Credit Canada (a federal Crown corporation providing financing assistance to farmers) argued that it was not a “loan corporation” because the quoted phrase above had a well understood meaning given that the provincial legislation regulating trust and loan corporations defined a “loan corporation” as a corporation that was incorporated for the purpose of borrowing money from the public (which Farm Credit Canada did not do) and then lending or investing such money. It preferred another rule for general non-loan corporations that would have given weight to much of its payroll being in low-rate provinces.

Near JA, in rejecting this submission, found that the words “loan corporation” simply mean “a corporation that makes loans.” He also found that this accorded with the rule’s likely policy, which would have contemplated a level playing field between privately-funded loan corporations and those funded with deposits from the public.

Neal Armstrong. Summary of Farm Credit Canada v. The Queen, 2017 TCC 29 under Selected Listed Financial Institution Attribution Method (GST/HST) Regulations, s. 26(1).