CIBC – Federal Court of Appeal confirms that the predominant element supplied by a Loblaw banking sub to CIBC was a right to access Loblaw customers, rather than a financial service

A subsidiary ("PC Bank") of Loblaw had agreed with CIBC for CIBC to provide retail banking services under Loblaw’s President's Choice trademark. Webb JA noted that Hogan J in the Tax Court had “found that the predominant element of the single compound supply [by PC Bank to CIBC] was a “Bundle of Rights” [i.e., property] that allowed CIBC to solicit Loblaw’s existing and future customers for the purchase of President’s Choice Financial products.” Hogan J had gone on to find that, given that para. (r.5) of the financial service definition provided an exclusion from financial service for “property … that is delivered or made available to” CIBC “in conjunction with” CIBC selling financial products of PC Bank, the supply made by PC Bank to CIBC was taxable.

Webb JA had earlier noted that although it might seem unnecessary for (r.5) to exclude a supply of property from the supply of a financial “service,” “Parliament must have been concerned that, without the addition of this exclusion, certain supplies of property could be considered to be a financial service.”

He then concluded:

CIBC has failed to establish that the Tax Court Judge committed any palpable and overriding error in his finding that PC Bank supplied the “Bundle of Rights” to CIBC.

He also indicated that there was nothing wrong with Hogan J having made a mixed finding of fact and law (as to the nature of the supply made by PC Bank to CIBC) that was on a basis different than that argued by either party.

Neal Armstrong. Summaries of Canadian Imperial Bank of Commerce v. Canada, 2023 FCA 195 under General Concepts – Res Judicata, ETA s. 309(1) and s. 123(1) – financial service – (r.5).