Table of Contents


Chen v. Canada, 2023 FCA 146

purchasers included two individuals who had no entitlement to acquire beneficial ownership

In order to satisfy lender requirements, the agreement for the purchase by Ms. Chen of a new home added her two (unrelated) godparents as named purchasers. LeBlanc JA found that their addition meant that the purchase did not qualify for the new housing rebate given that, prior to a 2021 amendment to s. 262(3), every purchaser of a new home was required to be acquiring for own occupation or to be related to such an occupier. In this regard, he referred (at para. 13) to Cheema as standing for the proposition that:

The fact that someone was acquiring a new house only as a trustee and with no beneficial interests in the property was of no consequence; there was no exception for trustees (Cheema at paras. 93-95). What mattered at the time … was “the relationship of the person acquiring the [house] to the builder—one of purchase and sale—[…], not the relationship between co-purchasers” (Cheema at para. 94).

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 254 - Subsection 254(2) - Paragraph 254(2)(b) Cheema followed regarding purchasers including those with no beneficial entitlements 211
Tax Topics - General Concepts - Stare Decisis stare decisis applies horizontally 111

Calgary (City) v. Canada, [2012] 1 S.C.R. 689, 2012 SCC 20

mere provision of earmarked funding did not render the Province a recipient

The City of Calgary unsuccessfully submitted that its activities of acquiring public transit assets and making them available for use in its transit system (which it labelled the "transit facilities services") constituted a separate taxable supply made to the Province of Alberta (which provided funding therefor) rather than being part of its making of exempt municipal transit services to the public. Although the transit facilities services might have been a separate supply made to the Province if the Province had a statutory obligation to provide municipal transit services which was being relieved by the provision by the City of these services, or if the funding agreements between the City and Province required the City to provide these services rather than merely to properly account for the funds received, neither proposition applied. Accordingly, the Province was not the recipient of the transit facilities services, viewed as if they were a supply separate from the municipal transit services made to the Calgary public.

After stating (at para. 62) that "Nothing in the ETA requires a supply to have only one recipient," Rothstein J dealt with the argument (at para. 63) "that because the Province contributed grant funding to the City, the Province was a recipient of the supply of municipal transit services." Rothstein J. noted (at para. 65) that this would not assist the City as the municipal transit services (the exemption for which in Schedule V, Part VI, s. 24 did not require that the public be the exclusive recipient of the supply) would continue to be exempt under this view.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 24 122
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Business "undertaking" included constructing transit system 68
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply alleged separate supply: a preparatory component 291

Canada v. Merchant Law Group, 2010 FCA 206

law firm did not incur disbursements as agent for its clients

A Saskatchewan law firm failed to provide evidence establishing that its clients rather than it were liable for the costs incurred by it in respect of searches, appraisal reports, accident reports, courier costs, transcripts, investigation reports, hospital records, security reports, medical reports and searches and certificates. Accordingly, the firm was required to collect and remit GST when it made a charge in respect of such disbursements to its clients.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Agency no evidence that law firm client assumed liability to suppliers to law firm 197

Commission Scolaire des Chênes v. Canada, [2002] GSTC 11, 2001 FCA 264

Ministry of Transport was the recipient of student busing services which it funded

(Correctness questioned in City of Calgary at para. 65.)

Student busing services were found to have been provided by the Appellant school board to the Ministry of Transport rather than to the students given that it was clear that the service had to be provided by the board, failing which subsidies (which largely or completely covered the cost of the service) would not be paid to the board by the Ministry. Noël J.A. stated (at p. 11-13) that:

"A payment will be regarded as consideration if it is directly linked to the supply of a good or a service by the person who received the payment ... ."

Words and Phrases
Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Consideration provincial subsidy was paid only if busing services provided 192

See Also

LBL Holdings Limited v. The King, 2023 TCC 130

the recipient of flash sales occurring on a reserve was the status Indian who was liable to pay the cash sales price

A Sobeys subsidiary (“LBL”) sold $98 million of tobacco products during the 14 months starting in January 1999 to a status Indian (Roberta MacNaughton) operating a variety store on an Indian reserve. As soon as LBL delivered the products to the store vicinity, and it received the cash consideration, the products were loaded onto the waiting trucks of customers, in turn, of Roberta MacNaughton. The Minister’s position was that LBL sold the tobacco products to such third-party customers who were not status Indians, with MacNaughton being compensated for her involvement in this scheme through volume rebates – so that such sales were not exempted under s. 87 of the Indian Act.

Visser J found that MacNaughton was the “recipient” of such sales, i.e., there was an oral agreement between her and LBL to purchase the products and she was liable under that agreement to pay LBL therefor. He further stated (at para. 142):

I also note that the sale of the Tobacco Products from [LBL] to Roberta MacNaughton often resulted in a resale to her customers almost simultaneously. They were in essence flash sales, which are common types of sales.

Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Federal - Indian Act - Section 87 status Indians were the recipients of flash sales made to them on the reserve 339

Garg Investments Inc. v. The King, 2023 TCC 67 (Informal Procedure)

the recipients of a supply were the agents named in the purchase agreement, not the beneficial purchaser

A claimant of the new residential rental property rebate (NRRPR) is required under s. 256.2(3)(a) to be the “recipient” of the supply of the property meaning, generally, that it is liable for the consideration for the supply under the purchase agreement. A corporation which took title to newly-constructed residential properties which it paid for with its own funds and rented out, was denied the NRRPR because it was not named in the purchase agreement (the builder required that individuals be named as the purchasers, so that the individual shareholders of the corporation were so named).

McPhee J noted that Cheema (dealing with the new housing rebate under s. 254) made a similar finding, and stated (at paras. 44-45):

Similar to section 254, subsection 256.2(3)(a) does not distinguish between beneficial and legal ownership, so it is of no consequence that the three related individuals acquired the Subject Properties as bare trustees of the Appellant. …

Similar to the Cheema decision, it is the relationship between the purchaser and the seller that is relevant to the entitlement to the NRRPR rebate, not the relationship between the co-purchasers.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 256.2 - Subsection 256.2(3) - Paragraph 256.2(3)(a) NRRPR was unavailable to beneficial recipient who was not named in the purchase agreement 322

Westcoast Energy Inc. v. The Queen, 2020 TCC 116 (Informal Procedure), aff'd 2022 FCA 57

employees rather than employer were the recipients of health care services even where the employer paid the health care provider directly

Westcoast reimbursed (through Manulife as its agent) employees who had incurred various health care services – including some which were GST/HST-taxable, namely, acupuncture, massage therapy, naturopathy and homeopathy services. Sommerfeldt J found that the employees were the recipients of these taxable services notwithstanding that there generally was no written contract with the care provider and, in some instances, the health care provider was paid directly by Westcoast (through Manulife). In this regard, he stated (at para. 53):

[W]hen an employee of Westcoast or a family member attended upon a health care provider to obtain a Subject Service, even in a direct-billing situation, it was the employee or family member (and not Westcoast or Manulife) who entered into the agreement with the health care provider for the provision of the service. Under that agreement for the provision of the Subject Service, it was the employee or family member who was liable to pay the consideration for that service. In a direct-billing situation, pursuant to the assignment by the employee to the health care provider of the employee’s right to be reimbursed by Manulife (on behalf of Westcoast), in conjunction with the direct-billing arrangement between the health care provider and Manulife, and using money from the Operating Fund, Manulife, on behalf of Westcoast, satisfied the employee’s or family member’s obligation to pay the consideration. However, the direct-billing arrangement did not negate or vitiate (although it satisfied) the employee’s or family member’s liability under the agreement to pay that consideration. Thus, it is my view that paragraph (a), and not (b), of the definition of "“recipient” in subsection 123(1) of the ETA," is the operative provision in this situation. Accordingly, as the employee or family member was the person liable, under the agreement for the supply of the Subject Service, to pay the consideration for that service, it was the employee or family member (and not Westcoast) who was the recipient of the service.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 175 - Subsection 175(1) - Paragraph 175(1)(b) an employer was not entitled to ITCs for the GST/HST on reimbursed employee health care services 472
Tax Topics - Excise Tax Act - Section 170 - Subsection 170(1)) - Paragraph 170(1)(b) - Subparagraph 170(1)(b)(ii) s. 170(1)(b)(ii) exception conceded to apply 221

Stewardship Ontario v. The Queen, 2018 TCC 59

those subject to statutory user charges were "recipients"

Stewardship Ontario (“SO”) was a not-for-profit corporation that operated, as part of a regime governed by the Waste Diversion Act, 2002 (Ontario) ('WD Act") an Ontario program for recycling various types of waste such as paints, solvents, batteries, empty propane tanks and antifreeze. It collected the waste and paid for its processing or disposal. “Stewards,” being persons who had a commercial connection with such waste, were statutorily responsible for paying fees to SO to reflect their reasonable share of the associated costs.

After rejecting the Crown’s argument that SO was not making supplies but instead merely performing a statutory duty, D’Arcy J found, respecting the Crown’s argument that the “Steward Fees” were a “regulatory charge” rather than a “user fee,” that they were payable by “operation of law” (i.e., under the WD Act) and thus came within the definition of consideration. He then stated (at para 119):

Under paragraph (b) of the definition of recipient in subsection 123(1) of the GST Act, the MHS Stewards are deemed to be recipients of the supply since they were the persons who were liable to pay the consideration for the supply.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply performance of a statutory duty can nonetheless by a supply 279
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Consideration statutorily-mandated waste recycling charges were consideration for a taxable supply 278
Tax Topics - Excise Tax Act - Section 141.01 - Subsection 141.01(2) statutory object of avoiding tax cascading 397
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Service "service" has broad meaning 199

2252493 Ontario Limited v. The Queen, 2017 TCC 20

named purchaser rather than alleged beneficial purchasers was the recipient of real estate sale

The vendor of a commercial property signed a sale agreement with a purchaser (Mayling) who was not registered for HST purposes – but then, on closing, was directed to transfer title to a purchaser (840 Holdings), which was HST-registered. The vendor was later informed that, in fact, 840 Holdings was purchasing on behalf of two other registered companies who had acquired beneficial co-ownership interests in the property – and who self-assessed themselves for the applicable HST.

Bocock J found that there was no contemporaneous documentation to establish that the “beneficial owners” had relieved 840 Holdings of its obligations under the purchase agreement, so that the vendor was liable for failure to charge HST on a sale to an unregistered purchaser (Mayling).

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 221 - Subsection 221(2) no relief from charging HST on a real estate sale where the purchaser’s bare trustee capacity was undisclosed 310

GEM Health Care Group Limited v. The Queen, 2017 TCC 13

no barter of managment services between affiliates/construction supplies acquired by parent as agent for owner-subs

A parent corporation ("GEM") holding a subsidiary engaged in HST-exempt activities (of operating nursing homes) reduced the non-creditable HST that the subsidiary otherwise would have borne on management fees charged by GEM to the sub, by having the group’s key executive draw a salary from the subsidiary for the performance of management services respecting the subsidiary’s homes. Sommerfeldt J accepted this approach, and rejected CRA assessments which grossed-up the fees charged by GEM to the subsidiary by the amount of the executive’s salary at the subsidiary, and conversely imputed the earning of management fees by the subsidiary from GEM.

Sommerfeldt J also accepted that the activities of the parent relating to new home construction in other subsidiaries were conducted as their agent, notwithstanding that it booked the expenditures as assets on its books and sent purported invoices for those amounts to the subsidiaries when the work was largely completed. In his view, it was quite contrived to consider that, as each brick was laid, the parent was acquiring the ownership of that brick rather than such brick becoming the property of the real estate owner (i.e., the subsidiary.)

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 153 - Subsection 153(1) no barter of management services for HST purposes between two affiliates employing the same key manager 330
Tax Topics - Excise Tax Act - Section 232 - Subsection 232(3) issuance of credit note is mandatory for ITC claim 165
Tax Topics - General Concepts - Agency construction supplies acquired by parent as agent for subsidiary owning the real estate 390

Crooks v. The Queen, 2016 TCC 52 (Informal Procedure)

“ultimate liability” doctrine indicated an accommodation-party co-purchaser of condo was not a recipient

An agreement for the purchase of a new condo by the individual appellant was amended shortly before closing at the insistence of the mortgage lender (the "Credit Union") to add her (Ms. Richards) as a co-purchaser (with Ms. Richards receiving a 1% ownership interest in the condo at closing). Hershfield J declined to follow Al-Hossain, which suggested that the combined effect of ss. 254(2) and 262(3) was to deny the new housing rebate as a (1%) interest in the condo was supplied to an unrelated person (Ms. Richards) who was not acquiring the condo as a primary residence.

He characterized the amended purchase agreement as instead entailing, at most, a supply of a 1% interest in the property by the taxpayer to Ms. Richards in consideration for Ms. Richards’ guarantee – and as not resulting in any interest in the condo also being supplied by the builder to Ms. Richards.

In addition, after referring to the “ultimate liability” doctrine in Bondfield, Hershfield J. concluded that Ms. Richards was not a recipient of the supply of the condo unit by the builder, so that s. 262(3) did not apply, stating (at paras. 44, 46):

Ms. Richard’s only liability was to the Credit Union. That was the intent of the parties… . The Appellant accepted ultimate liability for payment to the builder in the unlikely event the builder was able to make a case against Ms. Richards.

[A] party to a contract of purchase and sale whose sole intent and purpose throughout the entire series of transactions is to help the original purchaser obtain financing and who ultimately has no liability to the builder is not a “recipient” and not a “particular individual” under subsection 262(3) or paragraph 254(2)(a).

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 254 - Subsection 254(2) - Paragraph 254(2)(a) accommodation co-owner was not supplied her interest directly by the builder 451
Tax Topics - Excise Tax Act - Section 262 - Subsection 262(3) accommodation co-purchaser (for financing purposes) of condo was not a recipient of supply by builder 231
Tax Topics - General Concepts - Substance the addition of an accommodation co-purchaser (for financing purposes) of condo did not reflect the parties' true intentions 173
Tax Topics - General Concepts - Sham the addition of an accommodation co-purchaser (for financing purposes) of condo might have been a sham if done for tax purposes 131
Tax Topics - Statutory Interpretation - Benefits-Conferring Legislation interpretation to favour conferral of intended benefits 207

PDM Royalties Limited Partnership v. The Queen, 2013 TCC 270

intragroup expense-bearing agreement did not change the recipient of services rendered on IPO

The limited partnership units of the appellant were held by a sub-trust (the "Trust") of an income fund (the "Fund"). Unit subscription proceeds received by the Fund on its initial public offering ("IPO") and on a subsequent private placement of Fund units were used to acquire debt and units of the Trust, which in turn subscribed for LP units of the appellant. The appellant used those proceeds to acquire intellectual property and related rights to be used by it in a pizza franchising business. Before completion of the IPO, the Fund, Trust, appellant and its general partner entered into a "Financing Agreement" in which they agreed that all financing expense in connection with the IPO, other than the underwriters' fee, were to be incurred on behalf of the appellant; and at the same time the appellant entered into an "Administration Agreement" with the Fund in which it agreed to administer the Fund and "as agent of the Fund" to pay for all outlays and expenses incurred by it in such administration.

V. Miller J found that, as pursuant to the Administration Agreement, various expenses (principally relating to the IPO and private placement) were incurred by the appellant as agent for the Fund, the appellant was not the recipient of the related services and was not entitled to input tax credits therefor (para. 31). The Financing Agreement did not render the appellant the recipient of such supplies as the supplies were not made pursuant to that agreement (para. 26), nor could it be construed as causing there to be a re-supply of the services by the Fund to the appellant, as the services were consumed by the Fund (para. 32).

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Regulations - Input Tax Credit Information (GST/HST) Regulations - Section 2 - Intermediary no allocation on invoices 129
Tax Topics - Excise Tax Act - Section 169 - Subsection 169(1) internal agreement to allocate IPO costs was ineffective/services consumed rather than re-supplied 380

General Motors of Canada Limited v. The Queen, [2008] GSTC 41, 2008 TCC 117, aff'd [2009] GSTC 64, 2009 FCA 114

employer was contractually obligated for, and the recipient of portfolio advisory fees for employees' pension fund

The Appellant (a car manufacturer) was the administrator of various defined benefit pension plans for its employees. It directed the trustee of the plans to pay the fees of third party portfolio advisors out of the trust assets. As it was the Appellant who was contractually obligated to pay those fees, and as s. 267.1 did not deem the portfolio advisory services to have been acquired by the trust, the Appellant was the recipient of those services.

Corporation des loisirs de Neufchâtel v. The Queen, [2008] GSTC 153, 2006 TCC 339

(referred to with approval in City of Calgary.)

The appellants, which were community service agencies, received funding from Quebec City to operate summer play programs for children. Revenu Quebec assessed on the basis that this was consideration for taxable supplies by the City, notwithstanding that a supply of such services to the parents would have been exempt under Sched. V, Part VI, s. 12. Lamarre Proulx TCJ noted (at para. 52) that the City:

is, in part, the recipient of the service delivered to the [parent] third parties. The third party is also a recipient of the service, whether he has to pay part of the price or nothing at all.

She found (at para. 54) that where (as here) "there is a direct link between the subsidy and the price of the service, the subsidy must be regarded as the consideration, or part of the consideration, for the service, and it is taxable if the service is taxable." However, as it was accepted that the supply was exempt under s. 12, that consideration was not taxable.

Bondfield Construction Company (1983) Limited v. The Queen, 2005 TCC 78

original contractor remained liable for contract work and thus had “ultimate” liability

The appellant, which completed the excavation and concrete work on large construction projects and hired subcontractors to complete the projects, paid a second (new) subcontractor to remedy the deficient work of the original subcontractor. Though the appellant paid the new subcontractor, it recovered this cost by reducing the amounts paid to the original subcontractor under a “back-charge.” In finding that the original subcontractor rather than the appellant was the recipient of the supply of the remedial work (so that the appellant was not entitled to an input tax credit for the GST charges of the second contractor), Campbell J stated (at para. 123):

[W]e must determine who was “ultimately” liable to pay for the supply. .. By accepting this back-charge, the original subcontractor acknowledged its responsibility for the work deficiencies and assumed liability for the invoice. Although the Appellant’s name appeared on the face of the invoice, it was the original subcontractor, not the Appellant, that accepted ultimate liability for the invoice including the GST on that invoice.

Royal Bank of Scotland PLC v. Customs & Excise Commissioners, [2002] BTC 5280 (Court in Session (Inner House))

The Appellant, which was entitled to issue its own bank notes, entered into a reciprocal agreement with other banks pursuant to which it was entitled to a flat fee per transaction when customers of the other banks were issued bank notes of the Appellant (or bank notes of the Bank of England) through ATMs of the Appellant.

The Appellant was unsuccessful in establishing that the fees received by it were eligible for zero rating under a provision that applied to "the issue by a bank of a note payable to bearer on demand". Rather than being properly so described, the reciprocity fee payable to the Appellant was received by it in consideration of its providing to the counterparty bank a supply consisting of a service to a customer of that bank in the form of a facility to withdraw cash, in whatever form it was dispensed.

Customs & Excise Commissioners v. Redrow Group plc, [1999] BTC 5062 (HL)

The Appellant, which was in the business of building new homes, offered to prospective buyers of its homes the services of real estate agents who would act in the sale of their existing homes, and had undertook to pay the agents' fees provided that the purchase of the new house from the Appellant went through. Although the estate agents were supplying a service to the prospective buyers, the fact that the Appellant instructed them and paid their fees had the consequence that the transaction between them and the Appellant constituted a supply of services by them to the Appellant.

British Airways plc. v. Customs and Excise Commissioners, [1996] BTC 5314 (Q.B.D.)

Passengers whose flights were delayed received meal vouchers from British Airways which they could present at various restaurants in the terminal. Macpherson of Cluny J. dismissed an appeal from a decision of the Commissioners that under this arrangement there was a supply of property by the restaurants to the passengers rather than to British Airways.

Stobbe Construction Ltd. v. The Queen, [1996] GSTC 41 (TCC)

The registrant was correctly assessed for failure to collect GST on charges to its commercial tenants for property taxes, utilities and insurance.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 280 - Subsection 280(1) 67

Customs and Excise Commissioners v. Reed Personnel Services Ltd., [1995] BTC 5217 (Q.B.D.)

An arrangement under which the taxpayer provided nurses and, therefore, their services, to hospitals and received from the hospitals commission payments and also reimbursement for the nurses' salaries was characterized as an "intermediary" situation (i.e., the taxpayer acted as a mere intermediary between the nurses and the hospital introducing the two so that the nurse could provide her services to the hospital) rather than a "vicarious performance" situation (in which the taxpayer was contractually obliged to provide the services of the nurses to the hospital). Accordingly, the taxpayer was not making supplies of (exempt) nursing services to the hospitals and could deduct input tax.

Harpur Group Ltd. v. Commissioners of Customs and Excise, [1995] BVC 841

Agreements that the taxpayer entered into with gas station operators (the "merchants") and also with customers of the taxpayer were drafted on the basis that employees of the customers, who were issued cards by the taxpayer, would purchase fuel as agent for the taxpayer, with the fuel then being sold by the taxpayer to the customer. In rejecting this characterization with respect to situations where the fuel initially was property only of the merchant, the Commissioners noted (at. p. 856) that property in the fuel would pass at the pump from the merchant to the cardholder, and a measurable period of time would then pass before the cardholder signed the supply voucher. Accordingly, property in the fuel did not pass to the taxpayer, with the result that the taxpayer was not making a taxable supply of fuel to the customer.

Club 63 North v. The Queen, [1995] GSTC 75 (TCC), briefly aff'd [1996] GSTC o (FCA) I

In finding that the registrant, which provided dining, recreational and social facilities to employees of the Syncrude project in northern Alberta, was making taxable supplies to Syncrude in respect of grants received by it from Syncrude, Sobier TCJ. noted (at p. 75-4):

"The recipient of the supply, for the purposes of the Act, is the person liable to pay for the supply, even if the beneficiary of the supply is in fact a third party, as long as there is a direct link between the payment and the supply. In the instant case, Syncrude agrees to provide the appellant with monthly grants and the annual grant and the appellant agrees to provide activities and events to its members, Syncrude's employees. Syncrude derives the benefit of having good communication with its employee, better morale and therefore an increased productivity from having the appellant providing activities to its members in return [for] the grants. Consequently, Syncrude is the recipient of the supply of these activities ...".

P & O (Dover) Ltd. v. Commissioners of Customs and Excise, [1992] V.A.T.T.R. 221

employer the recipient of criminal counsel services

The appellant along with seven individual employees was charged with manslaughter in connection with the sinking of its vessel. In finding that the appellant was the recipient of legal services provided by the separate counsel for each of the individual accused, the Tribunal stated:

"The Company, the evidence shows, not only approved the choice of solicitor but it also instructed the solicitor and agreed to pay it: and the solicitor would have had no right to recover costs and fees from the individual employee were the Company to be unable to or refuse to pay for any reason. The individual employee was admittedly a client of the solicitor, but that in no way displaces the fact that the Company was a client as principal in relation to each solicitor. The solicitors' services were, therefore, provided to the Company, notwithstanding that the individual employee also received the benefit of those services."

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 169 - Subsection 169(1) 104

Administrative Policy

3 August 2022 GST/HST Ruling 229371 - Association billing of insurance amounts to members

member organizations were recipients of the insurance arranged through their umbrella association

The Organization is a member of a non-profit umbrella association (the “Association”) of member organizations similar to the Organization.

The Association acquired optional directors’ and officers’ liability insurance coverage from a licensed insurer. A member organization wishing to acquire this insurance would apply through a broker, who would determine what the premium amounts would be for each applicable member organization, and provide the Association with a breakdown of the gross premium so that it would know how much to invoice each member organization, which it would do separately from its invoicing of membership dues. If an insured member organization wishes to initiate an insurance claim, it must reach out directly to the Broker.

The insurance policy refers to the “Parent Organization” (the Association) and each insured member organization as the insureds, and provides that the Parent Organization is responsible for the payment of premiums.

In ruling that the Association was not required to charge HST on the Organization’s share of the directors and officers liability insurance premiums invoiced to the Organization, CRA stated:

[I]t is the Insurer that is making a supply of insurance to the Organization and the Association is making a separate supply of the membership to the Organization.

Such supply by the insurer was an exempted supply of an insurance policy.

GST/HST Notice No. 324, Proposed Amendment Addressing Mining Activities in respect of Cryptoassets, February 2023

Prior to s. 188.2(2), mining was commercial activity with no recipient of the supply (under “Solo Miners”)

On a publicly distributed ledger, such as a public blockchain, anyone can join and participate in the network which operates through the collective effort of each of the participants on the network. In these cases, there is typically not an agreement that sets out a legally enforceable obligation for any one person to pay the blockchain rewards or transaction fees or an enforceable right for the person that performs a mining activity of validating transactions and adding them to a publicly distributed ledger to receive these payments. There is no corresponding liability on any particular person to make any payment to the person in respect of the supply made to the cryptoasset network and there is no person to whom the service is rendered. Therefore, there is no identifiable recipient, as that term is defined in the ETA, of the mining activities supplied to the cryptoasset network.

… Accordingly, no GST/HST is applicable in respect of the taxable supply made by a solo miner that performs a mining activity and receives a mining payment before February 5, 2022.

11 August 2021 GST/HST Interpretation 184857 - Eligibility for the New Residential Rental Property Rebate

named co-purchaser of a condo was a recipient of the supply even though he did not close

Two unrelated individuals (Individual 1 and Individual 2) agreed to purchase a new condo unit for rental purposes from the builder. However, due to second thoughts, Individual 1 did not close the purchase, so that the condo unit and title thereto were acquired only by Individual 2.

CRA noted that Individual 1 qualified as a “recipient” of the supply of the unit, based on being liable for purchase price under the purchase agreement.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 256.2 - Subsection 256.2(3) a co-purchaser of a new rental property can qualify for the NRRPR, even if his co-purchaser does not 220

20 February 2019 Ruling 196070

receipt of sponsorship revenues directly by licensor of the PSB did not change the recipient status of the PSB

A public sector body (PSB) defrayed some of the expense of organizing an event at a particular centre through selling sponsorships, which included logo visibility, branding opportunities, acknowledgement during the event, and use of an exhibition booth. CRA considered that all of these items fell within the listed s. 135 items other that the exhibition booth, which was assimilated under the single supply doctrine to a non-supply under s. 135.

In finding that it made no difference that the sponsorship money will be paid to the centre directly instead of to the PSB, CRA stated:

The supplier of the sponsorship packages remains [the PSB] and the recipients (the persons liable to pay for these supplies) remain the sponsors.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 135 sponsorship revenues for an event were not subject to GST/HST after applying single-supply doctrine 247
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply supply of real estate (exhibition booth) assimilated to single non-supply of sponsorship 152

28 April 2017 Interpretation 154249

failure of person contractually liable to pay software licence fees to acquire a licence indicated it was an agent rather than recipient

Vendor sets up ATM machines (i.e., sells equipment and related software licences). X acquires equipment from the Vendor but the acquired equipment does not include the purchase of any software, which is licensed to X by the Vendor. X (a.k.a., the Assignor) then enters into a concurrent “Purchase Assignment Agreement” to assign its right to purchase the equipment (except software licences) to the Lessor (a.k.a., the Assignee) to allow the Lessor to lease the equipment back to X and “to pay the software license fees on behalf of X”. The Vendor transfers title to the equipment (except software licences) to the Lessor. The Lessor is financing X’s payment of the software license charges payable under the Acquisition agreement.

In finding that the Lessor was not entitled to an input tax credit for the HST on the invoice of the Vendor for both the equipment and the software licence fees to the extent that it relates to the latter, CRA stated:

The amount paid [by Assignee] for the software licences…was not consideration for a supply made to the Assignee, since no supply of software licence has ever been made to the Assignee. …

Consequently, the Assignee is not considered the recipient of the supply of software licences and is not entitled to claim an ITC for the GST/HST paid for them to the Vendor.

In determining who the recipient of a supply is, and who may therefore be entitled to an ITC for any tax payable on the supply, it is necessary to determine whether the supply is acquired by a person on its own behalf or as an agent on behalf of another person. The definition refers to ‘consideration for the supply’. However, in the present case, the Assignee has not acquired any supply of software licences, and is therefore not entitled to claim any ITC for the tax paid for them.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 169 - Subsection 169(1) payor of licence fees did not acquire licence and, therefore, was not recipient of supply of licence 145

GST/HST Technical Information Bulletin B-032 “Expenses Related to Pension Plans” 17 November 2015

Employer incurring consideration for third-party supplier of pension plan services

An expense, including a pension-related expense, is incurred by an employer where the employer is liable to pay consideration to a third party supplier under an agreement for a supply.

Where a pension-related expense incurred by an employer has been paid for out of plan trust assets, the CRA generally considers the amount of the payment made by the plan trust to be consideration for a supply of property or a service made by the employer to the plan trust where any of the following occurs:

  • the plan trust paid the third party supplier directly,
  • the employer invoiced the plan trust for the expense,
  • the plan trust reimbursed the employer.


An employer who is a GST/HST registrant provides a pension plan for its employees. The employer enters into an agreement with a third party (investment manager) to provide taxable investment management services in relation to the assets of the plan. The employer is liable to pay the consideration under the agreement with the investment manager and is the recipient of the taxable supply. The employer forwards the invoice from the investment manager to the plan trust, which pays the amount stated on the invoice directly to the investment manager. Since the pension-related expense incurred by the employer (i.e., the person liable to pay the consideration under the agreement for the supply) has been paid for out of the pension plan trust assets, the payment by the plan trust is consideration for a taxable supply of an investment management service made by the employer to the plan trust. …

[T]he employer is entitled to claim an ITC in respect of the tax payable to the investment manager to the extent the investment management service is acquired for supply to the plan trust in the course of the employer’s commercial activities, provided that all of the conditions of section 169… are met.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 169 - Subsection 169(1) investment management services provided to a pension plan viewed as supplied to the employer, and on-supplied to the plan 74
Tax Topics - Excise Tax Act - Section 172.1 - Subsection 172.1(5) imputation of a supply of an investment management service by employer to RPP where the fee was incured by the employer 143

B-109 "Application of the GST/HST to the Practice of Naturopathic Doctors" 31 July 2015

Fee sharing

[In] situations involving arrangements with contracted associate practitioners...generally one practitioner (principal) contracts for the services of one or more associate practitioners at the principal's place of business.

...[W]here the principal and associate have entered into a bona fide arrangement to share the fees from the associate's supplies of exempt naturopathic services, the payment made by the associate is treated as an apportionment of fees between parties and not as consideration paid to the principal for a supply. ...

Example 13 [dual supply: teaching and naturopathic service]

A naturopathic doctor contracts with a teaching clinic to supervise students at the clinic. Each student interacts one-on-one with a patient for the diagnosis and treatment of a disorder under the direction of the naturopathic doctor. The patient is invoiced by the naturopathic doctor for the service she receives. ...The naturopathic doctor also invoices the clinic for the teaching services he provides.

The GST/HST will not apply to the fee charged to the patient for the service she receives where it is an exempt naturopathic service. Although the naturopathic doctor oversees the services rendered to the patient and may have interaction with the patient, the naturopathic doctor is also making a supply of a teaching service to the clinic. Where no other exempting provision applies, the naturopathic doctor is required to charge and collect the GST/HST... .

26 June 2014 Ruling 157148 [double supply to and by pension plan employer]

double supply to and by pension plan employer

A Co is entitled to full ITCs for the GST/HST on fees paid by it to third parties in respect of its pension plan for employees including charges for administration, actuarial and investment consulting, as being the one liable to pay the fees. However:

where expenses incurred by [A Co] have been paid from the Pension Fund, we would consider [A Co] to have made a taxable supply of services for consideration equal to the invoice amounts. [A Co] would therefore be required to account for the GST/HST calculated on these amounts under sections 221, 225 and 228.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply double supply to and by pension plan employer 103

Interpretation Revenu Québec TVQ. 16-30/R1 "Nominee Agreements" 9 December 2011

7. A nominee who fails to disclose, to the supplier of an immovable, the fact that the nominee is a mandatary is acting in the nominee's own name and becomes personally bound to the supplier to pay the considerationfor the supply (article 2157 C.C.Q.). The nominee thus becomes a recipient of the supply, within the meaning of section 1 of the AQST, along with the mandator (article 2160 C.C.Q.). 8. Where instead the nominee is a QST registrant, informs the supplier of the immovable of that fact and provides the nominee's own QST registration number to the supplier, the nominee, as recipient of the supply, is personally liable for payment of the QST in respect of the supply and for remittance of the QST to the Minister, unless the nominee discloses the mandate to Revenu Québec in the manner described in point 3 of this bulletin. ... 9. It should be noted that even where the nominee, as recipient of the supply of the immovable, is personally liable for payment of the QST, only the mandator can claim an input tax refund (ITR), under section 199 of the AQST, in respect of the acquisition of the immovable, if the mandator uses the immovable or makes a supply of it in the course of the mandator's commercial activities.

29 July 2011 Headquarters Letter Case No. 122272r

In order to finance the purchase of a new condo from a builder, an individual (the "Purchaser") enters into a "Declining Partnership Agreement," or Loan Agreement, with FinanceCo which is intended to comply with the Islamic principle of declining Musharaka. Under this arrangement, Purchaser alone obtains legal title to and possession of the condo while FinanceCo obtains an equitable interest in the condo upon contributing money to Purchaser, and agrees to sell its equitable interest in the condo to Purchaser over time on a basis that permits it to earn the 'Profit" described in the Loan Agreement. As there is no indication in the agreement of purchase and sale with the builder that FinanceCo is liable to pay the consideration for the supply by the builder of the condo, CRA rules that Purchaser is liable for the GST on the value of the consideration for that supply, and that FinanceCo is not the recipient of that supply.

31 July 2003 Ruling Case No. 41263

Services provided by investment managers were found to be supplied to pension plan trusts managed by the administrator, rather than being supplied to the administrator with an on-supply to the trusts, given that the trusts had the obligation to either pay directly for such supplies of services or, where they were paid by the administrator, to reimburse the administrator for the amount so paid, and given that the parties intended that the services be for use by the trusts.

6 December 2002 Memorandum RITS 35845

A home that received funding from Public Works and Government Services Canada ("PWGSC") for providing temporary accommodation to individuals receiving medical treatment at another location was found to be making a supply to PWGSC given that PWGSC used a standing offer (indicating that the payments were for purchase purposes) and given the view of the Directorate that PWGSC was contracting-out one of its own programs rather than financially supporting the activities of the home.

GST Memorandum (New Series) 3.1 "Liability for Tax", para. 4-8

11 September 2000 Ruling File Nos. 11601-3, 11650-10 and 11750-5-1

beneficial owner was recipient of contracts entered into in name of nominee

A nominee corporation has contracted on behalf of the beneficial owner for the supply of goods and services from third parties, with the resulting contracts and invoices being in the name of the nominee. CRA accepted for purposes of s. 3(c)(ii) of the Input Tax Credit Information (GST/HST) Regulations that the beneficial owner was the recipient of such supplies.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Regulations - Input Tax Credit Information (GST/HST) Regulations - Section 3 - Paragraph 3(c) - Subparagraph 3(c)(ii) real estate nominee served as "representative" of beneficial owner for development expenditures 160

10 April 1995 Interpretation Case No. 11945-6 [B]

defendant became recipient of suing lawyer's supply by agreeing to pay the fee

Partway through an action against him, an individual determines that he will cease defending the action and pays all the fees and disbursements of the suing lawyer, who does not issue an invoice. CRA stated:

The services of the suing lawyer…are consideration for the supply of taxable services. … In this case the individual being sued is the recipient as he agreed to pay the suing lawyer… .

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply court costs not for supply 26

GST Memorandum 700-5-10 "GST Treatment of Insurance Claims"

Where counsel acts to protect the financial position of an insurer who also controls the conduct of proceedings, the legal services will be considered to have been acquired by the insurer and not the insured. Where a person performing repair services invoices the insurer, the insurer will be considered to be the recipient of the supply.

GST M 300-1 "Liability for Tax" under "Liability to Pay"

Unless no consideration is paid or is to be paid, the recipient is the person who pays or agrees to pay, rather than the person who actually receives the benefit of the supply. Where one person has agreed to pay, and another person actually pays for it, the person who was under a legal obligation to pay is the recipient.


Brent F. Murray, "Inter-Company Supplies and Expense Reimbursements", Canadian GST Monitor, No. 242, November 2008, p. 1.