See Also

Canadian Imperial Bank of Commerce v. The Queen, 2019 TCC 79

Aeroplan Miles were supplied by Aeroplan to CIBC as a taxable service

Under an agreement between the appellant (CIBC) and Aeroplan, as the successor to Air Canada (“AC”) (the “Agreement”), Aeroplan agreed to provide CIBC credit card holders with membership in the Aeroplan Mile program and credit Aeroplan Miles to such members, with the result that the Cardholder would generally earn one Aeroplan Mile for each dollar of purchases charged to the Cardholder's Visa AeroCard account. Aeroplan would then invoice CIBC for the Aeroplan Miles credited to the Cardholder. The Cardholder would subsequently redeem the Miles in exchange for the acquisition of property or services chosen from a menu. The Agreement provided that the fees of AC were payable by CIBC “in consideration of AC referring or arranging for Aeroplan members and other members of the public to make Card Applications and in consideration of AC performing its other obligations herein which are incidental to the foregoing.”

After finding that AC made a single supply under the Agreement, and in finding that such single taxable supply was of promotional services rather than (as submitted by CIBC) a supply of “gift certificates” exempted under s. 181.2, Visser J stated (at paras. 32-33):

[T]he true nature or raison d'être of the Aeroplan Mile Program, the … Agreement and the resulting Aeroplan Supplies is to market and promote applications for and increased use of participating CIBC credits cards (and other participating CIBC financial products such as mortgages). The wording of both the … Agreement and Aeroplan’s invoices to CIBC makes this clear. … In effect, section 9 of the 2003 Credit Card Agreement explicitly stipulates that the marketing and promotional services (the referral activities) are the predominant element of the Aeroplan Supplies and further provides that all other supplies are incidental thereto.. …

…Aeroplan Payments were computed with reference to the number of Aeroplan Miles which were issued in a particular billing period as a convenient method for calculating the value of the marketing and promotional services provided by Aeroplan to CIBC.

He also noted (at para. 32) that a key CIBC witness testified that the Aeroplan Program allowed them “to attract more customers to CIBC, which we did.”

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply Aeroplan points program occurred as single supply 256
Tax Topics - Excise Tax Act - Section 181.2 Aeroplan Miles were not gift certificates as they had no stated monetary value 183
Tax Topics - Excise Tax Act - Section 138 supply of Aeroplan Miles was ancillary to promotional services 339

Stewardship Ontario v. The Queen, 2018 TCC 59

"service" has broad meaning

Stewardship Ontario (“SO”) was a not-for-profit corporation that operated, as part of a regime governed by the Waste Diversion Act, 2002 (Ontario) (the “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.

Before finding that SO was making taxable supplies, D’Arcy J first stated (at paras. 86-87):

A service is defined even more broadly to mean anything other than property, money and certain services supplied to an employer by an employee, an officer and certain other persons. The definition of service is extremely broad. If something is not property, money or what one could call an “employee service”, then it will be deemed to be a service.

As a result of the broad definitions of supply, property and service, the provision of anything in any manner will constitute a 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 252
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Consideration statutorily-mandated waste recycling charges were consideration for a taxable supply 264
Tax Topics - Excise Tax Act - Section 141.01 - Subsection 141.01(2) statutory object of avoiding tax cascading 369
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Recipient those subject to statutory user charges were "recipients" 189

Revenue and Customs Commissioners v. Findmypast Ltd., [2017] CSIH 59

supply of genealogical records by website in satisfaction of previously purchased credits was a service

Findmypast carried on the business of providing access to genealogical and ancestry websites which it owned or in respect of which it held a licence. The search function (which only revealed that a particular set of records, e.g., the Register of births for a particular town and period, was available, but not the record contents) was available free of charge to the general public, but to access and download particular documents, customers could either take out a subscription for a fixed period or use a system known as Pay As You Go (“PAYG”) which involved the payment of a lump sum in return for which the customer received a number of “credits” (also referred to as vouchers) used to view records. The credits were only valid for a fixed period, but unused credits could be revived if the customer purchased further credits within two years. During the period in question the taxpayer accounted for value added tax (VAT) on the price of PAYG vouchers at the time when they were sold. The result was that tax was paid both for redeemed vouchers and the significant number of vouchers that remained unredeemed. The taxpayer claimed repayment of the VAT accounted for in respect of unredeemed vouchers during the period.

A preliminary issues was whether VAT should have been accounted for at the time when the vouchers were sold or when they were redeemed, having regard to s. 1(2) of the Value Added Tax Act 1994 (the “1994 Act”), which provided that “VAT on any supply of goods or services … becomes due at the time of supply” and s. 6(3) of the 1994 Act providing that generally a supply of services is to be treated as taking place at the time when the services are performed (to be read along with generally similar VAT Directive language).

Lord Drummond Young found (at paras 28, 33) respecting this issue, that a supply of services was made only at the time that particular records were downloaded:

[T]he search function cannot be considered an end in itself; it is no more than a means towards the customer’s ultimate end, namely viewing and downloading documents about the family that is being researched. … .

… The consideration for the payments made by customers to obtain PAYG credits is the ability to view or download particular items on the taxpayer’s website, and does not extend to the general search facility that is available both to customers and to the public. …

Locations of other summaries Wordcount
Tax Topics - General Concepts - Stare Decisis prior cases reviewed for principles rather than similar facts 90
Tax Topics - Excise Tax Act - Section 152 - Subsection 152(1) the time of a supply of services was accelerated by prepayment only where the services were precisely identifiable 805
Tax Topics - Excise Tax Act - Section 168 - Subsection 168(6) precise services to be purchased with credits were not yet identified 152

Club Intrawest v. The Queen, 2016 TCC 149, varied 2017 FCA 151

payment of condo operating expenses was a service

The members of the Appellant (which was a non-share Delaware corporation resident in Canada) included Canadian and U.S.-resident individuals who had been sold “Resort Points,” which could be periodically applied under a booking system to obtain access to particular resort condo units ("Vacation Homes") beneficially owned by the Appellant in Canada, the U.S. and Mexico. The Appellant paid various expenses respecting the Vacation Home operations which it recovered through “Annual Resort Fees” charged to its members. D’Arcy J found that the Annual Resort Fees were consideration for a service rather than intangible personal property, stating (paras. 237-8):

The Appellant does not provide any rights in consideration of the Annual Resort Fee. … What it supplies is the agreement to use the Annual Resort Fees to fund its operations. … This…is the supply of something other than property.

The Annual Resort Fees were "not part of the ongoing consideration the to maintain their membership in the Appellant" given inter alia that the memberships were supplied by a different entities (the "Developers" who also had acquired occupancy rights to the Vacation Homes and had sold the Resort Points giving members the rights to book stays at the homes).

Locations of other summaries Wordcount
Tax Topics - General Concepts - Agency annual fees charged by non-share corporation to its members were not reimbursements for expenses incurred by it as their agent 371
Tax Topics - Excise Tax Act - Section 142 - Subsection 142(1) - Paragraph 142(1)(d) s. 142(1)(d) only applies to a supply exclusively re real property 594
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply single supply of covering all time share operating costs 164
Tax Topics - Excise Tax Act - Section 168 - Subsection 168(1) GST collectible based on invoicing times 77
Tax Topics - Excise Tax Act - Section 306.1 - Subsection 306.1(1) objecting to quantum was sufficient particularity 169
Tax Topics - General Concepts - Ownership beneficial owner did not transfer property risk 177
Tax Topics - General Concepts - Evidence foreign law assumed the same 93

Customs and Excise Commissioners v. High Street Vouchers Ltd., [1990] BTC 5092 (Q.B.D.)

The taxpayer sold vouchers to retailers at a discount of approximately 9% from their face value, and agreed with the retailers to accept the vouchers at face value from the retailers minus a discount of 10%. In the meantime, the retailers would distribute or sell the vouchers to the public, and accept the vouchers at face value from the public in exchange for goods.

The taxpayer was found to be providing a service to the retailers for which consideration was given in the form of the 10% discount from the amount which it otherwise would have been required to pay on redemption by it of the vouchers. Accordingly, on each redemption of vouchers by the retailers, VAT was payable by the taxpayer at a rate of 15% on the amount of the discount.

Administrative Policy

25 February 2016 CBA Roundtable, Q. 7

dentists jointly employ staff so as to avoid GST

A group of dentists, who are not in partnership, wish to share the costs of staff such as receptionists and bookkeepers and also are shared employers of the staff, so that all of the staff remuneration paid by each dentist is exempted from GST/HST as a result of being paid qua employer. CRA indicated that it can accept such an arrangement as being valid notwithstanding that all of the source deductions are handled on the payroll account of only one of the dentists, who does the remittances, and source deduction and T4 reporting, as agent for the other dentists as well as on her own behalf – and also pays the staff remuneration as agent and is reimbursed on a pro rata basis by the other dentists.

In addressing the GST/HST consequences, CRA stated:

As each dentist is an employer at law of each staff member, no staff member employed by the dentists would be supplying a service for GST/HST purposes; the definition of service in subsection 123(1)… excludes anything that is supplied to an employer by a person who is an employee of the employer in the course of or in relation to the office or employment of that person.

We consider the person who is acting on behalf of the group to be the agent of the other dentists. As the agent can recover the respective portions of the remittance from the other dentists, we consider that the agent is being reimbursed for amounts it pays on behalf of these other dentists, who would be considered to be principals. A reimbursement of this nature is not payment for supplies made by the agent. The reimbursement to the agent would not constitute consideration for a supply and would not be subject to GST/HST.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 96 arrangement for sharing employees not a partnership in Quebec or ROC/profit-sharing arrangement required 234
Tax Topics - General Concepts - Agency dentist handles source deductions and payroll as agent for colleagues 127
Tax Topics - Income Tax Act - Section 153 - Subsection 153(1) - Paragraph 153(1)(a) joint responsibility of joint employers 434
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Taxable Supply dentists jointly employ staff so as to avoid GST 203

Excise and GST/HST News - No. 101 March 2017

A medical facility may pay a doctor set fees for agreeing to be on call for specified periods. CRA considers that such fees are not medical services exempted under Sced. V, Pt, II, s. 5 and constitute consideration for supplies by the doctor of intangible personal property.

11 March 2016 Excise and GST/HST News - No. 98

online provision of instruction v. IPP

CRA has developed a list of factors that are generally present when an on-line supply by a school authority is a “service of instructing,” exempted from GST under Sched. V, Pt. III, s. 8, rather than a supply of “intangible personal property,” including that there is systematic instruction, monitoring or supervision provided over an extended period (e.g., weeks or months) with homework, and with assessment of competency upon completion (with the potential to flunk), and with successful completion of one activity being a prerequisite to moving onto the next level.

On the other hand, there generally is a supply of intangible personal property (e.g., admission to a workshop or seminar) where there is little individualized interaction with the participant and with mere attendance (over the activity period of a few hours or a few consecutive days) being sufficient for the participant to receive evidence of successful completion of the activity (whose purpose is merely to provide information to, or to facilitate the exchange of information amongst, participants).

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part III - Section 8 distinction between on-line supply of “service of instructing” v. supply of “intangible personal property.” 261
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Place of Amusement status of a location as a “place of amusement” for purposes of the public sector body exemption may be determined on an event by event basis 341
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part V.1 - Section 1 - Paragraph 1(e) “place of amusement” may be determined on an event by event basis 154

CBAO National Commodity Tax, Customs and Trade Section – 2013 GST/HST Questions for Revenue Canada, Q. 22. ("Assumption of ‘Under Water' Contract")

available with membership password at

A GST-registered Vendor sells resource properties to a GST-registered Purchaser, and Purchaser agrees to assume long-term contracts ("Assumed Contracts") for the processing of the properties' production at prices greater than the current market rates. The negative value of the Assumed Contracts is netted against the purchase price payable by Purchaser. CRA stated:

The definition of "service" in [s.] 123(1)… is broad, and… encompasses the assumption of the obligations of another party in return for consideration from the other party. … In this case, the Purchaser has supplied a service to the vendor and GST/HST is collectible on the consideration payable for the supply of the service.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 152 - Subsection 152(3) 105

18 February 2004 Headquarters Letter RITS 46264

A discussion of the distinction between a supply of an admission and a supply of a service of instruction. (The issue initially was raised in the context of the exemption under s. 87 of the Indian Act, which would apply to an admission (viewed as a supply of intangible personal property) on a reserve. A service of instruction generally involves the provision of systemic instruction, monitoring and supervision of the progress of the recipient, on-going testing of progress and required completion of prerequisites before entry to the course is permitted - or with completion of the course being required before moving on to another activity, and with the activity occurring over an extended period.

Technical Information Bulletin B-090 "GST/HST and Electronic Commerce" July 2002

Discussion of distinction between supplies of services and intangible personal property including:

Factors that generally indicate that a supply made by electronic means is one of intangible personal property are:

  • a right in a product or a right to use a product for personal or commercial purposes is provided, such as:
    - intellectual property or a right to use intellectual property (e.g., a copyright); or
    - rights of a temporary nature (e.g., a right to view, access or use a product while on-line);
  • a product is provided that has already been created or developed, or is already in existence;
  • a product is created or developed for a specific customer, but the supplier retains ownership of the product; and
  • a right to make a copy of a digitized product is provided.

Factors that generally indicate that a supply made by electronic means is a service are:

  • the supply does not include the provision of rights (e.g., technical know-how), or if there is a provision of rights, the rights are incidental to the supply;
  • the supply involves specific work that is performed by a person for a specific customer; and
  • there is human involvement in making the supply.

12 July 1995 Ruling File No. 11755-20

"A Tenant inducement is interpreted as being consideration for the supply of a service which occurs at the time the lease is signed.

Paragraph (c)

See Also

Key Property Management Corporation v. The Queen, 2004 TCC 210

maintenance employees working for indeterminate group companies were not their employees

The Appellant (“Key”) provided the services of its employees to 30 or more affiliated owners of rental properties and remitted all the source deductions on their salaries. In accepting that the various apartment superintendents were employed directly by the owner companies, Bowie J. accepted that the arrangements had intended to be structured “to ensure that the superintendents were employed by the owner companies and not by the Appellant, so that there would not be a taxable transaction for services of the superintendents between the Appellant and the owner companies,” and noted that “the group's accountants drafted the document, which may explain why it leaves as much doubt as it does on this issue” (para. 12). Bowie J also noted (para. 8) that it did not matter that the superintendents received letters of confirmation of employment on Key’s letterhead:

An agent may contract on behalf of a principal whose existence is not revealed to the other party.

On the other hand, Bowie J. held that Key directly employed the maintenance workers, and so that Key’s related charges to the owners were taxable, stating at para. 13):

[N]either the agent nor the principals could say with any certainty at the beginning of any given week which company would employ the worker during that week, or when, or for how long. There is simply too much uncertainty about all of these matters to characterize the relationship between the workers and the various owners as thirty or more separate contracts of employment.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Agency maintenance employees working for indeterminate group companies were not hired as agent for those companies 162
Tax Topics - Excise Tax Act - Section 169 - Subsection 169(4) documentary requirements mandatory 95

Administrative Policy

15 May 2012 Ruling Case No. 142436

employees with one source-deduction account with parent treated as jointly-employed for GST purposes

Company A, which is the parent of Company B and C, will hire, remunerate and manage employees on its own behalf and in an agency capacity for its two subsidiaries, so that they are joint employees of the three companies. It will be responsible for all source deductions, and the employees will receive a T4 only from it. Company A and B are parties to a s. 150 election. Ruling that GST/HST will not apply to the reimbursement amounts paid by the subsidiaries to Company A for their respective shares of the remuneration. CRA stated:

Where an agent remunerates a principal's employee, the amount of money the principal pays the agent as a reimbursement for the employee's wages is not consideration for a supply and therefore is not subject to tax. Therefore, since Company A acts as an agent of Company B and Company C in remunerating the Employees, the amount of money Company B and Company C pay Company A as the reimbursement for the Employees' wages is not consideration for a supply and would not be subject to tax.

However, CRA emphasized that the ruling depended on there, in fact, being a joint employment relationship, and cautioned that:

Whether an employer-employee relationship exists between any two parties is a question of fact and is determined by the CPP/EI Rulings Division based on the facts of a particular situation. The Excise and GST/HST Rulings Directorate does not determine employer/employee relationships.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply employees with one source-deduction account with parent treated as jointly-employed for GST purposes 181
Tax Topics - General Concepts - Agency parent bearing payroll and source deductions for itself and subs 46