Table of Contents


Club Intrawest v. Canada, 2017 FCA 151

service in relation to a cross-border vacation home portfolio split into two (GST-taxable and non-taxable) geographic components

The Appellant, a Canadian-resident non-share corporation, most of whose members had time share points which entitled them to book stays at Canadian, U.S. and Mexican resort condos beneficially owned by the corporation, receiving its annual fees from them as consideration for funding the operating costs of the time share program. The operating costs were predominantly incurred directly in relation property management of the resort portfolio but also were paid for some administrative services that did not relate directly to such properties.

In finding that this supply came within s. 142(1)(d) or 142(2)(d) (services in relation to real property) rather than s. 142(1)(g) or 142(2)(g) (other services), Dawson JA stated (at paras 82, 85):

What I take from Global Cash Access is that when applying the Act regard must be had to the predominant element of a single supply. It is an error of law to apply the Act having regard to services that do not form the predominant element of a single supply… .

…[T]the predominant element of the supply is the use of the annual resort fee to fund the operation of the Intrawest program. Because the Intrawest program operates vacation homes in Canada, the United States and Mexico, the predominant element of the supply is in relation to real property situated both inside and outside of Canada.

Respecting the conflict between ss. 142(1)(d) and 142(2)(d), which respectively deemed a supply of a service in relation to real property inside Canada or outside Canada to be made in Canada or outside Canada – so that a single supply here, which would have related to both, would have been deemed to be made both inside and outside Canada, Dawson JA found (at para. 95) that in this context of services in relation to a cross-border real estate portfolio, there were two supplies, so that the services in relation to the Canadian and foreign real estate were taxable and non-taxable, respectively:

I see no reason in principle that precludes splitting up the supply so that the supply is treated as two supplies in order to recognize that ultimately the services are inherently distinct in one important respect: the services relating to the operation of the vacation homes located in Canada are services in relation to real property situated in Canada and hence are a taxable supply – the services relating to the operation of the Intrawest vacation homes situated outside of Canada are services related to real property situated outside of Canada and hence are a non-taxable supply.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Agency absence of direct agreement that expenses were incurred as agent 250
Tax Topics - Excise Tax Act - Section 142 - Subsection 142(1) - Paragraph 142(1)(d) supplies of services re cross-border vacation home portfolio split into domestic and foreign supplies 596

Great-West Life Assurance Company v. Canada, 2016 FCA 316

characterization of single supply based on predominant elements

A third party (Emergis) provided automated claims processing services to Great-West Life, which administered or insured various client drug plans, so that the prescription drug claim of an employee would be processed at the pharmacy counter upon presentation of a magnetic card.

In the Tax Court below, Owen J ultimately found that the charges of Emergis to Great-West for this service were taxable under the Financial Services and Financial Institutions (GST/HST) Regulations, as they were "quintessentially administrative in nature," and also found that, in the absence of this Regulation, the service would have been exempt as being for the payment of insurance policy claims – notwithstanding that the Emergis service entailed the provision of taxable supplies described in para. (r.4) of the financial services definition, e.g., collecting, collating or providing information.

In the Court of Appeal, Woods JA did not comment directly on para. (r.4), but stated (at para. 48):

…[I]t is necessary to determine the predominant elements of the supply if it is a single compound supply. It is only the predominant elements that are taken into account in applying the inclusions and exclusions in the “financial service” definition.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Regulations - Financial Services (GST/HST) Regulations - Subsection 4(2) predominant character of insurance claim processing was administrative 234
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (f.1) “financial services” definition should be applied based only on the “predominant elements” supplied 232

Global Cash Access (Canada) Inc. v. Canada, 2013 FCA 269

three elements integrally connected

The appellant ("Global") enabled casino patrons to use their credit cards to purchase payment instruments similar to cheques (the "cheques") from Global which they could negotiate for cash. To this end, the patron first used his or her credit card at a kiosk on the casino premises (or at a cashier cage) to get the cheque-purchase transaction approved by the credit card issuer. The casino cashier then issued, on Global's behalf, the cheque made out by Global to the casino operator, which the casino operator then negotiated for cash provided to the patron. The trial judge found that the Casinos made three supplies to Global: allowing the kiosks on the premises, providing support services at the cashier cages, and cashing Global's cheques; and that only the third supply was of a financial service. In finding that there was a single supply made by the casino (which she later found to be a financial service), Sharlow JA stated (at paras. 25-26):

[T]here is no evidence that Global would have been prepared to pay consideration to the Casinos for any of the three elements on its own. Since the three elements are integrally connected and there is a single consideration, there is a single supply. ... Based on an interpretation of the contracts between the Casinos and Global, what did the Casinos provide to Global to earn the commissions payable by Global?

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Consideration "consideration" under law of contract 111
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (g) commercial efficacy of arrangement involving kiosk and support services turned on the advance of money 418
Tax Topics - Excise Tax Act - Section 153 - Subsection 153(1) "consideration" under law of contract 111
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (r.4) predominant element not described in (r.4) or (r.5) 179

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

alleged separate supply: a preparatory component

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 labeled 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. Rothstein J. stated (at paras. 42-43):

Applying the O.A. Brown test, the question in this appeal is whether, in substance and reality, the alleged separate "transit facilities services" supply is an integral part, integrant or component of the overall supply of "public transit services". According to the jurisprudence, if one supply is work of a preparatory nature to another supply (an "input" to that supply), then the input is a part or component of the single overall supply. ...[T]he true nature of the City's "transit facilities services", a determination to be made with common sense, was work of a preparatory nature to the supply of a municipal transit service to the public....[T]he allegedly separate "transit facilities services" [were] in fact a component of the overall supply of "public transit services" to the Calgary public.

Although the transit facilities services might have been a separate supply made to the Province, rather than being merely of a preparatory nature, 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.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - 24 120
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Business "undertaking" included constructing transit system 66
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Recipient mere provision of earmarked funding did not render the Province a recipient 256

Canada v. 1524994 Ontario Limited, 2007 FCA 74

agreements respected for supply determination purposes

In order to comply with a requirement of the Ontario Health Insurance Plan (OHIP) that it would only pay for audiology tests performed by (or under the supervision of) a physician, the respondent company entered into an agreement with two physicians which stated that the physicians would pay the company for the use of its facilities and management services, and that they would employ the company owner (an audiologist but not a physician) to conduct hearing tests for them. The Minister assessed the company on the basis that it provided the two physicians with taxable supplies of building and equipment rentals together with management services, on which it had failed to charge and collect GST. The Tax Court found, on the basis of oral evidence that the agreement did not reflect the true legal relationship between the parties, that there was no taxable supply by the company.

In reversing this decision, Décary J.A. stated (paras. 13, 16):

Parties cannot elect to have an agreement valid for OHIP purposes and claim its invalidity for GST purposes....[T]he law will not permit a party to defend a tax claim by asserting that it made an intentional misrepresentation to another (OHIP) from which it derived a benefit (OHIP fees).

Locations of other summaries Wordcount
Tax Topics - General Concepts - Agency 252
Tax Topics - General Concepts - Evidence agreement intended to deceive government 208

Hidden Valley Golf Resort Assn. v. Canada, [2002] GSTC 42 (FCA)

lease was root of transaction

The rental by the Appellant of cottage properties was a single supply of exempt residential accommodation notwithstanding that the leases gave the tenants the right to use a golf course, a clubhouse, an artificial lake and a tennis court, and the annual amounts that the tenants paid depended upon the costs incurred by the Appellant in providing such additional services. Sharlow J.A. stated (at p. 42-9) that:

"The Appellant's lots may have been more attractive than other lots because of the free access to nearby recreational facilities, but the root of the transaction is a long term residential lease."

Vanex Truck Service Ltd. v. Canada, 2001 FCA 159

charges to fleet operators for insurance and licences were taxable resupplies

The appellant orally contracted for the services of owner-operators of trucks in connection with its freight transportation business, and provided them with the option of acquiring insurance, motor vehicle and motor carrier licences ("licences"), as well as oil and fuel at discounted rates. The cost of these items was deducted on a monthly basis from the 75% of the gross revenue owed to the owner-operator by Vanex. Owner-operators were required to sign the registration of their tractors or tractors and trailers over to the Appellant for the duration of their business relationship for licencing and insurance purposes only. Vanex did not charge GST on the deductions for licences, insurance, oil and fuel. Both Vanex and the owner-operators claimed the same ITCs based on the gas credit-card receipts.

Desjardins, J.A. concluded that the appellant was making taxable supplies of insurance, fuel, oil and licences to the owner-operators. Respecting the licences, Desjardins J.A. stated:

While…the Appellant could not issue actual licences, Vanex could and did supply the owner-operators with a right to use the licences issued in its own name thus falling within the definition of "property" under subsection 123(1).

Respecting insurance:

[I]t was the right to the protection offered by the fleet policies which constituted a taxable supply of service under the provision of section 123.

As to the oil and fuel issue, Desjardins stated:

[B]y claiming input tax credits ("ITCs") on the oil and fuel which it purchased, the Appellant was acknowledging that it purchased these items, not as agent, but on its own behalf, and was re-supplying these items to the owner-operators whom it charged. Therefore, in my analysis, it was required to collect GST on that re-supply.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Agency taxable resupply (made as principal) of otherwise exempt insurance 108

See Also

Dr. Brian Hurd Dentistry Professional Corporation v. The Queen, 2017 TCC 142 (Informal Procedure)

single supply of orthodotic service

Campbell J found that an incorporated orthodontic practice was making a single supply of exempt orthodontic health services rather than (as argued by it) two supplies comprised of a zero-rated supply of medical equipment (the orthodontic appliance) and of exempt orthodontic services (e.g., adjustment and maintenance services). (Zero-rating would have generated input tax credits.) She stated:

Neither the appliance nor the service on their own can achieve the patient’s goal or objective of correcting or treating their dental issues.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - 5 single supply by incorporated orthodontist of health care services 246
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - 1 - Institutional Health Care Service - Paragraph (h) single supply of orthodontic services by incorporated orthodontic practice qua health care facility 155
Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part II - Section 11.1 hypothetical separate supply of an orthodontic appliance by an orthodontist would have been zero-rated 207
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - 1 - Institutional Health Care Service - Paragraph (b) orthodontic appliance was not a "medical prosthesis" 152

SLFI Group - Invesco Canada Ltd. v. The Queen, 2017 TCC 78

dominant element of service provided by financing SPV was financing

The manager of various mutual funds (the “Funds”) agreed to relinquish its receipt of a portion of the management fees which it otherwise would have earned (calculated as a percentage of the net asset values from time to time of the funds) and the Funds agreed to pay the same percentage amounts to a special purpose non-resident Citibank-formed vehicle (“Funding Corp”) in consideration for Funding Corp paying the brokerage commissions that were payable on subscriptions by investors for units (or shares) of the Funds. Funding Corp then immediately sold its fee-amount entitlements to Citibank.

Before going on to find that the amounts of the fees so assigned to Funding Corp were deemed by paragraph (q) of the “financial services” definition to be taxable consideration, V.A. Miller J found that Funding Corp was making a single compound supply whose “dominant element…was the daily payment of the [brokerage commissions]” (para. 95), and (at para. 101) that this dominant element would have been included in para. (a) of the financial service definition but for the exclusion under para. (q).

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (q) SPV funding MFT brokerage commissions was providing a GST-taxable management service 349
Tax Topics - Excise Tax Act - Section 217 - Imported Taxable Supply - Paragraph (a) non-resident vehicle provided taxable imported supply in funding MFT brokerage commissions 263

Persepolis Contracting Inc. v. The Queen, 2017 TCC 89 (Informal Procedure)

no evidence of implicit acceptance of agency

A company (“Persepolis”), which had been incorporated to do renovation work on a cost plus 15% basis on a building owned by a corporation whose shareholder was friends with its sole shareholder, was found not to have incurred its renovation costs as agent for that owner in the absence of convincing evidence that the owner “had implicitly accepted an agency relationship with respect to the renovations.” Accordingly, Persepolis had been correctly assessed for failure to charge HST to the owner on the costs incurred by it.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Agency 140

Stock ‘94 Szolgáltató Zrt. v Regional Customs and Finance Directorate-General for Southern Transdanubia of the National Tax and Customs Office, Hungary, Case C-208/15, [2016] BVC 45 (European Court of Justice (5th Chamber))

interest on loan to fund taxable supply was part of taxable consideration

A Hungarian company was set up to assist Hungarian farmers by lending them money to fund the purchase by them from it of current assets needed in their business. The European Court of Justice (subject to some further findings of facts to be made by the local court) essentially applied the single supply doctrine to find that the loan interest was part of the consideration for the sale of products by the company to the farmers, so that the interest was subject to VAT (even though, of course, interest on loans viewed as being for a separate supply was VAT-exempt). The Court was influenced by the facts that the loan could only be used to fund the purchases from the company (which was their sole purpose), and that the company was not authorized to make loans to anyone other than farmers.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (f) interest on a loan funding a taxable supply of goods was part of the consideration for a single supply of the goods 268

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

single supply of covering all time share operating costs

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.

In rejecting the Appellant’s submission that it “made, in consideration of the Annual Resort Fee, separate single supplies of services in respect of each Vacation Home,” D’Arcy J stated (at para. 259):

It made a single supply by agreeing to use the Annual Resort Fee to fund its operations…with the consideration being based upon the Appellant’s total estimated costs. The Appellant could only continue to operate the Intrawest Program if it incurred all of the costs…; it could not cherry-pick certain costs.

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) - Service payment of condo operating expenses was a service 201
Tax Topics - Excise Tax Act - Section 168 - Subsection 168(1) GST collectible based on invoicing times 77
Tax Topics - Excise Tax Act - 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

HMRC v National Exhibition Centre Ltd., [2016] BVC 19, Case C-130/15 (ECJ (8th Chamber))

additional “booking” charges by a service provider to those paying by credit card were not consideration for a separate supply

NEC sold tickets on behalf of third parties to various trade, sporting and concert events held by them at the National Exhibition Centre. Where the customers paid by credit card, NEC increased the ticket prices by about 10%, and retained this amount as a booking fee.

The U.K. Upper Tribunal (Tax and Chancery Chamber) referred a question to the European Court of Justice as to the principles to be applied in determining whether the card processing services of NEC came within Art. 13B(d)(3) of the Sixth Directive, which directed the exemption of “transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments… .”

Before answering this question, the Court questioned the implicit assumption in the question that the NEC booking fees were consideration for a separate supply, stating (at paras. 18, 23):

The Court, however, has already held that the additional charges invoiced by a service provider to its customers, where the latter pay for those services by credit card, debit card, cheque or cash over the counter at a bank or authorised payment agent acting on behalf of that service provider, do not constitute consideration for a supply of services distinct and independent from the principal supply of services in respect of which that payment was made (see…Everything Everywhere...Case C‑276/09…).

[I]t is for the referring court to ascertain whether, in the main proceedings, the NEC’s card processing service must be considered for VAT purposes to be a service which is ancillary to the sale of the tickets concerned or as a service ancillary to another principal service which is provided by the NEC to the purchasers of those tickets, which could be the reservation or the delivery of tickets for shows or other events and, therefore, forming with that principal service a single service with the result that that service must share the tax treatment of that principal service (see…Card Protection PlanCase C‑349/96…[and] Wojskowa Agencja MieszkaniowaCase C-42/14…).

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (a) additional “booking” charges by a service provider to those paying by credit card viewed as essentially only for exchanging information with merchant acquirer bank 537

Tele-Mobile Company v. The Queen, 2015 TCC 197

cellphone connection to a US telephone network, and transmission of call to Canada, were part of a seamless single supply to Canadian customer

The appellant ("Telus") operated a wireless carrier business which entailed providing roaming airtime ("RAT") services to customers, with Canadian billing addresses, who while in the U.S. made long-distance call to Canada. These calls essentially involved two steps, which were separately identified in the Telus billings:

  • The customer's phone connected with a local cellular site, and then to a mobile telephone switching office ("MTSO").
  • The MTSO connected the call to the Canadian recipient.

C Miller J found that Telus was required to charge GST on the fees it collected for both steps (rather than only the second step). As both steps constituted a single supply, that supply was deemed by s. 142.1(2)(b)(ii) to be made in Canada as that telecommunication service was received in Canada. After discussing Gestion Alger, BC Ferry and Jema, and after noting (at para. 27) that although "the RAT can be used independently of long distance charges, and therefore has a commercial efficacy as a standalone supply…that is only in the context of locally made calls" in the U.S. rather than calls from the U.S. to Canada, he stated (at paras. 35-36):

[The] integration approach, I believe, remains the essence of the single versus multiple supply. …Viewing the telecommunication service offered by Telus as a service of communication for customers to talk to another person, how that service is delivered is more akin to the delivery of pizza than provision of a separate stateroom service or vaccination service. The customer is simply paying to be able to make a call from his cell phone to Canada. The RAT and long distance service are fully and seamlessly integrated into making that happen.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Paragraph 142.1(2)(b) cellphone connection to a US telephone network, and transmission of call to Canada, were part of a seamless single supply to Canadian customer 278

Commissioner of Taxation v MBI Properties Pty Ltd, [2014] HCA 49

"supply" may not entail action

Before finding that leases entailed a continuous supply by the lessor including, in this case, by a subsequent lessor by virtue of the purchase of apartments already subject to the leases, the Court stated (at para. 35):

Federal Commissioner of Taxation v Qantas Airways Ltd [(2012) 247 CLR 286, [2012] HCA 41] shows that it is wrong to consider that one transaction must always involve the making of just one supply. It is similarly wrong to consider that the making of a supply must always involve the taking of some action on the part of the supplier.

See summary under s. 133.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 133 honouring of an executory contract entails a second supply 331

British Columbia Ferry Services Inc v. The Queen, 2014 TCC 305

ferrying could be and was supplied separately from staterooms

The appellant was denied input tax credits, in part, based on the supply by it of staterooms to passengers travelling on ferries (for which it made separate charges but did not charge GST) was part of the single supply of the ferry service. In allowing finding that there was a separate supply of the rental of the staterooms, Campbell J stated (at para. 65):

Common sense dictates that the provision of ferrying services remains a useful and valuable supply minus the rental of staterooms. Staterooms are not an essential component to the overall supply of transportation services. In fact, there are insufficient numbers of staterooms to accommodate every passenger, even if all of the passengers on any route wished to purchase a stateroom.

Compagnie de Gestion Alger Inc. v. The Queen, 2014 TCC 53

delivered pizza was single supply

The appellant delivered pizza through self-employed individuals acting as its agents. The costs of the pizza and delivery were separately itemized. In finding that there was a single supply, Paris J stated (at para. 37):

[T]here were two ways of obtaining the food: go to the appellant's establishment in person or place an order for delivery. In the first case, the food was made available to the customers while at the restaurant. In the second, the food was made available to the customers upon delivery. What differs is the manner in which the supply was made available to the customers. As for the interconnection and separation of elements, it is clear that it was possible to obtain the food without delivery. However, to obtain delivery without food is simply illogical. By separating the two elements, such that all that remains is the delivery, a viable and useful service or property cannot be obtained.

Caithkin Inc. v. The Queen, 2014 TCC 80, aff'd 2015 FCA 118

resupply of foster-care services

Before going on to find that the appellant ("Caithkin") was not making exempt supplies of foster care services to Children's Aid Societies (see summary under s. 2 of Part IV of Sched. V), Graham J found that Caithkin was making a "re-supply" to the Societies of "care, supervision and place of residence services" that it in turn "acquire[d] from the foster parents" (para. 24).

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part IV - 2 resupply of foster-care services 233
Tax Topics - Excise Tax Act - Section 280 - Subsection 280(1) claiming ITCs and exempt supplies at same time 68

Casa Blanca Homes Ltd. v. The Queen, 2013 TCC 338 (Informal Procedure)

possible to structure separate assignments

The appellant entered into 14 purchase agreements with a property developer to acquire lots. The appellant assigned 12 agreements to third parties for $820,865 - $634,760 for deposit recoveries (i.e., reflecting that deposits paid by the appellant to the developer would now be held by the vendor to be credited to the assignees on completion of the purchases) and $186,105 in assignment fees. The Minister applied the single-supply doctrine to treat the entire amount as consideration for an interest in real property.

Hogan J granted the taxpayer's appeal. He discussed (at paras. 13-14) the indicia in O.A. Brown, that "a factor indicative of a single supply is the degree of interconnection and interdependence of the elements" and that "conversely, a factor indicative of multiple supplies is that each alleged separate supply could be purchased individually," and referred favourably to the analysis in Barnett 2011. The assignment of the purchase agreements and of rights to the deposits were not inextricably linked, as it would be quite possible to structure a sale where there was no assignment of the deposit and the assignee gave a fresh deposit to the property developer. Accordingly, there were two supplies: of a financial instrument and of real property. Alternatively, "a deposit can be characterized as a pool of money retained until such time as it is applied in partial payment or forfeited" (para. 32), and a supply of money is not a supply of property or a service under the ETA. Either way, the consideration paid for the deposit recoveries was not taxable.

Words and Phrases

Jema International Travel Clinic Inc. v. The Queen, 2011 TCC 462

consultation and vaccination could be separately useful and could be provided separately

The appellant provided advice to persons traveling outside of Canada respecting vaccinations that should be obtained before traveling to certain countries, and also provided those vaccines. No vaccination was given without first having a consultation, which could in fact result in no vaccination being necessary. In finding that the appellant made separate supplies of consultation and vaccination services, D'Arcy J stated (at paras. 35-36):

[A] person may attend at the clinic and the nurse may determine that he or she does not require any vaccines. The supply of the consultation has been made, but there is no supply of a vaccine. In other words, a supply of the vaccine is not required to make a supply of the consultation. …

…In addition, the supply of the consultation is a useful service even if a supply of a vaccine is not made.:

Royal Bank of Canada v. The Queen, [2007] GSTC 122, 2007 TCC 281

taxable supply of frequent flyer points

A Canadian airline ("CAIL") entered into an agreement with the appellant ("RBC") to promote use of RBC's credit card and to honour frequent flyer points to be awarded by it to RBC at the rate of one Point for every dollar of qualifying credit spending. In finding that such payments by RBC were the consideration for a taxable supply by CAIL of Points, Hershfield J stated (at para. 28):

Everything CAIL did from being involved in establishing the terms of the credit facility to advertising the program was to promote the use of the card by the issuance of Points and that is what it was paid for – the issuance of Points.

By contrast, in Customs and Excise Commissioners v. Civil Service Monitoring Association, [1998] BVC 21 (Eng. CA), where the participation of an automobile association in a credit card program was found to be exempt because the association was involved in the design and operation of the program, "the substantive element and real character of the supply…was to arrange favourable, special credit terms and benefits for its members from the financial institutions granting the credit facility….[and] there was no other supply, like a supply of Points" (para. 35).

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service taxable supply of frequent flyer points 140
Tax Topics - Excise Tax Act - Section 181 - Subsection 181(1) - Coupon frequent flyer points could be coupons 110
Tax Topics - Excise Tax Act - Section 181.2 frequent flyer points not gift certificates 119
Tax Topics - Excise Tax Act - Section 278 - Subsection 278(1) s. 278(2) precluded direct collection on assessment of recipient until supplier released from remittance obligation 257
Tax Topics - Excise Tax Act - Section 296 - Subsection 296(1) - Paragraph 296(1)(b) no double taxation in s. 296(1)(b) assessment of purchaser because supplier had been released from its remittance obligation under CCAA plan 252

Canada v. Libra Transport (BC) Ltd., [2001] GSTC 57, Docket: 98-2151-GST-G, aff’d 2002 FCA 347

trucker presumed not to be an unlicensed insurer

The appellant (“Libra”) carried on a truck transport business at volumes which exceeded the capacity of its own four rigs, so that it contracted with over 20 subcontractors, who owned their own rigs and operated them under the Libra umbrella. As Libra could obtain insurance at more favourable rates, it arranged coverage for the various vehicles, with the premiums broken down on a vehicle by vehicle basis, and recovered the premiums from the subcontractors on a monthly basis. Highway transport licences were handled on a similar basis.

Bowie J stated (at para. 13):

[O]nly an insurance company licensed to do so may sell insurance, and only a provincial government may sell motor vehicle licences…

He also did not agree that separate consideration needed to be received for the insurance and licences, stating (at para. 14):

I know of no reason that would prevent [Libra] from supplying its services as an agent to obtain licences and insurance along with other services for a single consideration.

Vanex Truck Service was distinguished (at para. 17) on the basis that :

[W]hat Vanex supplied to the drivers was the right to drive their vehicles with the benefit of licences and insurance for which it had paid…[and] the Appellant does not appear to have advance an argument based on agency in that case.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Agency trucker presumed not to be an unlicensed insurer 167
Tax Topics - General Concepts - Illegality trucker presumed not to be an unlicensed insurer 50

Skylink Voyages Inc. v. The Queen, [1999] GSTC 119 (TCC)

The registrant served retail travel agencies by booking and purchasing airline tickets for the agencies' customers, which resulted in the receipt by it of commissions from the airlines. If the customers cancelled or revised their travel plans, the travel agencies were liable to pay an amount to the registrant, indicated as a penalty, cancellation charge, or, where appropriate, a replacement charge (collectively, the "cancellation charges").

Archambault J found that the registrant was obligated to collect GST on the cancellation charges on the basis that the fees arose from a taxable supply of services. After noting that the registrant's usual business model was to earn commissions from the airlines on ticket sales, Archambault J stated:

However, if no ticket is issued by the airline, Skylink is not entitled to a commission. And yet Skylink has provided services: it has done the necessary searches in the airlines; reservation systems and made a reservation. ... Regardless of whether that payment be charcterized as cancellation charges, penalty or replacement charges, its true nature is remuneration for services which Skylink has provided to the retail agencies.

Beynon and Partners v. Customs and Excise Commissioners, [2005] 1 WLR 86, [2004] UKHL 53

Doctors who personally administered drugs (e.g., vaccines) or other medical devices (e.g., contraceptive devices) to a patient were found to be making a single supply of a medical service to the patient rather than a separate zero-rated supply of the drugs or devices. Lord Hoffmann noted that in considering the question of whether transactions should be regarded as a single supply or as two or more distinct supplies, it should not be necessary to go back any further than the Card Protection case ([1999] 2 AC 601), and upheld (at p. 92) the finding of the VAT Tribunal that

Applying the guidance provided by the Court of Justice in the Card Protection case ... the personal administration of drugs to the patient by a doctor was merely ancillary to his supply of exempt medical services.

Canada Trustco Mortgage Co. v. The Queen, 2004 TCC 792

sale of mortgages on fully-serviced basis

The appellant ("CTM") sold mortgage loans made by it to securitization trusts and serviced the sold mortgages including collecting and accounting for payments, and dealing with renewals and defaults. It did not explicitly charge the trusts for these services, but recorded fees fo such services in its financial statements. In finding that there was a single supply of a financial service by CTM (failing which , the rule in s. 138 or 139 would have applied), Bowman ACJ stated (at para. 20):

Here we have a sale of mortgages of which the servicing is not only an integral part but is requisite as a matter of commercial exigency. … For someone other than CTM to service the mortgages would, as a practical matter, be commercially infeasible and would be inimical to the raison d'être of the transaction.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service sale of mortgages on fully-serviced basis 293
Tax Topics - Excise Tax Act - Section 138 sale of mortgages on fully-serviced basis with deferred purchase price labelling 239

Municipality of Lorraineville v. The Queen, [2004] GSTC 36, 2003 TCC 895 (Informal Procedure)

The sale of serviced lots by a municipality, with a separate (as to 94% of the total consideration) municipal infrastructure charge was found to entail two supplies (the sale of land, and the provision of infrastructure services) given that land could have been sold independently of the installation or repair of sewer and water systems and given that the breakdown between the two charges appeared clearly in the sale contract.

Blanche's Home Care Inc. v. The Queen, [2004] GSTC 30, 2004 TCC 192 (Informal Procedure)

The registrant was found to be making a single supply of institutional health care services to residents of a nursing home.

Customs & Excise Commissioners v. Plantiflor Ltd., [2002] UKHL 33, [2002] 1 WLR 2287, [2002] STC 1132', [2002] BTC 5413 (HL)

The taxpayer, which sold horticultural products by mail order, indicated in its catalogue that customers would pay an additional charge to cover the costs of postage and packing, and stated "we will then advance all postage charges to Royal Mail on your behalf." There was a separate supply consisting of the delivery of the bulbs from the taxpayer to the Royal Mail under a distinct contract between those two parties. However, under the contract between the customer and the taxpayer, arranging the delivery was ancillary to making the bulbs available; and what the customer wanted and what the taxpayer agreed to provide was bulbs delivered to the home. Accordingly, in reality, the sum paid by the customer was for one supply of delivered bulbs.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 165 - Subsection 165(1) 151

Card Protection Plan Ltd. v. Customs & Excise Commissioners, [2001] BTC 5083 (HL)

Fees which the Appellant received from credit cardholders were found to be consideration for a single supply of insurance services. After quoting the statement in Customs & Excise Commissioners v. Madgett, [1998] BTC 5440 that "a service must be regarded as ancillary to a principal service if it does not constitute for customers an aim in itself, but a means of better enjoying the principal service applied", Lloyd Slynn found (at p. 5090) that:

"If one asks what is the essential feature of the scheme or its dominant purpose, perhaps why objectively people are likely to want to join it, I have no doubt it is to obtain a provision of insurance cover against loss arising from the misuse of credit cards or other documents."

Various other services the cardholder was entitled to receive related to the administration of the scheme and were "ancillary or incidental to the main objective of the scheme, i.e., financial protection against loss".

Parker Hale Ltd. v. Customs and Excise Commissioners, [2000] BTC 5153 (QBD)

The surrender of hand guns by the taxpayer to the government and the receipt of compensation therefor constituted a supply for consideration given that there was a transfer of title to the government.

Winnipeg Livestock Sales Ltd. v. The Queen, [1998] GSTC 87 (TCC) (Informal Procedure)

The registrant, which was a livestock marketing agency, was found to be making a taxable supply of storage services rather than a zero-rated supply of feed when it provided through-load services to transporters of cattle as contemplated by section 148 of the federal Health of Animals Regulation, which provided that cattle could not be confined in a railway car for longer than 48 hours but, rather, must be unloaded for a period of not less than five hours into a suitably covered pen provided with straw, feed and water.

Sarchuk TCJ. noted (at p. 87-5) that "a through-load customer does not have the option of acquiring any of the particular elements of the service provided by the appellant separately, rather the provision of a particular element is entirely contingent on the provision of all the other required elements". As a separate matter, the registrant would agree with auction customers to store cattle, which they had purchased, at charge of $1.50 per day per head. It was found (in light, inter alia, of evidence that the charge was $2.50 per day per head in the case of third parties who had not purchased cattle) that in substance all of this charge related to the provision of feed to the cattle and, therefore, was zero-rated.

Imperial Drywall Contracting Inc. v. The Queen, [1997] GSTC 81 (TCC)

The appellant, which was a residential drywall contractor, was found not to be making supplies to unregistered subcontractors, who performed drywalling services, when it credited charges for various materials it had purchased and made available for use by them, against the amount that they otherwise were entitled to received for their services. McArthur TCJ. accepted the appellant's submission that the subtrades did not receive legal or beneficial ownership of the materials, nor did it have the right to sell the materials or use them on a job for a customer other than the appellant's.

Virgin Atlantic Airways Ltd. v. Customs and Excise Commissioners, [1995] B.T.C 5077 (Q.B.D.)

The appellant provided limousine services at no extra charge to purchasers of first class tickets on its international flights. Before finding that the full ticket price was zero-rated as being in respect of the "transport of passengers ... from a place within to a place outside the United Kingdom or vice versa", Turner J. noted (at p. 5084) that it was permissible to consider the practical difficulties which would be thrown up" if the alternative interpretation was correct and (at p. 5085) that "while it may be fairly be said that the limousine service was physically separate from the flight it was not, without great difficulty, 'economically dissociable' from the price paid for the package offered by Virgin to its Upper Class passengers".

O.A. Brown Ltd. v. The Queen, [1995] GSTC 40 (TCC)

interconnected components

The appellant fed, inoculated and branded cattle it had bought, and then sold the livestock to its customers with separate charges being made for its disbursements and a "clearing commission". The Crown assessed on the basis that the appellant was selling two things, livestock and a service, with the service not being zero-rated. In finding that there was a single zero-rated supply, Rip TCJ. stated (at p. 40-8):

"The alleged separate supplies cannot be realistically omitted from the overall supply and in fact are the essence of the overall supply. The alleged separate supplies are interconnected with the supply of livestock to such a degree that the extent of their interdependence is an integral part of the composite whole ...".

Philips Exports Ltd. v. Customs and Excise Commissioners, [1990] BTC 5082 (Q.B.D.)

In considering a marketing agreement which provided that property in goods which were manufactured by the Philips group of companies for export should pass to the taxpayer (an affiliated company) either immediately before delivery to the overseas customer or immediately before title passed to the overseas customer, Roch J. disagreed with a finding of the tribunal that in order for there to be a "supply of goods" title must rest with the transferee for a measurable length of time.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Ownership 79

Customs and Excise Commissioners v. Tarmac Roadstone Holdings Ltd., [1987] BTC 5074 (C.A.)

In finding that a parent corporation was making a taxable supply of the services of its employees to its subsidiary, Slade L.J. stated (p. 5084):

"If A agrees with B that B will perform certain services for A and that he will reimburse B for certain specified expenses which will be incurred by B in the performance of both services, the agreement to reimburse is, in my judgment, well capable of constituting sufficient consideration in law for those services. The bargain may be a bad one from B's point of view, but the courts do not enquire into the monetary adequacy of consideration."

Customs & Excise Commissioners v. Automobile Association, [1974] 1 WLR 1447 (HL)

Upon paying for membership in the Automobile Association, a member was considered to be paying not for the mere privilege of membership but for the benefits that a member received under his contract with the Automobile Association and, accordingly, the subscription price is apportionable among those services and facilities received by each member.

Administrative Policy

3 April 2017 Interpretation 164742

court costs award not consideration for a supply

A registered corporation, in a judgment for infringement of its copyright, was awarded costs on a solicitor and client scale plus GST/HST thereon. Should any GST or HST be included in its net tax calculation under s. 225(1)(a)?

In giving its interpretation that “where the Court awards judicial costs plus GST or HST directly to a winning party, there is no amount of GST or HST to be included in the net tax calculation under paragraph 225(1)(a),” CRA stated:

The costs awarded by the Court directly to the winning party are not subject to the general taxing provisions, as they do not constitute consideration for a taxable supply or a service and do not form part of the consideration paid for the lawyer’s services of the winning party. In order for a party to be the recipient of a taxable supply, the other party must be conferring something of value to him in exchange for the payment. Since the losing party has received nothing in exchange for the payment of judicial costs, there is no supply made and the payment falls outside the scope of the Act. As a result, generally, where judicial costs, including reasonable disbursements and applicable taxes are awarded by the Court to the winning party, there is no amount of GST or HST to be included in the net tax calculation under paragraph 225(1)(a). In other words, since the amount awarded is not consideration for a taxable supply, the amount equal to the GST/HST that is included does not represent an amount collectible or collected as or on account of tax that has to be included in the net tax calculation.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 225 - Subsection 225(3.1) court award of costs plus GST/HST did not affect ability to claim ITCs for legal expenses 189
Tax Topics - Excise Tax Act - Section 225 - Subsection 225(1) litigant receiving a court award of costs plus GST/HST is not required to report such tax 82

19 January 2017 Ruling 172004

contributions made by construction contractors to a workplace development fund as agreed to by their collective bargaining agent were not subject to GST/HST

The relevant provincial legislation (the Legislation) affecting the Employer’s obligations to an agent for collective bargaining in a part of the construction industry (the “Organization”) provides that the provisions of a collective agreement are binding on each employer on whose behalf an organization (such as the Organization) was bargaining collectively and that such an organization may require an employer who is bound by a collective agreement bargained for or entered into by it to pay dues to it that are reasonably related to the services performed by the registered employers’ organization in respect of its duties under the Act.

During the negotiation of the collective agreements between the Organization and the unions, it was agreed that for each hour worked by employees pursuant to the collective agreements, amounts would be contributed by each employer to support workforce development initiatives. In order to give effect to this, a “Funding Agreement” was entered into with the Organization, which provided that employers would contribute on the basis of hours worked to a trust (the “Trust,” that the Organization would collect these funds, along with Organization dues and fees, and contributions for other programs, and that the contributions for the workforce development initiatives would be forwarded to the Trust Fund.

After ruling that the contributions to the Trust Fund made by the employers through the Organization pursuant to the collective agreements were not consideration for a supply, CRA stated:

[T]he payment of amounts is an industry development fee set by [the Organization] which is authorized [under the Legislation] to do so […]. Contractors/employers are required to pay the amounts to [the Organization], who then provides it to the Trust Fund in accordance with the Funding Agreement.

There is no direct link between the contributions made by the contractors to the Trust Fund and a supply made by the Trust Fund to the contractors. The payment of amounts as an industry development fee set by [the Organization] are therefore not consideration for a supply and therefore not subject to GST/HST.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Consideration contributions, resulting from collective agreement, to workplace development fund were not conisderation for supply 144

21 December 2016 Ruling 157873

assignment fee was part of consideration for assignment

A car dealer enters into contracts with customers, which could be conditional sales contracts, instalment sales contracts, credit agreements or finance contracts with instalments, and immediately sells each contract to a lender for cash consideration. Consistently with Canada Trustco, CRA found that a separate fee charged by the car dealer on those sales was also part of the consideration for the assignment, so that the fee was also exempted.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (d) fee charged on assigning a receivable was part of the exempt consideration for the sale 197

GST/HST Technical Information Bulletin B-110 Application of the GST/HST to the Practice of Acupuncture April 2017

Principles applicable to single v. multiple supply of acupuncture supply

[T]o correctly apply the GST/HST, it is necessary to determine whether the different treatment modalities and/or property supplied to a patient constitute a single supply or multiple supplies of a service(s) or property….

[T]he terms of an agreement (that is, the treatment agreed upon and reflected in an invoice) between an acupuncturist and patient establish what the acupuncturist is agreeing to provide and what the patient is expecting to receive for the consideration paid. However, it is important to note that the manner in which the price for a transaction is set out (for example, a single price or separately identified prices on an invoice) does not by itself determine whether there is a single supply or multiple supplies….

If a single supply is being made, then the predominant element of that supply must be established to determine the nature of the supply….

Example of multiple supply of acupuncturist and massage service

Example 2

An acupuncturist in Ontario assesses a patient and determines that the patient requires both acupuncture and massage therapy to treat the patient’s tendonitis. The acupuncturist is also registered with the College of Massage Therapists of Ontario. During the patient’s visit, the patient receives 40 minutes of acupuncture and 20 minutes of massage therapy. The patient is invoiced a separate fee for the acupuncture and massage therapy according to the percentage of time each modality was performed.

Based on the facts above, it is assumed that the acupuncturist is making two separate supplies: one of acupuncture and one of massage therapy….

29 January 2016 Ruling 163020

single supply of multi-disciplinary health assessment

ACo, which is engaged in the supply of various health care services, provides an “Assessment” service, which Assessment includes physical examinations, diagnostic tests, and lifestyle counselling and results in a personalized report of findings (being a compilation of the reports from the different service providers) providing recommendations for dietary change, exercise regime and further testing. The physician who sees the patient does not review the reports from the other service providers. CRA stated:

The facts that the patient pays a single consideration for the supply and that the patient does not have the option to acquire the different elements separately or substitute elements are indicative of a single supply.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - 1 - Health Care Facility - Paragraph (a) part of facility used for multi-disciplinary preparation of health assessment reports was not for medical care 241

7 December 2016 Ruling 158637

contract cancellation fee not consideration for a supply

A registered charity, which is also registered for GST/HST purposes, charges employers or sponsors fees for providing training to apprentices, and also charges a cancellation fee if the apprentice withdraws from training during a specified time period. After finding that the training charge was consideration for a single supply that was exempted under Sched. V, Pt, V.1, s. 1, CRA went on to find that the cancellation fee also was not taxable:

The [cancellation fee] is not made in respect of any supply. Rather, it is required to be made by the employer/sponsor as compensation or indemnification for damages (e.g., loss of income from the [third party] for services rendered, inconvenience).

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 182 - Subsection 182(1) no GST/HST on a fee charged for the cancellation of an exempt supply agreement 156
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part V.1 - 1 educational services not excluded 23
Tax Topics - Excise Tax Act - Section 232 - Subsection 232(1) choice between supplier refund or recipient rebate 100

17 December 2015 Interpretation 153009

required shareholder communications not a supply

A corporation, which is not engaged exclusively in commercial activities, issues shares and pays dividends to its shareholders, who are both resident and non-resident. Before finding that the issuance of the shares and the dividend payments were financial supplies to the shareholders, CRA found that the handling by the Corporation of such shareholder matters as changes of address or ownership and lost certificates were not the making of a supply, and instead “it is performing these activities in meeting its regulatory requirements,” and “the costs incurred by the Corporation for these activities are inputs into its operations.”

CRA also found that

the following activities…also relate to the obligations the Corporation has under general corporate governance and to inputs the Corporation incurs in its operations: providing information to the shareholders on the status of the Corporation; providing support functions for the Board of Directors; and general administrative functions pertaining to the operations of the Corporation, for example, managing shareholder and Board of Directors’ meetings. These activities are not supplies.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part IX - 1 potential zero-rating re share issuances and dividends 86
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (f) dividend a financial supply to recipient 81
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (d) share issuance a financial supply to shareholder 164

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

Example 8 [nutritionist's services part of naturopathic supply]

A naturopathic doctor enters into a contract with a nutritionist to provide nutritional counselling to a patient of the naturopathic doctor. The nutritional counselling is ordered and supervised by the naturopathic doctor following an assessment of the patient. ... The patient is invoiced by the naturopathic doctor for the nutritional counselling based on an hourly rate.

Although the service is performed by the nutritionist, the service forms part of the overall naturopathic service rendered by the naturopathic doctor. The patient is a patient of the naturopathic doctor and the naturopathic doctor is ultimately liable for the provision of care to his or her patients.

GST/HST Info Sheet GI-170 "Charter Flights Supplied to Third-Party Charterers" May 2015

Single v. multiple supply

A ferry flight is generally considered to be an input to a passenger transportation service. ...

[T]he fuel surcharges and the passenger/goods handling charges incurred by the carrier at airports other than its base are costs that the carrier has no choice but to incur in providing the specific air charter. When these charges are passed onto the third-party charterers, they are part of the consideration payable for the passenger transportation service.

Other costs, such as the ferry flights and the cost of accommodation, meals and ground transportation for aircraft crew, are for elements that are not supplied to the third-party charterer. Rather, these elements are inputs consumed or used by the carrier in providing the passenger transportation service. The charges for the ferry flights and crew costs would therefore form part of the consideration payable for the passenger transportation service.

However…the excess valuation charges for baggage would be viewed as a separate charge in respect of a passenger's baggage and not part of the consideration payable for the supply of the passenger transportation service.

CBAO National Commodity Tax, Customs and Trade Section – 2014 GST/HST Questions for Revenue Canada, Q. 30.

settlement of right to receive full widget shipment not a taxable supply
available with membership password at

Supplier agrees to deliver 100 widgets to the Recipient at $10 per widget, but is only able to obtain 20 widgets. An action of the Recipient is settled by Recipient agreeing to release Supplier from all damages in exchange for a payment of $100 and for the provision by the Supplier of 20 widgets at no cost. CRA agreed that s. 182 would not apply, and that (under "general taxing concepts"), as the damages payment "appears to be entirely compensatory and is not linked to a supply of property or services," it would not be subject to GST/HST, regardless of it being made partly in kind (i.e., widgets valued at $200).

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 182 - Subsection 182(1) settlement of right to receive full widget shipment not a taxable supply 106

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) - Recipient double supply to and by pension plan employer 97

CBAO National Commodity Tax, Customs and Trade Section – 2013 GST/HST Questions for Revenue Canada, Q. 35. ("Property and Services Offer in a Senior Citizen Residence")

available with membership password at

In its 2 May 2012 Tax News Item "Property and Services Offered in a Senior Citizens' Residence," Revenu Quebec indicated that various services would be part of a single supply of residential accommodation in the residence, including meals, monitoring, housekeeping in common areas, snow removal, cable television, weekly housekeeping, laundry, group transportation as well as transportation for medical appointments and assistance with certain activities of daily living. CRA stated that it will accept the same position:

provided such services form part of a single supply the predominant element of which is that of a residential unit made by way of lease, licence or similar arrangement. The types of additional services that may be include are discussed in …GST/HST Notice 224 under "Ancillary property and services."

Audit will exercise discretion if it encounters situation in which a registrant has been acting in accordance the Policy Statement P-202 Gift Certificates as it read before the revised policy statement was released in April 2012. Audit will consider the particular circumstances of the registrant and the steps taken by the registrant to comply with the revised policy statement.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part I - 6 123

28 November 2012 Ruling 116823

A missionary receives funding for his mission work in the field from a registered charity. It is his responsibility to find churches and individuals in Canada to make donations to the charity, and to this end he speaks at various Canadian churches, and he is required to provide a written report at the end of the year. He includes the grants received by him in computing his business income for income tax purposes. Ruling that the funding received by him is a grant and not consideration for a supply.

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.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Service - Paragraph (c) employees with one source-deduction account with parent treated as jointly-employed for GST purposes 244
Tax Topics - General Concepts - Agency parent bearing payroll and source deductions for itself and subs 46

22 September 2011 Ruling Case No. 129475

A for-profit corporation (the "Corporation") provides a service for fees to the families of non-resident minor children in consideration for arranging for them to study at a Canadian school district, stay at a Canadian home and participate in eight recreational activities to be arranged by the Corporation. The students are recruited through non-resident commission agents, the Corporation contracts directly with and pays the Canadian host families and pays tuition to the school district for schooling the children pursuant to a memorandum of understanding with the school district. CRA finds that there is a single supply, and as "academic instruction is the dominant element of the supply...all the elemens included in the package have the same tax status as the dominant element," and "the Corporation is making a single supply of a service of instructing an individual in a course."

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part III - 9 151

18 February 1994 TI 11,668-1

Where the trust instrument provides that the trustee only holds legal title and conveys such title on demand according to the instructions of the beneficial owner(s) and where the obligations and responsibilities are reserved to the beneficial owner(s), the Department takes the view that the trustee is not engaged in any activity in respect of the property held in trust. Each beneficial owner would be liable to collect and account for the GST on supplies of the property made through the trustee in question.

4 April 2011 Headquarters Letter Case No. 92799

a purchaser of a block of shares in a co-operative corporation which is the beneficial owner of a recreational vehicle park thereby becomes entitled to be licensed a particular site in the park provided that the purchaser pays his or her portion of the "assessments" for common costs. Such purchase of the shares is characterized as a single supply of a license of real property.

31 March 2009 Ruling RITS 103912

residents of an assisted living facility paid a single Accommodation Fee for their accommodation and various services. The Accommodation Fee was consideration for a single supply of a residential unit so that it was exempt under s. 6 of Part 1 of Sched. V.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part I - 6 42

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

court costs not for supply

Lawyer B invoices his client for taxable legal services and court costs. CRA stated:

Court costs…are not subject to GST as no supply is provided.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Recipient defendant became recipient of suing lawyer's supply by agreeing to pay the fee 67

19 December 2003 Headquarters Letter Case No. 45870

Discussion as to whether electricity supply contracts under which there were separate charges for capacity and electricity would represent a multiple or single supply.

2 December 2003 Memorandum Case No. 41678

The sale of mortgages to a trust on a fully-serviced basis entailed the provision, as a separate supply, of mortgage servicing given that it was contemplated that a person other than the seller could service the mortgages.

24 October 2003 Ruling RITS 48006

The provision of a care and service package to residents of a retirement residence represented supplies that were separate from the provision to them of residential accommodation, with the result that such services were taxable supplies.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part I - 6 36

28 July 2003 Technical Interpretation Case No. 46063

"A damage settlement payment made by a freight carrier to its customer is generally not consideration for a supply even where the carrier acquires title to the damaged property that it was transporting. This is because, in most instances, the payment is made in order to compensate the customer for its loss, and the property that the carrier acquires ownership of, as a result of the payment, is of no value to the carrier."

Memorandum 300-6-9 "Time of Liability - Consignment Sales"

Generally, under a consignment there is a supply from the consignor to the consignee, and a supply from the consignee to the third party purchaser.

6 December 2002 Memorandum RITS 35845

The provision of temporary accommodation at a boarding home for individuals requiring medical treatment off-site represented the single supply of a right to stay at the home which, to the extent that the individual stayed for more that one month at the home, was exempted under s. 6(a) of Part I of Schedule V.

17 October 2002 Headquarter Letter 37298

The provision to residents of an assisted living facility of a "communications package" (including access to cable TV services) was a separate supply from the accommodation and other services provided to them given that they could easily use the accommodation and other services without the provision of the communications package, and they had the option as to whether or not to receive the communications package.

8 February 2002 Headquarters Letter 37008

The sale of mortgages on a serviced basis was characterized as a multiple supply rather than a single supply given that each reviewed agreement contemplated that in specified circumstances a replacement servicer would be appointed who would receive a separate fee for its services.

17 July 1995 Headquarter Letter File 11635-3

When a non-resident sells discs in Canada under a consignment arrangement with a Canadian distributor, the fact that there is a sale from the non-resident to the distributor simultaneous with the sale by the distributor to a Canadian consumer does not necessarily cause the initial contract to be considered to be concluded in Canada.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 240 - Subsection 240(1) 75

B-067 "Goods and Services Tax Treatment of Grants and Subsidies," 24 August 1992

In general, transfer payments made for a public purpose or for charitable purposes will not be consideration for a supply under the ETA unless there is a "direct link" between the payment and a provision of goods and services made to the grantor of the funding or a specified third party.

P-126 "Intra-Company Cost Allocations by Foreign-Based Insurance Companies" P-077R2 "Single and Multiple Supplies" 26 April 2004

Multiple supplies occur when one or more of the elements can sensibly or realistically be broken out. Conversely, two or more elements are part of a single supply when the elements are integral components; the elements are inextricably bound up with each other; the elements are so intertwined and interdependent that they must be supplied together; or one element of the transaction is so dominated by another element that the first element has lost any identity for fiscal purposes.... The provision of property and/or services by two or more suppliers generally indicates that multiple supplies are being made, even if the various supplies are provided together.... The acquisition of property and/or services by two or more recipients generally indicates that multiple supplies are being made.... If the recipient is not made aware of the specific elements, there is likely only a single supply.... If the recipient does not have the option to acquire the elements separately, then there is likely a single supply.

P-061 "Extension of Transferred Payment Policy" B-067 "Goods and Services Tax Treatment of Grants and Subsidies"

Discussion of the circumstances in which a transfer payment is considered to be the consideration for a supply.

GST M 300-7-7 "Co-Operative Advertising"

The agreement of one party to advertise or promote another party's product in some manner is the provision of a taxable supply.


Terry G. Barnett, "The 'Dirt' on Residential Real Estate", September 2011 CICA Commodity Tax Symposium Papers

The paper includes a discussion of the assignment of a condominium purchase contract:

Scenario for reimbursement of deposit (p. 3)

Where the purchase contract is assigned, the original purchaser will want his or her deposit returned. Similarly, the vendor will require that there by no gaps in its security. The common and convenient route therefore is for the vendor to retain the deposit and but agree that it is now held for the benefit of the assignee. Thus the assignee may be required to reimburse the original purchaser for an amount equal to the deposit.

Example/CRA position (pp. 3-4)

According to the CRA, the payment to the original purchaser to replace the deposit is also taxable.. With respect, this position is surprising and open to dispute. Suppose for example, that a purchaser entered into a speculative purchase contract for a high-end Vancouver condominium in late 2009 at a price of $2 million. The purchaser was required to provide a deposit of $700,000. Given the rapid rise in market values, it is expected that the property will be worth at least $3 million when the transaction closes in 2012. The purchaser has found an assignee who will pay a fee of $1 million for the assignment of the contract. The assignee will occupy the unit as a place of residence on completion. The vendor has consented to the assignment and has agreed to hold the deposit for the benefit of the assignee. The assignee pays the purchaser an assignment fee of $1 million and also replaces the purchaser's deposit of $700,000. The assignee therefore pays a total of $1.7 million to the purchaser. The question then is whether HST should be collected on the assignment fee of $1 million or on the total of the $1 million assignment fee and the $700,000 replacement deposit, i.e. 12% HST of $120,000 versus $204,000. According to the CRA the tax is on everything - i.e. on $1.7 million.

Single v. multiple supply/deposit as money (p. 4)

But the problem is that on closing, the assignee must pay HST to the vendor on the original contractual purchase price of $2 million. The purchase price is satisfied by a cheque for $1.3 million from the assignee and the release of the $700,000 deposit. The result is that the assignee is taxed twice on the deposit, once when the assignee pays the $700,000 replacement deposit to the purchaser, and a second time at closing when the vendor applies the deposit (which belongs to the assignee) as consideration for the purchase and collects the HST due on the full contract price. The assignee cannot recover the "double" tax. [T]here are reasons why the conclusion based on single v. multiple supply analysis is not appropriate here. First, there is a question as to whether the deposit and the assignment of the contract are inextricably linked. It would be entirely possible, for example, for the assignee to pay a new deposit to the vendor who would then release the original deposit to the purchaser. Thus the assignee is not destined to make a replacement deposit payment to the purchaser. The opportunity to structure the transfer of the contract in this manner suggests that the link between assignment of the contract and the transfer of the entitlement to the deposit is not inextricable. Further, the single v. multiple supply analysis rests on the assumption that two or more properties or services are being supplied together. An investigation is required because, if provided separately, the supplies would not bear the same GST/HST status. A supply, however, is defined to mean "the provision of property or a service in any manner". The definitions of property and services each exclude money. Thus the provision of money is not a supply under the ETA. Consequently, it is questionable whether the analysis has been correctly applied to result in a sum of money being merged with a supply of property to form a single supply.

B.S. (Simon) Thang, "EU VAT Cases and GST", Canadian Tax Focus, Vol. 3, No. 2, May 2013, p.7.

A number of European Court of Justice (ECJ) VAT decisions shed light on some potential limits to the meaning of "supply" for GST purposes, at least at a conceptual level (and recognizing that there are statutory differences). For example, the ECJ held in Mohr ([1996] EUECJ C-215/94) and Landboden 9[1997] EUECJ C-384/95) that government payments to farmers who undertook to reduce commodity production were not payments for supplies, notwithstanding that "supply of service" is defined in the directive to mean "any transaction which does not constitute a supply of goods" and includes "the obligation to refrain from an act or to tolerate an act or situation." The ECJ reasoned that the undertakings were not within the scope of the VAT because they did not give rise to any consumption; the farmers did not provide services to an identifiable consumer or any benefit capable of being regarded as a cost component of the activity of another person in the commercial chain. (Compare this reasoning with the CRA's approach in Technical Information Bulletin B-067, "Goods and Services Tax Treatment of Grants and Subsidies," August 24, 1992.) In Kretztechnik ([2005] EUECJ C-465/03), the ECJ held that the issuance of shares by a company was not a supply to the shareholders. Rather, the activity was properly characterized as the company acquiring capital and acknowledging the new shareholders' rights from their investment (the situation may be different with respect to the transfer of existing shares; see BLP Group plc ([1995] EUECJ C-4/94). Interestingly, the CRA reached the opposite conclusion in GST Policy Statement P-108, "Raising of Capital" (January 26, 1994).

Brent F. Murray, "Characterizing a Supply", Canadian GST Monitor, No. 267, December 2010, p.1.

W. Jack Millar, Brent F. Murray, "Potential Input Tax Credit Claim or Trap for the Unwary?", Sales and Use Tax, Vol. VI, No. 3, 2002 p. 326.

P.Z., W. Jack Millar, "GST and Mixed Supplies of Services and Intangibles", Sales and Use Tax, Vol. IV, No. 2, 1998, p. 199.