Section 122 - Application

Table of Contents

Section 122 - Application
Cases(3)
See Also(1)
Administrative Policy(2)
Related Provisions
Related Provisions
Paragraph 122(b)
Administrative Policy(1)

Cases

Canada (Attorney General) v. British Columbia Investment Management Corp., 2019 SCC 63, [2019] 4 S.C.R. 559

s. 122 does not preclude imposition of collection duties

Before going on to find that the GST in question was being borne by provincial Crown property (which would have contravened s. 125 of the Constitution Act, 1867 but for any consent thereto under Intergovernmental Agreements) rather than merely being imposed as a requirement to collect tax from non-Crown property, Karakatsanis J stated (at para. 50):

While Part IX applies in its entirety to the federal Crown, the provincial Crown’s obligations are limited to collecting and remitting GST. The provincial Crown must therefore collect and remit GST when it makes taxable supplies to private parties … .

It would not have mattered respecting the s. 125 immunity issue that the appellant (BCI) was a provincial Crown agent given that "as a statutory Crown agent, BCI enjoys the same constitutional immunity in respect of its property as the provincial Crown does" (para. 70).

In further finding that BCI was bound by the terms of the Reciprocal Taxation Agreement (RTA) and Comprehensive Integrated Tax Coordination Agreement (CITCA) between the Province and Canada under which (in the case of the RTA) Canada agreed to pay certain provincial taxes and fees and the Province agreed to pay the taxes imposed under the ETA and (in the case of the CITCA) the Province and Canada agreed to pay HST on supplies purchased by their respective governments and agents, Karakatsanis J stated (at paras. 95, 99, 102):

Various elements of an intergovernmental agreement may demonstrate an intention to create legal obligations … .

[W]hile a mandatory mechanism for resolving disputes may create a “strong presumption” that the parties intended to create legal obligations, it is not a prerequisite … .

… [T[he Agreements … resemble private law contracts and were intended to create legally binding obligations for Canada and the Province.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 104 - Subsection 104(1) statutory trust was not necessarily a “trust” 271
Tax Topics - Other Legislation/Constitution - Constitution Act, 1867 - Section 125 ETA taxes that would be borne by portfolio of which a Crown agent was legal owner would contravene s. 125 298
Tax Topics - Statutory Interpretation - Interpretation Act - Section 8.1 “trust” interpreted in accordance with its common law meaning 349

British Columbia Investment Management Corp. v. Canada (A. G.), 2018 BCCA 47, aff'd 2019 SCC 63

deeming services provided by B.C. Crown agent in managing assets held in trust trenched on B.C. crown immunity

bcIMC was a BC Crown agent which was formed to manage and hold investments for the provincial pension plans. The governing Act created a statutory trust under which each pension plan only had an entitlement to units in the investment pools managed by bcIMC and did not have ownership in any investment pool assets.

CRA took the view (and ultimately assessed bcIMC for $40M in uncollected GST on the basis) that ETA s. 267.1(5)(a) deemed the statutory trust to be a person separate from bcIMC as agent for the provincial Crown, so that the investment services of bcIMC were supplied to that separate person. Willcock JA found that s. 267.1(5)(a) indeed had this effect, which was an “effect of separating the Crown from its assets” and that instead “bcIMC is immune from Canada’s taxation” under s. 125 of the Constitution Act, 1867.

However, he found that such immunity was taken away by the reciprocal taxation agreement between B.C. and Canada in which the Province committed itself and its agents to pay any tax imposed under the ETA. He stated that “agreements between the federal and provincial governments may be mere political agreements,” but found that the terms of the Agreement here evinced an intention to be legally bound, and stated that “enforcement of the [Agreement] is possible” pursuant to s. 19 of the Federal Courts Act (Canada) and s. 1(1)(a) of the Federal Courts Jurisdiction Act (B.C.).

Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Constitution Act, 1867 - Section 125 imposition of GST on investment assets held by a provincial Crown agent would have been prohibited by its governmental immunity but for the reciprocal taxation agreement 515
Tax Topics - Excise Tax Act - Section 267.1 - Subsection 267.1(5) - Paragraph 267.1(5)(a) services of trustees of managing assets held in trust would not be supply in absence of s. 267.1(5)(a) 170
Tax Topics - Income Tax Act - Section 104 - Subsection 104(1) arrangement under which the beneficiaries only had rights to units and no ownership of underlying assets was treated as a trust 170
Tax Topics - Other Legislation/Constitution - Federal - Federal Courts Act - Section 19 enforcement of a reciprocal taxation agreement was possible pursuant to the Federal Courts Act 246

Reference re Goods and Services Tax, [1992] 2 S.C.R. 445, [1992] GSTC 2

GST collection obligation not an imposition on provincial funds

The collection and remittance obligations imposed on a province by s. 122(b) could not be equated to an appropriation of money from the Provincial Consolidated Revenue Fund, without the consent of the provincial legislature, for federal purposes. Accordingly, the province was required to bear this administrative burden.

Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Constitution Act, 1867 - Section 125 imposing a GST collection obligation on the Province on supplies made by it did not violate s. 125 157

See Also

British Columbia Investment Management Corp. v. Canada (A. G.), 2016 BCSC 1803

BC Crown agent bound by agreement only to pay tax on fees chargeable against the investments held by it

The petitioner (bcIMC) was a BC Crown agent which was formed to manage and hold, under a provincial statutory trust, investments for the provincial pension plans. Weatherill J rejected a federal Crown argument that bcIMC was not immune under s. 125 of the Constitution Act from HST otherwise payable on the fees taken out of the funds under its management on the grounds that ETA s. 267.1(5) deemed the statutory trust impressed on bcIMC’s investments to be a separate (non-Crown) person who thus was not exempt from federal tax on such fees, stating that “Canada cannot, under the guise of the deemed trust provisions of the ETA or otherwise, defeat the Province’s immunity from taxation.” However, he found that such immunity was taken away by agreements between B.C. and Canada in which the Province committed itself and its agents to pay any tax imposed under the ETA. He stated:

Section 16 of [bcIMC’s incorporating legislation] states that bcIMC “…is not liable for taxation except as the government is liable for taxation”. That language, in my view, is the specific legislative authority required to bind bcIMC to the Agreements and should be interpreted accordingly.

Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Constitution Act, 1867 - Section 125 BC Crown agent immune from HST otherwise imposed on investments held by it in a statutory trust, but bound to such HST based on intergovernmental agreement 506

Administrative Policy

GST/HST Memorandum 18-2 “Provincial Governments” February 2020

Listed entitities

5. Listed entity means, for the purposes of this memorandum, a provincial or territorial government department/ministry, Crown corporation, board, commission or agency that is specifically named in a list of Crown agents either listed in Schedule A to an RTA or provided to the Canada Revenue Agency (CRA) by the province in circumstances in which the province is not a signatory to an RTA (as is the case for New Brunswick and Alberta).

Provincial governments must collect GST/HST on their supplies

10. Paragraph 122(b) of the Act binds Her Majesty in right of a province in respect of obligations as a supplier to collect and to remit tax in respect of taxable supplies it makes. As a result, all provincial/territorial governments and their Crown agents are generally subject to the provisions of the Act that apply to suppliers, including the obligation to register, charge and collect the GST/HST on taxable supplies, file GST/HST returns and remit net tax to the CRA.

11. Generally, each provincial/territorial government, including all of its departments/ministries and some of its agencies, boards and commissions, has registered for GST/HST purposes under a single Business Number (BN) with various filing branches/divisions. All the provincial/territorial government entities under the particular BN for a province/territory collectively form the provincial/territorial government registrant.

Most provinces have entered into an RTA

20. Although the GST/HST may be payable in respect of their purchases, provincial and territorial governments and their Crown agents are not bound as purchasers by the provisions of the Act pursuant to section 122.

21. All provinces and territories other than New Brunswick and Alberta have entered into RTAs in which they have, among other things, negotiated how the particular province or territory (and its listed entities) will receive relief from the GST/HST on their purchases of taxable property and services.

Two models: pay and rebate; or point of purchase exemption

22. As purchasers, there are 2 ways in which a provincial or territorial government and its listed entities may be eligible for relief from the GST/HST:

  • where a provincial or territorial government has agreed to a pay-and-rebate model, all government departments and Crown agents pay the GST/HST at the time of purchase and listed entities subsequently claim a government rebate of 100% of the GST/HST paid or payable
  • claiming point-of-purchase relief from payment of the GST/HST through the use of an exemption certificate or a certification clause in a contract

23. The governments of all the participating provinces, as well as Quebec, British Columbia and Nunavut, have agreed to use the pay and rebate model. Therefore, their government departments and all of their Crown agents will pay the GST/HST on their purchases of taxable property and services. Their listed entities are eligible to claim a government rebate of 100% of the GST/HST paid or payable.

24. The governments of the remaining provinces and territories claim point-of-purchase relief from payment of the GST/HST. Listed entities in Manitoba, Saskatchewan, Alberta, the Northwest Territories and Yukon do not pay the GST/HST on purchases of taxable property and services, provided that an authorized official of the listed entity provides sufficient evidence to the supplier that the supplies are being purchased by a listed entity on its own behalf.

Purchase exemption certificate

26. Suppliers must charge the GST/HST on their taxable supplies of property or services made to a government entity of a province that is entitled to point-of-purchase relief from the GST/HST (Manitoba, Saskatchewan, Alberta, the Northwest Territories and Yukon) unless the entity meets both of the following conditions:

  • it is a listed entity purchasing the taxable property or service on its own behalf
  • it provides sufficient documentary evidence to show that it is eligible for point-of-purchase relief from the GST/HST

27. Where a supplier has not charged the GST/HST on taxable supplies of property or services to a listed entity that is entitled to point-of-purchase relief, the supplier must maintain sufficient documentary evidence that the listed entity was the recipient of the supply and was eligible for that relief. For example, the supplier should retain a copy of an exemption certificate or contract containing a certification clause.

28. An exemption certificate or certification clause is a statement detailing that a purchase is being made by a listed entity of a province or territory that is entitled to point-of-purchase relief from the GST/HST. The exemption certificate or certification clause should be similar in form and content to the following:

This is to certify that the property and/or services ordered/purchased hereby are being purchased by

________________________________________________
(Name of Provincial/Territorial Government Department or Entity)

and are not subject to the GST/HST.

____________________________________
(Signature of Authorized Official)

Taxability of purchases by employees of listed entities (other than with government credit card)

31. Purchases of taxable property or services made by employees of a listed entity in the employee’s own name are subject to the GST/HST even if the employee makes the purchase in the course of employment. Examples of these types of purchases include hotel and meal expenses incurred by employees of a listed entity while on travel status. Listed entities in the provinces and territories that are eligible to claim point-of-purchase relief cannot issue exemption certificates certifying entitlement to relief from paying the GST/HST for purchases of taxable property and services made by an employee in the employee’s name.

32. The GST/HST is not payable on purchases of taxable property and services if the employee uses a credit card for which a listed entity is solely liable. In such cases, the credit card must clearly indicate that it is for use in acquiring supplies for a listed entity entitled to point-of-purchase relief from the GST/HST. Purchases made by employees with a credit card issued in the name of the employee, or for which the employee and the listed entity are jointly liable, are subject to the GST/HST even if the purchase is made in the course of employment.

31 May 2012 Quebec Information Bulletin 2012-4

To achieve greater harmonization of Québec's sales tax (QST) system with the federal goods and services tax (GST) and harmonized sales tax (HST) system, the governments of Canada and Québec entered into, in March 2012, a comprehensive integrated tax coordination agreement (Canada-Québec CITCA) with various commitments in this regard. This information bulletin specifies the changes that will be made to the QST system pursuant to the undertakings to harmonize it with the GST/HST system applicable in 2013. Essentially, these commitments are as follows:

  • the GST will be removed from the QST base as of January 1, 2013; to ensure that this removal has no impact on Québec's public finances, the 9.5% rate of the QST will, at the same time, be raised to 9.975%, i.e. the effective rate of the QST applicable until then;
  • financial services that are currently zero-rated under the QST system will become exempt as under the GST/HST system as of January 1, 2013; as a corollary, the portion of the compensation tax on financial institutions attributable to the impact on public finances to the fact that input tax refunds are granted to suppliers of financial services will be eliminated as of the same date;
  • the existing exemption mechanism from payment of taxes by governments and certain of their mandataries will be replaced by a tax payment and rebate mechanism as of April 1, 2013.

Related Provisions

Comprehensive Integrated Tax Coordination Agreement Between The Government of Canada and The Government of Ontario

Part I

Interpretation

  1. In this Agreement,

“Agreement” means this comprehensive integrated tax coordination agreement, entered into by Canada with the Province under Part III.1 of the Federal-Provincial Fiscal Arrangements Act, R.S.C. 1985, c. F-8, including all Annexes attached, and all instruments amending or restating it, or any successor agreement to it; …

“CVAT” means the federal component of tax payable under Part IX of the Excise Tax Act that applies in a province irrespective of whether the province is a participating province; …

“harmonized sales taxes” means the CVAT and the PVAT in respect of each participating province;

“harmonized sales tax rate”, at any time in respect of a participating province, means the aggregate of the tax rates, at that time, under the CVAT and the PVAT in respect of the participating province;

“Implementation Date” of the PVAT in respect of the Province means the date on which the PVAT in respect of the Province is implemented;

“non-participating province” means any province, other than a participating province;

“participating province”, at any time, means a province that has entered into a comprehensive integrated tax coordination agreement with Canada under Part III.1 of the Federal-Provincial Fiscal Arrangements Act, R.S.C. 1985, c. F-8 and that, at that time, is defined as such a province under section 123 of the Excise Tax Act;

“Provincial Sales Tax” of the Province means a retail sales tax that applies to a broad base of property or services, or a similar transaction tax that applies to a broad base of property or services, in respect of the Province;

“PVAT”, in respect of a participating province, means the provincial component of tax payable under Part IX of the Excise Tax Act that is imposed, in addition to the CVAT, in respect of the participating province; and

“PVAT Rate”, at any time in respect of a participating province, means the tax rate for, or in relation to, the participating province that is applicable, at that time, to determine and calculate the PVAT in respect of the participating province.

Part IX

Harmonized Tax Administration

29. The Minister of National Revenue will administer and enforce the harmonized sales taxes payable under Part IX of the Excise Tax Act, which includes the rebates under Annex “B” and the input tax credit recapture and transitional rules under Annex “C”. The Parties acknowledge that Canada will be solely responsible for all costs related to this administration and enforcement, including the collection referred to in clause 30.

30. Notwithstanding clause 29, the Parties acknowledge that, in accordance with section 214 of the Excise Tax Act, the collection of the harmonized sales taxes payable under Division III of Part IX of that Act is a responsibility of the Canada Border Services Agency.

31. The administration and enforcement contemplated by clause 29 and the collection contemplated by clause 30 will be at service and compliance levels mutually agreed upon between the Province and each of the Canada Revenue Agency and the Canada Border Services Agency, respectively. ...

Part XIV

Dispute Resolution

38. Best efforts will be exercised by federal and provincial officials to reach consensus in respect of issues arising in respect of matters governed by this Agreement.

39. Subject to clause 40, issues not resolved by federal and provincial officials will be referred to the Minister of Finance (Canada) and the Ministers of Finance of the relevant participating provinces.

40. If the issue relates to the administration of the harmonized sales taxes contemplated by clause 29, the issue will be referred to the Minister of National Revenue, the Minister of Revenue (Ontario) and, if applicable, to the appropriate Minister of relevant participating provinces, with notice of same to the Minister of Finance (Canada). If the issue relates to the collection of the harmonized sales taxes contemplated by clause 30, the issue will be referred to the Minister of Public Safety, the Minister of Revenue (Ontario) and, if applicable, to the appropriate Minister of relevant participating provinces, with notice of same to the Minister of Finance (Canada) and the Minister of National Revenue.

41. If an unresolved issue has been referred to the Ministers described in clauses 39 or 40, those Ministers may refer the issue to a third party for consideration and advice. ...

Part XVI
Government Purchases

51. Canada and the Province agree to pay the harmonized sales taxes in respect of supplies acquired by their respective governments or by agents and entities thereof.

52. Where inter-jurisdictional immunity from taxation applies, any harmonized sales taxes paid by Canada or the Province, as provided for in clause 51, will be subject to rebate on application to the Minister of National Revenue, except to the extent that any such taxes are payable under any agreement regarding the reciprocal payment of sales or commodity taxes as between Canada and the Province or are otherwise recoverable.

53. In the case of the provincial government or of agents and entities thereof, any rebates payable under clause 52 shall be made on a bi-weekly basis and, at the direction of the Province, shall be paid either to the Province or to the government entity of the Province which paid the tax and which is identified as the recipient of the rebate in the application therefor.

Part XIX

Miscellaneous

66. This Agreement, including all Annexes attached, constitutes the entire agreement between the Parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings between the Parties with respect to that subject matter.

Federal-Provincial Fiscal Arrangements Act, RSC 1985, c F-8

PART III.1 Sales Tax Harmonization Agreements

Definition of sales taxes

8.2 (1) In this Part, sales taxes means the taxes imposed under Part IX of the Excise Tax Act and taxes levied under Acts of the legislature of a province in respect of supplies of property or services.

Meanings in Part IX to apply

(2) In this Part, property, service and supply have the meanings assigned by subsection 123(1) of the Excise Tax Act. ...

Sales tax harmonization agreement

8.3 (1) The Minister, with the approval of the Governor in Council, may on behalf of the Government of Canada enter into an agreement or arrangement with the government of a province respecting sales taxes and, without restricting the generality of the foregoing, respecting

(a) the integration of sales taxes applicable in the province into taxes collected, administered and enforced under a single Act of Parliament;

(b) the collection of taxes applicable in the province, whether imposed under an Act of Parliament or levied under an Act of the legislature of the province, and the administration and enforcement of the Acts imposing the taxes;

(c) the provision to the Government of Canada by the government of the province, or to the government of the province by the Government of Canada, of information acquired in the administration and enforcement of Acts imposing taxes, Acts relating to the disclosure, displaying or advertisement of prices for property or services and Acts providing for rebates, refunds or reimbursements of sales taxes, paid or payable, or of amounts paid or payable as or on account of sales taxes, in respect of the supply, bringing into the province or importation of certain property or services;

(d) the accounting for taxes collected in accordance with the agreement;

(e) the implementation of the system of integration of the sales taxes contemplated under the agreement and the transition from the system of taxation administered before the agreement to the system of taxation contemplated under the agreement;

(f) payments, and the eligibility for payments, by the Government of Canada to the government of the province in respect of the revenues from, and the transitional costs incurred in converting to, the system of taxation contemplated under the agreement and to which the province is entitled under the agreement, the time when such payments will be made, and the remittance by the government of the province to the Government of Canada of any overpayments by the Government of Canada or the right of the Government of Canada to set off any overpayments against other amounts payable by the Government of Canada to the government of the province, whether under the agreement or any other agreement or arrangement or any Act of Parliament;

(g) the payment by the Government of Canada and its agents and subservient bodies, and by the government of the province and its agents and subservient bodies, of the sales taxes payable under the system of taxation contemplated under the agreement and the accounting for the sales taxes so paid;

(h) the compliance by the Government of Canada and its agents and subservient bodies, and by the government of the province and its agents and subservient bodies, with the Act of Parliament under which the system of taxation is administered and regulations made under that Act;

(i) the enactment, administration and enforcement of laws respecting the disclosure, display and advertisement of the prices for property and services in respect of the supply of which sales taxes are payable under the system of taxation contemplated under the agreement;

(j) the administration and enforcement of Acts of Parliament or the legislature of the province respecting the rebate, refund or reimbursement of sales taxes paid in respect of the supply, bringing into the province or importation of certain property or services; and

(k) other matters that relate to, and that are considered advisable for the purposes of implementing or administering, the system of taxation contemplated under the agreement.

Amending agreements

(2) The Minister, with the approval of the Governor in Council, may on behalf of the Government of Canada enter into an agreement with the government of a province amending or varying an agreement or arrangement with the province entered into under subsection (1) or this subsection or ratified and confirmed under section 8.7.

Reciprocal Taxation Agreements

Reciprocal taxation agreements

32 Notwithstanding any other Act, the Minister may enter into reciprocal taxation agreements with the government of any province, providing, without restricting the generality of the foregoing, for all or any of the following matters, namely

(a) for the payment by Her Majesty in right of Canada of any provincial tax or fee imposed or levied under a law of that province that would be payable by Her Majesty in right of Canada if that law were applicable thereto;

(b) for the payment by Her Majesty in right of that province of any tax or fee imposed or levied under the Excise Tax Act that is payable by Her Majesty in right of that province and the waiver of the right to a payment in respect of that tax or fee provided in section 68.14 or 68.19 of that Act;

(c) for the payment by Her Majesty in right of Canada to that province or the assignees of that province of amounts determined under the agreement in respect of amounts paid by Her Majesty in right of that province and amounts paid by persons identified in the agreement as or on account of any tax imposed under the Excise Tax Act;

(d) for the payment by Her Majesty in right of Canada of interest on any amounts equal to any provincial tax or fee imposed or levied under a law of the province that would be collected by Her Majesty in right of Canada if that law were applicable to Her Majesty in right of Canada where those amounts have not been remitted or paid to the province at the rate and in the manner and at the time provided for in the applicable law of the province; and

(e) for the collection and the remittance by Her Majesty in right of Canada of any provincial tax or fee imposed or levied under a law of the province that would be collected pursuant to that law by Her Majesty in right of Canada if that law were applicable to Her Majesty in right of Canada.

Related Provisions

RECIPROCAL TAXATION AGREEMENT

THIS AGREEMENT made as of the 30th day of June, 2000,
BETWEEN:
THE GOVERNMENT OF CANADA,(in this agreement referred to as ("Canada"), represented by the Minister of Finance), (the "Federal Minister")
- and -
THE GOVERNMENT OF ONTARIO, (in this agreement referred to as "the Province") represented by the Minister of Finance (the "Provincial Minister")
WHEREAS The parties wish to enter into an agreement under which each will bear or pay the taxes and fees imposed by the other party as specified in this agreement;
AND WHEREAS The Federal Minister is authorised by section 32 of the Federal-Provincial Fiscal Arrangements Act, R.S.C. 1985, c. F-8 to enter into this agreement and the Provincial Minister has been authorised to enter into this agreement pursuant to Order in Council _______________________.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT Canada and the Province agree as follows:

INTERPRETATION
PART I

Definitions

1. The definitions in this clause apply in this agreement.

(a) "Federal Act" means the Excise Tax Act, R.S.C. 1985, c. E-15.
(b) "federal tax" means any tax imposed or levied under the Federal Act, other than the value-added tax.
(c) "FPFAA" means the Federal-Provincial Fiscal Arrangements Act, R.S.C. 1985, c. F-8.
(d) "provincial sales tax" means a tax imposed or levied under The Retail Sales Tax Act, R.S.O. 1990, C. R.31:
(e) "provincial tax or fee" means a provincial tax or fee as defined in subsection 31(1) of the FPFAA, other than the provincial sales tax, and includes any such tax or fee which is imposed or levied under any of the following statutes:

(i) the Fuel Tax Act, R.S.O. 1990, c. F.35,
(ii) the Gasoline Tax Act, R.S.O. 1990, c. G.5,
(iii) the Highway Traffic Act, R.S.O. 1990, c. H.8,
(iv) the Motorized Snow Vehicles Act, R.S.O. 1990, c. M.44,
(v) the Off-Road Vehicles Act, R.S.O. 1990, c. 0.4,
(vi) the Public Vehicles Act, R.S.O. 1990, c. P.54,
(vii) the Tobacco Tax Act, R.S.O. 1990, c. T.10, and
(viii) the Truck Transportation Act, R.S.O. 1990, c. T.22

(f) "value-added tax" means any tax imposed or levied under Part IX of the Federal Act.

References

2. In this agreement, a reference to an Act of the federal legislature or of the legislature of the Province is a reference to that Act, and to the regulations made under that Act, as amended.

Application

3. This agreement is binding on Canada, the Province and their respective agents.

Consolidated Immunity

4. It is understood that neither Canada nor the Province is deemed, by reason of having entered into this agreement, to have surrendered or abandoned any of its powers, rights, privileges or authorities under the Constitution of Canada, or to have impaired any such powers, rights, privileges or authorities.

PAYMENT OF TAX
PART II

Agreement by Canada

5. Canada agrees:

(a) to pay the provincial taxes or fees in accordance with the provincial laws, as if these laws were applicable to it;
(b) that all federal entities listed in Schedule I of the FPFAA shall pay the provincial sales tax and the provincial taxes or fees in accordance with the provincial laws, as if these laws were applicable to them;
(c) to collect and remit the provincial sales tax and the provincial taxes or fees in respect of the sale of property or services by Canada in accordance with the provincial laws, as if these laws were applicable to it;
(d) to pay any other amounts on account of the provincial sales tax or the provincial taxes or fees collectible and remittable in accordance with this agreement that Canada failed to collect or remit to the Province; and
(e) to pay interest, but not penalties, in respect of any provincial sales tax or any provincial taxes or fees collectible by Canada in accordance with this agreement.

Agreement by the Province

6. The Province agrees:

(a) to pay, subject to paragraph (c), any federal tax in accordance with the Federal Act, as if that Act were applicable to it;
(b) that provincial Crown corporations or agencies, other than the entities listed in Schedule A, shall pay the value-added tax in accordance with the Federal Act, as if that Act were applicable to them;
(c) to pay any tax imposed or levied under Part Ill or IV of the Federal Act on goods imported by the Province, to the same extent as Canada pays that tax on any importation of goods;
(d) to collect and remit the federal tax in respect of the sale of property or services by the Province in accordance with the Federal Act;
(e) to pay any other amounts on account of any tax imposed or levied under the Federal Act collectible and remittable under that Act in accordance with this agreement, that it failed to collect or remit to Canada;
(f) to pay interest, but not penalties, in respect of any tax imposed or levied under the Federal Act collectible by the Province in accordance with this agreement; and
(g) not to apply for, nor claim the benefit of, any refund of tax paid under Part III or IV of the Federal Act, or any payment in respect of such tax for which provision is made in section 68.19 of the Federal Act, and that no refund or payment in respect of tax paid under these Parts can be granted under that section to an importer, transferee, manufacturer, producer, wholesaler, jobber or other dealer. ...

REBATES
PART III

Social Housing Rebate

13. The provincial entities listed in Schedule B:

(a) shall pay the value-added tax in accordance with the Federal Act, as if that Act were applicable to them;
(b) shall apply to the minister of National Revenue to be designated as a municipality for the purposes of section 259 of the Federal Act, in respect of their activities relating to the delivery of social housing; ·
(c) may claim an input tax credit in accordance with the Federal Act in respect of property or services acquired or imported by the entity for consumption, use or supply in the course of its commercial activity; and
(d) may claim, under section 261 of the Federal Act, rebates of the value-added tax paid by the entity on expenditures relating to administration and overhead.

Municipal Services Rebate

14. The provincial entities listed in Schedule C:

(a) shall pay the federal tax and the value-added tax in accordance with the Federal Act, as if that Act were applicable to them;
(b) shall apply to the Minister of National Revenue to be designated as a municipality for the purposes of subsection 259( 4) of the Federal Act and section 22 of Part VI of Schedule V to the Federal Act in respect of their activities that are included in these provisions;
(c) may claim an input tax credit in accordance with the Federal Act in respect of property or a service acquired or imported by, them for consumption, use or supply in the course of their commercial activities; and
(d) may claim, under section 261 of the Federal Act, rebates of the value-added tax paid by them on expenditures relating to administration and overhead. ...

DISPUTE RESOLUTION
PART IV

Settlement of Disputes

16. (1) Subject to clauses 17 and 18, if the parties fail to agree on the interpretation or application of the agreement, a party can refer the matter in dispute to a Board established in accordance with sub-clause (2).
(2) A Board consists of three members. Canada and the Province shall each nominate a member. The third member shall be nominated by the two members already selected. If the two selected members fail to agree as to the third member, the parties shall request the Chief Justice of the Federal Court of Canada to select the third member. In the event of the absence or inability of the Chief Justice or a vacancy in that office, the request shall be made to the Acting Chief Justice of the Federal Court of Canada.
(3) The parties agree to facilitate the constitution and functioning of the Board and to supply promptly any information required by the Board.
(4) Canada agrees:

(a) to inform the Province of any dispute arising under an agreement similar to this agreement with any province or territory at least thirty days before the selection of a Board under any provision of the agreement with the other province or territory similar to sub-clause (2);
(b) that any province or territory that enters into an agreement similar to this agreement is an interested party, for all purposes, in any proceeding before the Board and has the right to intervene and to make representations in the same manner as the parties; and
(c) to include a provision similar to this provision in any agreement similar to this agreement with any other province or territory.

(5) The Board shall review any matter in dispute. The report of the majority of the Board, including any findings and recommendations, shall be submitted as soon as possible to the parties to this agreement, to the other interested parties and to the Federal Minister, who shall within a reasonable time thereafter forward the report to all other provinces and territories who have entered into similar agreements. Upon submission of its report, the Board will be dissolved.
(6) Within a reasonable time after receiving the report, the parties to this agreement and all other interested parties shall approve or reject the recommendations of the Board and inform all other interested parties of their decision. When Canada and the Province agree with the recommendations, the recommendations become applicable at the time specified therein or at any time and manner agreed to by them.
(7) The Board determines its own rules of procedure.
(8) Canada shall pay, in the first instance, all reasonable expenses incurred by the Board, including the members' remuneration, witness fees, travel expenses and any other administrative costs. In its report, the Board shall apportion these expenses, in its sole discretion, between the parties to the agreement and amongst any other parties which may have made any representations to the Board.

Application of Provincial Procedures

17. (1) The procedures established for the purposes of the provincial sales tax. or the provincial tax or fee, as the case may be, apply in respect of any federal entity listed in Schedule I to the FPFAA, where a difference arises as to:

(a) whether a provincial sales tax or provincial tax or fee is payable;
(b) whether any tax or fee imposed or levied by the Province is a provincial tax or fee; or
(c) the amount payable in respect of any tax.

(2) The Province will not issue any execution based upon any determination, declaration or judgement made or issued against any federal entity listed in Schedule I to the FPFAA, arising from any judicial proceeding taken or commenced in accordance with sub-clause (1).

Application of Federal Procedures

18. (1) The procedures established under the Federal Act apply where a difference arises as to:

(a) whether a tax is payable by the Province, an agent of the Province, a Provincial Crown corporation or other provincial entity, or any importers, transferees, manufacturers," producers, wholesalers, registrants, jobbers or other dealers; or
(b) What rate or amount of tax is payable under the Federal Act.

(2) Canada will not issue any execution based upon any determination, declaration or judgement made or issued against the Province, arising from any judicial proceeding taken or commenced in accordance with sub-clause (1).

Paragraph 122(b)

Administrative Policy

GST/HST Memorandum 18-2 “Provincial Governments” February 2020

Requirement for provincial governments making taxable supplies to register, perhaps with one BN and multiple branches

10. Paragraph 122(b) of the Act binds Her Majesty in right of a province in respect of obligations as a supplier to collect and to remit tax in respect of taxable supplies it makes. As a result, all provincial/territorial governments and their Crown agents are generally subject to the provisions of the Act that apply to suppliers, including the obligation to register, charge and collect the GST/HST on taxable supplies, file GST/HST returns and remit net tax to the CRA.

11. Generally, each provincial/territorial government, including all of its departments/ministries and some of its agencies, boards and commissions, has registered for GST/HST purposes under a single Business Number (BN) with various filing branches/divisions. …

12. Transactions between entities that are branches/divisions of the same provincial/territorial government registrant are not treated as supplies for purposes of the GST/HST. …

13. Crown corporations, and certain boards, commissions and agencies involved predominantly in commercial activities that are not registered for GST/HST under a BN of a provincial or territorial government are required to register separately for GST/HST purposes and are generally subject to all the provisions in the Act that apply to registrants.

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