Services de sécurité ADT Canada inc. v. Agence du revenu du Québec, 2017 QCCA 1507
The Appellant provided security services, by remotely monitoring the business premises or homes of its customers by collecting information through a sensor and control box on the premises and communicating the data over a telephone line or the internet to the Appellant’s monitoring station. S. 80.2 of the Quebec Sales Tax Act (“RSTA”) provided that it was not subject to tax in respect of its purchases of telecommunication services purchased by it for use “directly and solely for the purpose of making a taxable supply of another telecommunication service by [it].” The definition of “telecommunication service” in s. 1(1) of the RSTA was essentially identical to that in ETA s. 123(1).
In finding that the Appellant was supplying a security service rather than a telecommunication service to its customers, so that relief under s. 80.2 was not available, the Court stated (at paras 4, 8):
The judge agreed with the parties that the Appellant provides a single service (albeit comprised of several constituent elements)…according to … Calgary … .
… [T]he judge correctly characterized this service as that of security, albeit using and indeed consuming in large measure, telecommunications to furnish such service. … The gist of the judgment is that the single service provided by Appellant is not telecommunications but rather security comprised of an ensemble of elements of which telecommunications is one part.