The CIBC issued Visa credit cards and utilized a credit card payment system operated and managed by Visa Canada. Visa Canada essentially acted as a largely automated go-between between the “issuer,” who provided the funds for a purchase at a merchant by a cardholder, and the “acquirer,” who used such funds to pay the merchant. Visa Canada added $18M in GST or HST to its charges for its services to CIBC in the years in question, and CRA denied CIBC’s s. 261 rebate claim therefor. Before finding that the supply by Visa Canada was a prescribed supply under para. (t) of “financial service,” Rossiter CJ found that Visa Canada was supplying a service described in para. (i), and that s. (q.1) did not apply, stating (at paras. 105-106):
[A]sset management services are a fairly active process where the underlying portfolio of financial assets/liabilities, through the efforts of the asset manager, are created, optimized or otherwise changed in some way.
In contrast, the liabilities incurred by CIBC are not created by Visa as Visa is not responsible for the issuing of the credit card. These liabilities are also not altered in anyway by the services provided by Visa, with Visa merely facilitating the transfer of funds between CIBC and the intended recipients of the funds for which the liabilities were incurred for. Section (q.1) does not appear to be applicable.