Words and Phrases - "substantially complete"
Maskell v. The Queen, 2021 TCC 18 (Informal Procedure)
The taxpayer bought an old house and made substantial renovations to it. The Minister denied his GST/HST New Housing Rebate application on the basis that it had not been submitted within the two year time period, after the construction or substantial renovation of a complex is substantially completed, provided by s. 256(3)(a)(iii). The Minister considered that substantial renovation of the particular building was “substantially completed” no later than October 16, 2013, but the taxpayer claimed a December 15, 2015 substantial completion date.
Russell J dismissed the appeal. Virtually all of the invoice dates shown in the Construction Summary Worksheet were dated 2012 or 2013 and there were no witnesses to corroborate the taxpayer’s testimony as to storage of materials or as to when work actually was done (para 7). The Respondent entered photos into evidence showing two Google “street views”, first from August 2012 showing a dilapidated home with construction materials, and a second from July 2014 showing a spruced-up building and a pleasure craft parked in front of a new looking garage. (para 9) A third photo from June 2013 showed a bedroom suite nearly completed (para 10). On the basis of the construction invoices and photos and on the basis of giving the taxpayer the benefit of the doubt by treating “substantially all … as indicating no less than 90%” (para 11), Russell found that the rebate application was submitted more than two years after substantial completion of the renovation project, thus rendering per s. 256(3)(a)(iii) ETA the rebate as not available.
John Tobin, "Infrastructure and P3 Projects", 2017 Conference Report (Canadian Tax Foundation), 10:1-31
Meaning of substantially complete in the construction industry (p. 10:6)
[T]he term “substantially complete" is therefore an undefined term that should take its meaning from its normal commercial use in the construction industry. The IO [Infrastructure Ontario] template documents essentially define substantial completion as the point when the facility has been completed in accordance with the project agreement and all requirements other than minor deficiencies have been satisfied. As used in the construction industry, it does not mean the time when a building is 90 percent complete, but rather the time when it is fully complete and capable of lawful occupancy, subject to minor deficiencies.
Handling of HST on future due dates if HST has already been paid under s. 168(3)(c) (p. 10:7)
[I]f the substantial completion rule has applied and tax has been remitted by Projectco without having been paid by the proponent, the ETA does not address how to deal with future tax that is collected from the proponent when actual payments are due and paid. This is effectively a prepayment of the HST so that, when a final invoice is rendered, a notation should be made on the invoice indicating that HST has previously been paid under paragraph 168(3)(c)…