Case information

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Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Taxation – Goods and services tax – Whether the Applicant was entitled to an input tax credit for GST paid in relation to the construction of a municipal transit system - Whether the Federal Court of Appeal erred in concluding that the Applicant could not claim an input tax credit because the construction was a statutory obligation and an exempt supply - In determining if a grant or subsidy is consideration for a supply, and thus potentially subject to GST, must one always consider, interpret and apply the statutory definitions of “supply”, “service”, “consideration”, “recipient” and “business” and the existing GST jurisprudence, or are those considerations unnecessary where the person receiving the grant does not have an obligation under the grant funding agreement to provide a good or service to the grantor - Whether the Court has adopted an unduly restrictive interpretation of the statutory definition of “supply” in establishing the principle that a person providing a good or service to another must have an obligation to do so in order for a supply to occur - Excise Tax Act, R.S.C. 1985, c. E-15 (the “Act”) - City Transportation Act, R.S.A. 2000, c. C-14 (the “CTA”).

The Applicant constructed a municipal transit system for the use of the residents of Calgary pursuant to the CTA. The Province of Alberta (the “Province”) entered into funding agreements (the “Agreements”) with the Applicant. The Applicant paid GST on purchases made for the construction of the transit system, and later claimed input tax credits in respect thereof. Under the terms of the Act, the provision of a municipal transit service is an exempt supply, which does not entitle the supplier to input tax credits in respect of purchases made in providing the exempt supply. The Applicant took the position that the construction of the transit system was a separate supply to the Province pursuant to contractual obligations under the Agreements, for which the Province paid consideration. The Minister of National Revenue rejected the Applicant’s position in the assessment. The Applicant appealed that decision.