CUSTOMS AND EXCISE |
Excise Tax Act |
Commission scolaire Des Chênes v. Canada
A-139-00
2001 FCA 264, Noël J.A.
17/10/01
16 pp.
Appeal from Tax Court of Canada decision ([2000] G.S.T.C. 36) confirming notice of assessment issued by Minister of National Revenue for period May 1, 1992, to May 31, 1996--In notice of assessment, Minister denying input tax credits (ITCs) claimed by appellant for goods and services tax (GST) paid in relation to student transportation services--Appellant, along with number of other school boards, providing school bus transportation under contracts negotiated with independent carriers--Funds used to pay consideration set out in transportation contracts coming from subsidy paid to appellant by Minister of Transport of Quebec and students not paying anything for regular service--In GST return for period ending May 31, 1996, appellant claiming ITCs of $505,273.42 representing difference between GST paid to carriers since July 1, 1992, and amounts refunded to it as public body under Excise Tax Act, s. 259--Minister refusing to pay additional ITCs claimed by appellant on ground appellant provides school bus service and own students are recipients of service under s. 123--Whether Tax Court judge could have concluded subsidy not consideration within meaning of Act--Under Act, to constitute consideration, payment to be made pursuant to legal obligation (contractual or otherwise) and closely enough linked to supply to be regarded as having been made "for" supply, explaining direct link requirement--No doubt as to duty of Minister of Transport to pay subsidy--On point of purpose of subsidy, Minister of Transport having authority to grant subsidies for transportation purposes only--Purpose of subsidy and link with supply in question unequivocal--Service required to be provided, failing which subsidy may be cancelled--Tax Court Judge apparently placing undue weight on fact subsidy constitutes type of financial assistance paid in public interest--Regardless of interest in question, payment to be regarded as consideration if directly linked to supply of good or service by person who received payment--Incorrect to say Minister of Transport not receiving anything in return for subsidy--Minister of Transport obtaining provision of free transportation service to students from appellant--Sufficient to make subsidy consideration within meaning of Act--Appeal allowed--Excise Tax Act, R.S.C., 1985, c. E-15, ss. 123 (as am. by S.C. 1990, c. 45, s. 12; 1993, c. 27, ss. 10, 204), 259 (as am. idem. S.C. 1993, c. 27, s. 115; 1997, c. 10, ss. 69, 227; 2000, c. 30. s. 76).