The Mac's Decision: Making Space For A Third-Party ABM Is A Taxable Supply

In a decision rendered on November 13, 2012¹, the Tax Court of Canada (the "Court"), in the person of Justice Robert Hogan, clarified the definition of "financial service" in the Excise Tax Act ("ETA") in a situation where an intermediary provides on-premises space allowing a third party to render financial services to its clients. In addition, the Court also analyzed the meaning of the expression "relate to" as used in subsection 185 (1) of the ETA.

Context and applicable law

Supplies of financial services are generally exempt for the purposes of the Goods and Services Tax ("GST"). Such exempt financial services include, in particular, "the exchange, payment, issue, receipt or transfer of money, whether effected by the exchange of currency, by crediting or debiting accounts or otherwise"² and "the operation or maintenance of a savings, chequing, deposit, loan, charge or other account"³. Agreeing to provide, or the arranging for, such services is also defined as a