CUSTOMS AND EXCISE
Excise Tax Act
Appeal from Tax Court of Canada decision contract under which Ontario Health Insurance Plan (OHIP) fees collected unenforceable in GST collection proceedings—As OHIP only covering audiological services if performed under supervision of medical doctors, respondent audiology clinic entering into agreement with doctors operating family practice across hallway—Agreement stating intended to comply with basic criteria set by OHIP with respect to payment of fees for audiological services—Tax Court finding agreement not reflecting true legal relationship between parties, not legally binding, no taxable supply of building, equipment rentals, management services—Erred in law in basing decision on after-the-fact evidence of parties’ intention to recharacterize clear, complete agreement upon which acted to obtain substantial monetary benefits from OHIP—Person creating, taking advantage of, contractual fiction intentionally designed to misrepresent legal relationship, cannot later invoke true economic reality to avoid tax disadvantages flowing therefrom—Appeal allowed.
Canada v. 1524994 Ontario Ltd. (A-115-06, 2007 FCA 74, Décary J.A., judgment dated 19/2/07, 9 pp.)