(416) 864 - 6200

Tax & Trade Blog

  • Home
    Home This is where you can find all the blog posts throughout the site.
  • Categories
    Categories Displays a list of categories from this blog.
  • Tags
    Tags Displays a list of tags that have been used in the blog.
  • Bloggers
    Bloggers Search for your favorite blogger from this site.
  • Archives
    Archives Contains a list of blog posts that were created previously.


Posted by on in Tax Law
  • Font size: Larger Smaller
  • Hits: 3313
  • Subscribe to this entry
  • Print

During a tax appeal it is quite common for a tax appellant and the CRA to disclose information and to formally agree on certain facts. For example, at the outset of most tax appeal trials the parties often prepare a document commonly referred to as a “Statement of Agreed Facts” or “Partial Statement of Agreed Facts” that outlines the facts that the parties agree on. 

The Tax Court of Canada (“TCC”) decision in Athabasca University v. The Queen, 2016 TCC 252 (“Athabasca”) is a perfect example of why it is imperative that no concessions or agreement of facts be made without a careful analysis of the potential implications that this could have on the ultimate issues in dispute in the tax appeal.

The tax appellant in Athabasca, Athabasca University (“Athabasca”), specializes in online and distance learning. In the course of its commercial activities, Athabasca purchased printed textbooks from publishers and then mailed them to enrolled students.

Athabasca applied for a rebate for the textbooks under subsection 259.1(2) of the Excise Tax Act (“ETA”) on the basis that it met all conditions required to claim a printed books rebate, namely that the textbooks were not acquired “for the purpose of supply by way of sale”.

The CRA denied Athabasca the printed books rebate because it took the position that Athabasca did not qualify for this rebate because it had acquired the books “for the purpose of supply by way of sale” to satisfy its obligations to students.

Athabasca appealed the CRA’s decision to the TCC.

At the outset of the tax appeal trial, the CRA conceded that Athabasca did not make a separate supply of textbooks, but instead made a "single supply of instructional services" to its students.  Given that this case ultimately turned on whether or not Athabasca was making a single supply or two separate supplies, this seemingly small concession basically handed the tax appeal to Athabasca on a silver platter.

As the TCC correctly alluded to in its decision allowing Athabasca’s tax appeal, the fact that the CRA conceded that there was only a single supply of instructional services meant that it was impossible for the textbooks to have been acquired “for the purpose of supply by way of sale”.

The TCC further noted that even if the CRA was correct that there was a “sale” of the printed textbooks, the CRA’s admission that there was a single supply was fatal to its case because there had to be a “supply by way of sale” – a sale alone was not sufficient. The TCC also determined that the words “for the purpose…” in section 259.1(2) of the ETA meant for the “ultimate purpose”, not the “immediate purpose”.

The Athabasca case should serve as a cautionary tale of the fact that seemingly small concessions can make or break the ultimate issues in dispute in a tax appeal.

This case also illustrates the importance of contacting an experienced tax professional early on in a tax dispute to prevent any unnecessary disclosures or concessions that could seriously hamper the chances of successfully appealing a CRA assessment.

Do you need assistance with a tax appeal? If so, please contact us here.

Last modified on


  • No comments made yet. Be the first to submit a comment

Leave your comment

Guest Monday, 15 April 2024

Toronto Office

10 Lower Spadina Avenue, Suite 200, Toronto, Ontario, M5V 2Z2 Canada
Phone: (416) 864-6200| Fax: (416) 864-6201

Client Login

To access the Millar Kreklewetz LLP secure client file transfer system, please log in.