An affinity program agreement with Aeroplan allowed TD to add Aeroplan Miles rewards to its credit cards. Graham J found that Aeroplan was making a single supply under the agreement of the Aeroplan Miles rather than, as contended by the Crown, marketing services.
In then finding that the Aeroplan Miles purchased by TD were not gift certificates, but were coupons, so that their purchase was subject to HST, Graham J stated (at paras. 238-239):
[F]or a device to be a gift certificate, it must have the following key characteristics:
(a) The device must have a stated monetary value that either appears on the device’s face or is retrievable electronically.
(b) It must be possible to transfer the device to a third party without additional payment to the issuer.
(c) The bearer must be entitled to apply some or all of the balance of the stored monetary value to the purchase price of goods or services purchased from either the issuer of the device or any other person who can lawfully accept the device as payment.
(d) The device may have some conditions, but any such conditions must not detract from the essential attribute of a gift certificate that it must have attributes similar to those of money.
An Aeroplan Mile had none of these characteristics. It did not have a stated monetary value and thus that value could not be applied towards a purchase. It was not transferrable without paying a fee to Aeroplan. Finally, the need to accumulate more Aeroplan Miles in order to use a single Aeroplan Mile was a significant condition on the device’s use.