BC Hydro, which had entered into an electricity purchase agreement (EPA) with an independent power producer for the supply of electricity at a particular project in BC, agreed with that supplier that the EPA would be amended to provide, inter alia, that in consideration for the payment by BC Hydro of the sum of $8.5 million by the date 30 days after the project became operational, BC Hydro would have the option to extend the term of the EPA by a further 16 years.
BC Hydro submitted that s. 182 applied to the $8.5 million sum as being an amount paid by it as a consequence of the modification of the EPA. In rejecting this submission, Bocock J found that the payment was consideration for the optional term extension and therefore was consideration for a "taxable supply per se" (para. 73). The documents framed the optional term extension “as a separate pursuit … separate and distinct from the electricity supply contract” (para. 93).
Since the payment was made for such taxable supply, it was not made as a consequence of any modification of the electricity supply agreement (the EPA) as required by s. 182. However, Bocock J. further indicated obiter that he would have considered the payment to have been paid otherwise than as consideration for "the supply" under the EPA, i.e., it was not consideration for the supply thereunder of electricity.