Before the commencement of its taxation year on November 1, the taxpayer, which operated ski and tennis facilities in Collingwood, Ontario, sold season passes that could be used after November 7.
The taxpayer was entitled to the full reserve under s. 20(1)(m), on the basis that the sums were received under a contract for the provision of future services, namely, the use of the tennis and ski facilities.
Although the contract stipulated that the taxpayer did not provide refunds or credits for any reason. Baubier T.C.J. noted (at p. 1889) that:
"Ultimately, in law, if those services could not be provided in the future, the contract would be frustrated and the fee would be refundable by the Appellant."