The City of Calgary unsuccessfully submitted that its activities of acquiring public transit assets and making them available for use in its transit system (which it labelled the "transit facilities services") constituted a separate taxable supply made to the Province of Alberta (which provided funding therefor) rather than being part of its making of exempt municipal transit services to the public. Although the transit facilities services might have been a separate supply made to the Province if the Province had a statutory obligation to provide municipal transit services which was being relieved by the provision by the City of these services, or if the funding agreements between the City and Province required the City to provide these services rather than merely to properly account for the funds received, neither proposition applied. Accordingly, the Province was not the recipient of the transit facilities services, viewed as if they were a supply separate from the municipal transit services made to the Calgary public.
After stating (at para. 62) that "Nothing in the ETA requires a supply to have only one recipient," Rothstein J dealt with the argument (at para. 63) "that because the Province contributed grant funding to the City, the Province was a recipient of the supply of municipal transit services." Rothstein J. noted (at para. 65) that this would not assist the City as the municipal transit services (the exemption for which in Schedule V, Part VI, s. 24 did not require that the public be the exclusive recipient of the supply) would continue to be exempt under this view.