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 labeled 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. Rothstein J. stated (at paras. 42-43):
Applying the O.A. Brown test, the question in this appeal is whether, in substance and reality, the alleged separate "transit facilities services" supply is an integral part, integrant or component of the overall supply of "public transit services". According to the jurisprudence, if one supply is work of a preparatory nature to another supply (an "input" to that supply), then the input is a part or component of the single overall supply. ...[T]he true nature of the City's "transit facilities services", a determination to be made with common sense, was work of a preparatory nature to the supply of a municipal transit service to the public....[T]he allegedly separate "transit facilities services" [were] in fact a component of the overall supply of "public transit services" to the Calgary public.
Although the transit facilities services might have been a separate supply made to the Province, rather than being merely of a preparatory nature, 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.