The City of Quebec City paid a subsidy to a school board of $880,000 to enable the school board to renovate a school and expand its gymnasium. In return, the school board was required to make the new facility available to the City for free for 30 years. In finding that the school board was making a taxable supply, Lamarre Proulx J stated (at paras. 55-6):
[W]hat is involved is not a definition of the term "consideration" but a clarification in the case of a non-contractual situation. In such a situation, this term must be given its normal legal meaning. … If we refer to the definition of that term in this same reference work, we read:
Consideration provided by the person who receives a benefit in the synallagmatic contract; reciprocal benefit (perceived as equal) charged to a party to a contract, for example, wages in consideration for work, or the price in consideration for the article sold.
In the two agreements at issue, the benefit provided by the appellant was to construct and to provide the premises. What should the benefit provided by the city for the supply of the real estate have been? … We see from reading the agreements.. that the common intention of the parties is that, if the premises are destroyed, disposed of or expropriated, the full amount of the grant, that is, $880,660, shall be reimbursed, prorated according to the number of years remaining. I am therefore obliged to find that this amount is the consideration for the supply by way of lease.. .