The appellant ("Telus") operated a wireless carrier business which entailed providing roaming airtime ("RAT") services to customers, with Canadian billing addresses, who while in the U.S. made long-distance call to Canada. These calls essentially involved two steps, which were separately identified in the Telus billings:
- The customer's phone connected with a local cellular site, and then to a mobile telephone switching office ("MTSO").
- The MTSO connected the call to the Canadian recipient.
C Miller J found that Telus was required to charge GST on the fees it collected for both steps (rather than only the second step). As both steps constituted a single supply, that supply was deemed by s. 142.1(2)(b)(ii) to be made in Canada as that telecommunication service was received in Canada. After discussing Gestion Alger, BC Ferry and Jema, and after noting (at para. 27) that although "the RAT can be used independently of long distance charges, and therefore has a commercial efficacy as a standalone supply…that is only in the context of locally made calls" in the U.S. rather than calls from the U.S. to Canada, he stated (at paras. 35-36):
[The] integration approach, I believe, remains the essence of the single versus multiple supply. …Viewing the telecommunication service offered by Telus as a service of communication for customers to talk to another person, how that service is delivered is more akin to the delivery of pizza than provision of a separate stateroom service or vaccination service. The customer is simply paying to be able to make a call from his cell phone to Canada. The RAT and long distance service are fully and seamlessly integrated into making that happen.