# EXM-N03 — Grants and subsidies. General rule

**Flag: Current** — Verified against the live source. Safe to cite.

**Grants and subsidies.** General rule: a transfer payment is not consideration for a supply and is not subject to GST/HST. The test is **direct link** — where a direct link to a supply exists, the payment is consideration. CRA retired the old "public purpose" test; do not use that phrase

## Sources

- Memorandum 18-4 (primary): https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/18-4/determining-whether-transfer-payment-consideration-supply.html

Jurisdiction: FED · Verified 2026-08-27 · Review: legislative