To decide the income tax or HST implications of a contract, tax courts must refer to provincial law. So, it is helpful to follow and keep in mind important statements of principle made by provincial courts.
On this topic, see for example, s. 8.1 of the Federal Interpretation Act:
“Duality of legal traditions and application of provincial law
“8.1 Both the common law and the civil law are equally authoritative and recognized sources of the law of property and civil rights in Canada and, unless otherwise provided by law, if in interpreting an enactment it is necessary to refer to a province’s rules, principles or concepts forming part of the law of property and civil rights, reference must be made to the rules, principles and concepts in force in the province at the time the enactment is being applied.”
And see, for example, Dale v. Canada, [1997] 3 FCR 235, 1997 CanLII 4969 (FCA):
“In determining whether a legal transaction will be recognized for tax purposes one must turn to the law as found in the jurisdiction in which the transaction is consummated. Often that determination will be made without the aid of guiding precedents which are on point and, hence, the effectiveness of a transaction may depend solely on the proper application of general common law and equitable principles. In some instances it will be necessary for the Tax Court to interpret the statutory law of a province. As for the Minister, he must accept the legal results which flow from the proper application of common law and equitable principles, as well as the interpretation of legislative provisions. This leads me to the question of whether the Minister is bound by an order issued by a superior court, which order has its origins in the interpretation and application of the provisions of a provincial statute.
“… Counsel for the taxpayers now relies on the decision of the Supreme Court of Canada in Wilson v. R., 1983 CanLII 35 (SCC), [1983] 2 S.C.R. 594, to support the argument that the Minister and Tax Court are bound by the terms of the Nova Scotia order. That decision establishes the general rule that an order of a superior court cannot be attacked collaterally unless it is lawfully set aside. …”
In this recent Ontario Court of Appeal case, the Court said that headings in a contract have an interpretive role:
“[11] The clause heading that reads “CUSTOMER IS LIABLE FOR ALL DAMAGE CAUSED BY CUSTOMER AND/OR THEIR GUEST(S)” is at once a title and a provision, and has been emphasized within the contract. The headings contained in a contract are part of the language chosen by the parties and can properly be considered in interpreting the provisions that follow, provided the wording of the contract is not inconsistent with such an interpretation: Cathcart Inspection Services Ltd. v. Purolator Courier Ltd. (1981), 1981 CanLII 1628 (ON SC), 34 O.R. (2d) 187 (S.C.), at para. 29, aff’d 1982 CanLII 2056 (ON CA), 39 O.R. (2d) 656 (C.A.); Toronto (City) v. Toronto Railway, [1907] A.C. 315 (P.C.). Failure to read an agreement in accordance with its headings may lead a court to misconstrue the contractual provisions (Solway v. Lloyd’s Underwriters (2006), 2006 CanLII 17254 (ON CA), 80 O.R. (3d) 401 (C.A.), at para. 44).”
Commonly, contracts will say that headings are only for convenience and have no interpretive role. You can’t tell from this decision whether this standard contractual interpretive provision was in the contract the Court was considering. But this OCA statement is worth keeping in mind.