Grants and Subsidies
Grants and subsidies can range from a simple contribution to larger sums for major projects funded by a government, municipality or other organization. The GST and the QST do not usually apply to such payments if the grantor does not receive any property or services in return.
However, if there is a direct link between a payment you receive and a supply you provide to either the donor or to a third party, the amount may be regarded as payment for a supply. In this case, the payment may be taxable and tax may need to be collected on the amount.