Cartier House Care Centre – Tax Court of Canada finds that the GST incidental supply rule did not apply where the allocation of consideration among the components was apparent

Paris J rejected CRA arguments that an independent contractor, who provided personal care services to a B.C. for-profit residential care home, including assistance with bathing, dressing, grooming, feeding, and incontinence management, was not thereby providing a (GST-exempt) "homemaker service," which was defined to mean "a household or personal service, such as cleaning, laundering, meal preparation and child care, that is rendered to an individual who, due to age, infirmity or disability, requires assistance." He applied the principle in National Bank of Greece v. Katsikonouris, [1990] 2 SCR 1029 that "the use of specific examples after a general term in legislation [here, "personal service"] does not restrict the meaning of the general term to cases similar to the specific examples."

In addition to the services (described above) of its "care aides," the contractor also provided "activity aides" (who focused on social activities for the residents, and whose time represented 5.4% of the total), and invoiced for the services of both aide types on the same invoice (showing the hours for each) and at the same hourly rate. In rejecting a submission that the incidental supply rule in ETA s. 138 effectively assimilated the otherwise-taxable activity aide services to the single supply of personal care "homemaker" services, Paris J stated that, as the hours for each service were evident on the invoice, "the consideration for each category of worker would be determinable and separate amounts" (so that there was no "single consideration") and that:

…[T]he activity aide services were not incidental to the care aide services. …[E]ach kind of service was independent of the other and had value as a separate supply.

This reasoning suggests that the incidental supply rule does not apply on an asset sale transaction where the purchase price is allocated between the component realty and personalty.

Neal Armstrong. Summaries of Cartier House Care Centre Ltd. v. The Queen, 2015 TCC 278, under Sched. V, Pt. II, s. 1 – home care service, Sched. V, Pt. II, s. 13, s. 138, Public Service Body Rebate (GST/HST) Regulations, s. 2 – government funding, Statutory Interpretation – Interpretation/Definition Provisions and Statutory Interpretation – Noscitur a Sociis.