Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
GST/HST Rulings Directorate
5th floor, Tower A, Place de Ville
320 Queen Street
Ottawa ON K1A 0L5
[Client Address]
Case Number: 246627
Business Number: […]
Dear [Client]:
Subject: GST/HST ruling
Supplies of nature immersion and outdoor education programming
Thank you for your correspondence of [mm/dd/yyyy], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to supplies of nature immersion and outdoor education programming. We apologize for the delay in this response.
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. The Government of Nova Scotia has proposed to decrease the rate of the HST from 15% to 14% effective April 1, 2025. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
We understand the following from your incoming letter, the supplemental documents, our telephone conversations, and the website […][of the Outdoor School]:
1. You have stated that […] ([…][the Outdoor School]) is a non-profit organization for GST/HST purposes.
2. [The Outdoor School] was incorporated under the […][relevant legislation of Province A] on [mm/dd/yyyy].
3. [The Outdoor School] offers nature immersion and outdoor education programming in a […][city in Province A]. It was founded in [yyyy].
4. According to [the Outdoor School’s] proposal to […] ([…][the Department of Education])[of Province A], [the Outdoor School’s] mission is to:
* help young people connect with nature in direct and meaningful ways that will foster knowledge and respect for the natural world and provide a strong basis for the development of future environmental stewards.
* make learning fun and instil a sense of curiosity and wonder.
* help kids become resilient and confident. By teaching life skills including teamwork, communication and decision making, you aim to help students become more successful at school, at home and in their community.
5. [The Outdoor School] is not certified, accredited or a member of a day camp association.
6. [The Outdoor School] is not licensed by the province to provide child care or day care.
7. [The Outdoor School] offers three types of environmental education programs:
a) nature immersion programs, which consist of:
i. […] week sessions where children attend one day per week […] during each session; and
ii. [#] throughout-the-school-year sessions, where older children attend one day per month and finish with an overnight expedition or campout
b) Instruction to School groups
c) A course provided to students of the […][Alternate School]
Nature immersion programs
8. Parents will sign-up their children for the nature immersion programs, which are given during the school year, and children participate in the programs during school hours.
9. Children will not fall behind in their regular schooling as the programs are designed to complement conventional classroom learning and homeschooling/unschooling choices.
10. Parents and school teachers are not present when children participate in the programs. The children are supervised by the staff of [the Outdoor School].
11. Most instructors are former/retired teachers or child care workers with experience in the woods, wilderness and outdoor education.
12. [The Outdoor School] offers six nature immersion programs:
* […][Group A]: […][under the age of 14]. […][Description of the activities]. The cost per child is $[…].
* […][Group B]: […][under the age of 14]. […][Description of the activities]. The cost per child is $[…].
* […][Group C]: […][under the age of 14]. […][Description of the activities]. The cost per child is $[…].
* […][Group D]: […][14 years of age or under]. […][Description of the activities]. The cost per child is $[…].
* […][Group E]: […][14 years of age or over]. […][Description of the activities]. The cost per child is $[…].
* […][Group F]: […][14 years of age or over]. […][Description of the activities]. The cost per child is $[…].
13. The programs were created so that students can spend more time outside and learn from a hands-on experiential approach.
14. You explain the following:
* […](Footnote 1)
* […](Footnote 2)
* […]. Health benefits include burning calories (reducing obesity), increased vitamin D in the body which means stronger bones, stronger immune system and reduced chances of chronic diseases. […].(Footnote 3)
* […](Footnote 4)
Instruction to School Groups / Curriculum Development Project
15. [The Outdoor School] submitted a funding request to the [Department of Education] which proposed:
* The goal for this funding request is to work with the […][Department of Education] to develop cross-disciplinary, multi-grade learning experiences that can be integrated into the public schools in the [Province A] Curriculum.
* The outcome would be to link school field trips to the [Outdoor School] directly to curriculum outcomes, thereby enhancing their relevance to teachers.
* [The Outdoor School] would create the Curriculum Development Project which would have [the Outdoor School] develop lesson plans for each grade level based on the [Province A] curriculum.
* The lesson plans would be comprised of three parts per grade: one lesson plan would be used by teachers in preparing students before they come to the [Outdoor School] facility; [#] lesson plans per grade will be provided from which the teacher can choose which activities they would like to use; and the third lesson plan is a follow up lesson plan the teachers can use to expand and build upon the learning once they return to their school.
* The intention is to develop programming and lesson plans for each grade level that explore concepts of […], while also engaging learners with Department of Education curricula goals.
* […].
16. In [mm/yyyy], the [Department of Education] approved $[…] in funding for the proposal “to assist with the development of programming to support the [Province A] public education curriculum”. The [Department of Education] requested a final report be provided by [the Outdoor School] on completion.
17. The final report provided to the [Department of Education] indicated the following:
* [The Outdoor School] has developed [#] lesson plans […].
* All of the lesson plans have been reviewed by at least two […][teachers in Province A].
* The lesson plans will be used when school groups come to [the Outdoor School’s] facility and also by teachers before and after they arrive.
18. […][The executive director of a division in the Department of Education] confirmed that [the Outdoor School] follows the [Province A] curriculum and its lesson plans are consistent with curriculum outcomes.
19. [The Outdoor School’s] lesson plans are primarily related to the science and physical education curriculum.
20. From the lesson plans, teachers can choose up to [#] activities for a half day for $[…], or [#] activities for a full day for $[…]. Students rotate through the activities during the visit. […], the activities include:
* […][description of the activities]
21. [The Outdoor School] hosts school groups on […][certain days of the week]. [The Outdoor School’s] staff may also deliver the chosen lesson plans at the client’s location, […].
22. You have stated that when children attend [the Outdoor School], the schools in the area view this as a learning opportunity and not an absence from school.
23. Teachers and educational assistants are present with the children during the activities.
[…](Alternate School)
24. The Alternate School worked with [the Outdoor School] to create a course that aligns with the objectives of the Grade 12 Physical Education […] Credit in [Province A].
25. The Alternate School is operated by the […][regional educational authority] and is for students in grades 8 through grade 12 in which a regular public school is not a good fit for the student. The program is paid for by the Alternate School.
26. Students from grades 8–12 can attend the course and will receive a grade 12 credit in Physical Education […] on successful completion. The students do not need to be in grade 12 to receive the grade 12 credit.
27. Lessons given at the Alternate School are not pre-set lessons but rather are created on a week-to-week, sometimes monthly, schedule. All lessons are pre-approved by the principal to ensure they align with the Grade 12 Physical Education […] course curriculum.
28. Teachers at the Alternate School are present during all lessons. The [Outdoor School’s] instructors communicate with the teachers to ensure the students are actively participating since completion of the program results in the students receiving a credit for the course.
RULING REQUESTED
You would like to know the following:
1. Are the supplies of the nature immersion programs exempt?
2. Are the supplies of a service of instruction provided to school groups exempt?
3. Are the supplies of a service of instruction in the Grade 12 Physical Education […] course provided to students of the Alternate School exempt?
RULING GIVEN
Based on the facts set out above, we rule the following:
1. The supply of the [Group A] nature immersion program is exempt under section 1 of Part IV of Schedule V.
2. The supply of the [Group B] nature immersion program is exempt under section 1 of Part IV of Schedule V.
3. The supply of the [Group C] nature immersion program is exempt under section 1 of Part IV of Schedule V.
4. The supply of the [Group D] nature immersion program is exempt under section 1 of Part IV of Schedule V.
5. Where the child is 14 years of age, the supply of the [Group E] nature immersion program is exempt under section 1 of Part IV of Schedule V. Where the child is over 14 years of age, the supply of the [Group E] nature immersion program is taxable and subject to the […][GST/HST].
6. Where the child is 14 years of age, the supply of the [Group F] nature immersion program is exempt under section 1 of Part IV of Schedule V. Where the child is over 14 years of age, the supply of the [Group F] nature immersion program is taxable and subject to the [GST/HST].
7. The supplies of a service of instruction provided to school groups are exempt under section 9 of Part III of Schedule V.
8. The supplies of a service of instruction in the Grade 12 Physical Education […] course provided to students at the Alternate School are exempt under section 9 of Part III of Schedule V.
EXPLANATION
Generally, most supplies of property and services made in Canada are subject to the GST/HST, unless they are specifically exempt under Schedule V or zero-rated (taxed at 0%) under Schedule VI. Part IV of Schedule V sets out the child and personal care services that are exempt from the GST/HST.
Section 1 of Part IV of Schedule V
Section 1 of Part IV of Schedule V exempts a supply of child care services, the primary purpose of which is to provide care and supervision to children 14 years of age or under for periods normally less than 24 hours per day, but not including a supply of a service of supervising an unaccompanied child made by a person in connection with a taxable supply by that person of a passenger transportation service.
As such, for the supply of a child care service to be exempt, the following conditions must be met:
1. The primary purpose of the service is to provide care and supervision;
2. To children 14 years of age or under;
3. For periods normally less than 24 hours per day; and
4. The supply is not a supply of a service of supervising an unaccompanied child made by a person in connection with a taxable supply by that person of a passenger transportation service.
GST/HST Memorandum 21-1 Child Care Services(Footnote 5), explains that child care services could include services provided by:
* a babysitter.
* a day care centre.
* a pre-school or nursery school.
* a day camp.
* an educational institution for the purpose of providing before and after school care.
The memorandum also states in paragraph 4, that where a child participates in a particular program that includes athletic, educational, or recreational activities, there can be an element of education and perhaps training as well as an element of child care. However, in any particular case, it is a question of fact as to whether child care services are provided or whether a program of instruction or education is provided. In determining whether a particular program is child care, some factors that would be considered are the age of the participating children, the qualifications of the individuals operating the program, the extent that progress is measured and goal-orientation is involved, and the time devoted to the program.
The Domaine de la Volière Inc. v. Canada, [2008] T.C.J. No. 429 decision states in paragraph 9 that, in regards to the application of section 1 of Part IV of Schedule V, “what must be determined is whether, intrinsically, in light of the evidence submitted with respect to the services provided to the school boards, those services consisted primarily in providing care or supervision to pupils or in providing them with educational and/or sporting activities.”(Footnote 6)
Similarly, the Arnold v. Canada, [2010] T.C.J. No. 198 decision states in paragraph 47 that “some overlap may exist between child care services (which are an "exempt supply") and training and recreational services (which are not exempt supplies). When there is an overlap, one must determine which service is essential to the supply and which service is incidental to the supply, or, in plain words, what is the supplier really offering?”(Footnote 7)
Nature immersion programs
When children participate in one of the six nature immersion programs, [the Outdoor School] is providing two services to the parents: the children are cared for and the children are educated in an outdoor setting.
The children participate in these programs during school hours and are supervised, cared for and educated by the staff at [the Outdoor School]. Parents and teachers are not present during this time. As such, it is clear that [the Outdoor School] is responsible for watching over and protecting the children, and that child care is the predominant element of the service provided to the parents. The children are at [the Outdoor School] for what would be a full day of school, once a week. These are long periods of time and as such, parents would not sign-up their children with [the Outdoor School] to be educated in an outdoor setting if care and supervision wasn’t provided, regardless of the many health benefits that their child could gain.
The outdoor activities in which the children participate are incidental to the care and supervision, which are the main components of the supply. [The Outdoor School’s] programs were not specifically created for children to become experts of everything related to nature and the outdoors. [The Outdoor School’s] main objective is for students to learn through a hands-on experiential approach, and the programs were created to complement conventional classroom learning. This reinforces the fact that parents do not sign-up their children with [the Outdoor School] for them to acquire or develop a specific skill or discipline. The programs are aligned with [Province A]’s education curriculum and [the Outdoor School] simply delivers the material in a different way than regular schools (i.e. by having the children outdoors and active rather than have them sitting in a classroom for six hours).
Consequently, where children 14 years of age or under participate in the […][Group A, Group B, Group C, Group D, Group E and Group F] programs, the supply constitutes child care services and is exempt under section 1 of Part IV of Schedule V.
When children participating in the programs are over 14 years of age, the exempting conditions under section 1 of Part IV of Schedule V are not met. As a result, where children 15 years of age or over participate in the […][Group E or Group F] programs, the supply is taxable and subject to the [GST/HST].
Instruction to School Groups / Curriculum Development Project
Paragraph 9(a) of Part III of Schedule V exempts a supply of a service of tutoring or instructing an individual in a course that is approved for credit by, or that follows a curriculum designated by, a school authority.
Since the teachers and their educational assistants are in attendance on the day of the school group trip, the primary purpose of [the Outdoor School] is to provide educational and outdoor activities, and not the care and supervision of the children.
[…][The documents provided] confirm the lesson plans follow the [Province A] curricula and are consistent with curricula outcomes.
Therefore, the requirement that the supply of a service of instructing an individual in a course that follows a curriculum designated by a school authority has been met. The supplies of instruction provided by [the Outdoor School] to the school groups are exempt.
Instruction in the Grade 12 Physical Education […] course provided to students at the Alternate School
The requirement that the supply of a service of instructing an individual in a course that is approved for credit by a school authority has been met. Therefore, the supplies of instruction in the Grade 12 Physical Education […] course are exempt.
ADDITIONAL INFORMATION
Section 123(1) defines a school authority to mean “an organization that operates an elementary or secondary school in which it provides instruction that meets the standards of educational instruction established by the government of the province in which the school is operated”. Based on the facts, [the Outdoor School] does not operate an elementary or secondary school and therefore does not meet the definition of a school authority.
Exempt supplies are supplies of property and services that are not subject to the GST/HST. GST/HST registrants generally cannot claim input tax credits to recover the GST/HST paid or payable on property and services acquired to make exempt supplies.
You mentioned in our conversation that you continue to receive government funding from the province to create programs that merge your nature programs with the [Province A] curriculum or other priorities of the province. Depending on the nature of the funding, the GST/HST may apply to the payment(s) you have received. For more information, please refer to GST/HST Memorandum 18-4 Determining Whether a Transfer Payment is Consideration For a Supply. If you are uncertain if the government funding you have received is taxable, please do not hesitate to request a ruling.
DISCLAIMER
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) is bound by the ruling(s) given in this letter provided that: none of the issues discussed in the ruling(s) are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
CONTACT
If you require clarification with respect to the child care issues discussed in this letter, please call me directly at 873-455-1361. If you require clarification with respect to the education issues discussed in this letter, please contact Connie Carnegie directly at 873-455-1962.
Should you have additional questions on the interpretation and application of the GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287 or by fax to 1-418-566-0319.
Sincerely,
Kassandra Leonard
Rulings Officer
Health Care Sectors Unit
Public Service Bodies and Governments Division
GST/HST Rulings Directorate
FOOTNOTES:
1 […]
2 […]
3 […]
4 […]
5 GST/HST Memorandum 21-1, Child Care Services - https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/21-1/child-care-services.html
6 Domaine de la Volière Inc. v. Canada, [2008] T.C.J. No. 429, par. 9
7 Arnold v. Canada, [2010] T.C.J. No. 198, par. 47
Email this Content