GST/HST Memorandum 21-2 “Residential Care Services” January 2019

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Summaries

Summary Under

Tax Topics - Excise Tax Act - Schedules - Schedule V - Part IV - Section 2

meaning of disability, underprivileged, operated/single supply of residential care

“Underprivileged” generally “refers to an individual who, being unable to provide for their own or their dependants’ basic requirements (including food, shelter, clothing, fuel, utilities, household supplies, and special personal needs), is in need of assistance … .
“Disability” generally refers to “a long‑term impairment that restricts an individual in carrying out their activities of daily living” and does not extend to merely being elderly or frail person, or temporarily disabled or incapacitated (e.g., from surgery).
An establishment is “operated” by a supplier when it has “management and control of the establishment on a day‑to‑day basis” - as to which indicative factors would be, for instance, authority over making operational decisions in the establishment, control of day‑to‑day operations and physical presence.
Premises leased or licensed to the supplier under an agreement can qualify; and “an establishment staffed by employees of a supplier would generally also be considered to be an establishment operated by the supplier.”
A supply of a service of arranging for a third party to supply the indicated items would not qualify, e.g., a provincial government contracts with a corporation to provide care, supervision, and a place of residence to a young adult with a disability and that corporation, in turn, arranges for a third party to provide the services.
Individuals’ provision of foster care is not considered to be a commercial activity and, thus, is not subject to GST/HST.
Supplies of services such as assessment, placement, and monitoring services regarding residential foster care are not exempt under Sched. V, Pt. IV, s. 2.
A person operating a long‑term residential care facility for residents with a disability who provides care, supervision, a place of residence, social worker services, activities (for example, arts and crafts), and meals will be considered to be making a single supply of a service whose dominant elements are those described in Sched. V, Pt. IV, s. 2, i.e., the provision of care, supervision, and the place of residence.
Where tenants under leases of residential units in a residential complex may acquire optional services for additional fees, such as personal grooming, laundry, and cleaning services, there will be considered to be multiple supplies, i.e., of real property and e.g. laundry services.

Words and Phrases

underprivileged disability operated

Summary Under

Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply

single supply of residential care

There will be considered to be a single supply described in Sched. V, Pt. IV, s. 2 notwithstanding that it comprises elements (e.g., meals) that would not be exempted if supplied alone and ancillary elements such as recreational services provided that the particular elements are not provided on an optional basis for an additional charge.

Summary Under

Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Commercial Activity

foster care not a business

Individuals’ provision of foster care is not considered to be a commercial activity and, thus, is not subject to GST/HST.

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GST/HST Memorandum 21-2 “Residential Care Services” January 2019

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