CRA discusses the GST residential care exemption
ETA Sched. V, Pt. IV, s. 2 exempts “a supply of a service of providing care, supervision, and a place of residence to children, underprivileged individuals, or individuals with a disability in an establishment operated by the supplier for the purpose of providing such services.”
CRA has published a new GST/HST Memorandum on this exemption. Points made include:
- 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 include authority over making operational decisions in the establishment and control of day‑to‑day operations. (CRA presumably interprets the operator concept similarly in other contexts, e.g., the exemption under Sched. V, Pt. II, s. 2 respecting the operator of a health care facility.)
- 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 on general principles; however, supplies of services such as assessment, placement, and monitoring services regarding residential foster care are not exempt under Sched. V, Pt. IV, s. 2.
- 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.
Neal Armstrong. Summary of GST/HST Memorandum 21-2 “Residential Care Services” January 2019 under ETA Sched. V, Pt. IV, s. 2.