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.
DATE August 15, 2016
TO [Addressee]
FROM
Heather Reardon
Senior Rulings Officer
Charities and Non-Profit Organizations Unit
Excise and GST/HST Rulings Directorate
Case Number: 172758
SUBJECT :
GST/HST INTERPRETATION
Camps for individuals who have a disability
This [correspondence] is in response to your [request] of [mm/dd/yyyy], concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to overnight camps operated by […](the Charity). Your enquiry was transferred to us for reply on [mm/dd/yyyy]. We apologize for the delay in providing our response.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
FACTS
We understand that:
1. The Charity is a registered charity for income tax purposes. The Charity is also a charity for GST/HST purposes.
2. The Charity is registered for the GST/HST, with GST/HST account number […].
3. According to the Charity’s website ([…]),
[…][information about medical condition A]
4. In a letter to the CRA dated [mm/dd/yyyy], […][Charity Official A], explained that […][medical condition A] is incurable and therefore lasts for the lifespan of the affected child. [Charity Official A] also stated […][description of the effects of medical condition A]
5. The Charity operates summer camps for children with [medical condition A], referred to as […][camps]. The Charity currently has [#] [camps]: […][list of location of camps]
6. According to the […][Charity’s promotional material], the focus of the Charity’s camping programs is […][to provide recreational activity to children with medical condition A].
7. The goals of [the] [camps] are: […].
8. In a letter to the CRA dated [mm/dd/yyyy], […][Charity Official B], […][described the purpose of the camps]
9. Each [camp] involves […][a variety of recreational activities].
10. Each [camp] involves overnight supervision throughout the whole program.
11. The [camps] are not intended to be provided primarily to individuals who are underprivileged.
12. Each [camp] is staffed by a team of […][various healthcare professionals]. […][Information about the healthcare professionals]
13. [Camp] seasonal program staff members participate in a pre-season training program. […]
14. […]
15. The […][Charity’s promotional materials] for […][the][camps] contain: […][ information and instructions for medical condition A while at the camp]
16. […][Description of treatment provided and management of medical condition A while at the camp].
17. […][Description of treatment provided for medical condition A while at the camp].
18. […][Description of camp activities related to medical condition A]
19. […][Description of camp activities related to medical condition A]
RULING REQUESTED
You would like to know if [medical condition A] is considered a disability under the ETA in order to determine whether subparagraph 1(f) of Part V.1 of Schedule V applies to the Charity’s [camps].
RULING GIVEN
Based on the facts set out above, we rule that the Charity’s supplies of services provided as part of the [camps] program are exempt under section 1 of Part V.1 of Schedule V.
EXPLANATION
Section 1 of Part V.1 of Schedule V exempts a supply made by a charity of any property or service, but not including a supply of…
(f) a service involving, or a membership or other right entitling a person to, supervision or instruction in any recreational or athletic activity except where
…
(ii) such services, memberships or rights supplied by the charity are intended to be provided primarily to individuals who are underprivileged or who have a disability.
In providing the [camps], the Charity is making supplies of a service involving supervision or instruction in a recreational or athletic activity. Therefore, these supplies fall within paragraph 1(f) of Part V.1 of Schedule V and would be excluded from the general exemption for charities unless subparagraph 1(f)(ii) applies. Subparagraph 1(f)(i) does not apply, given that each [camp] involves overnight supervision throughout the whole program.
Subparagraph 1(f)(ii) will apply if the services supplied by the Charity are intended to be provided primarily to individuals who have a disability. For purposes of the GST/HST, the CRA's interpretation of the term “disability” is that it generally refers to a long-term impairment that restricts an individual in carrying out his or her activities of daily living. The individual's disability may be either congenital, a result of injury, from a neuromuscular disorder such as Muscular Dystrophy or Multiple Sclerosis, or may result from conditions such as Cerebral Palsy, paraplegia, amputation, pulmonary disease, heart disease, arthritis, diabetes, and back disorders.
For purposes of subparagraph 1(f)(ii) of Part V.1 of Schedule V, we do not need to consider whether the individuals attending a [camp] in fact have a disability. The relevant consideration is the Charity’s intention in providing the [camps]. As such, the camp as a whole must be examined. The factors the CRA takes into consideration in determining whether a recreational or athletic activity or program is intended to be provided primarily to individuals who have a disability include:
* The purpose of the organization/program as set out in its governing documents;
* How the organization/program is promoted or advertised;
* The nature of the activities provided;
* The qualifications of instructors/staff;
* The ratio of staff to participants;
* Whether healthcare services are provided as part of the program;
* The nature design and use of the facilities; and
* How participants in the program are selected.
Based on these factors, the [camps] are intended to be provided primarily to individuals who have a disability. The camps are designed for children who are unable to attend a traditional summer camp because they are restricted in carrying out their activities of daily living as a result of having [medical condition A]. One of the goals of [the] [camps] is […]. The [camps] promotional materials highlight how the camp programs are tailored to the special medical needs of children with [medical condition A]. Each [camp] is staffed by a team of healthcare professionals and [activities related to medical condition A] are scheduled into each camp day.
As the Charity’s supplies of services fall within subparagraph 1(f)(ii) of Part V.1 of Schedule V, these supplies are not excluded from the general exemption by paragraph 1(f). The Charity’s supplies are also not excluded by any of the other paragraphs 1(a) to (p) of Part V.1 of Schedule V. Therefore, the Charity’s supplies of services provided as part of the [camps] program are exempt under section 1 of Part V.1 of Schedule V.
Please note, whether an individual is eligible for the income tax disability tax credit is not relevant for purposes of subparagraph 1(f)(ii) of Part V.1 of Schedule V. Although commonly referred to as the “disability tax credit”, the relevant provision of the Income Tax Act, section 118.3, does not contain the term “disability”. The criteria to qualify for a credit under section 118.3 of the Income Tax Act are very specific. Subparagraph 1(f)(ii) of Part V.1 of Schedule V of the ETA does not impose these same criteria.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613)952-9592.
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