CRA rules that hospitals could access the high hospital GST/HST rebate rate under a collective property procurement arrangement

An Ontario hospital typically is entitled to a high rebate of GST/HST on its non-creditable costs in the course of its hospital activities, and to a lower rebate respecting other purchases. A group of Ontario hospitals and similar facilities entered into a group procurement arrangement under which one hospital contracted as principal with an outside supplier of property, but provided such property mostly to the other hospitals (but also partly for its own use) in their hospital or similar activities, and was reimbursed by them on an equitable basis.

But for ETA s. 259(7), the purchasing hospital would only have been entitled to rebates at the low rate on its purchases. CRA ruled that pursuant to s. 259(7), it was entitled to rebates at the high rate given that the other hospitals used the acquired property “exclusively in the course of their hospital authority activities.”

Neal Armstrong. Summary of 25 February 2020 GST/HST Ruling 202245 under ETA s. 259(7).