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.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 129278
March 30, 2021
Dear [Client]:
Subject: GST/HST RULING
[…][Manual Osteopathic Services]
Thank you for your [correspondence] […], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to supplies of osteopathic services made by Osteopathic Manual Practitioners. We apologize for the delay in our 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 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:
1. Osteopathy is a specific manual assessment and treatment methodology whereby an osteopathic practitioner uses palpation skills to assess, treat, and evaluate the various body structures and functions within the musculoskeletal, respiratory, cardiovascular, digestive, reproductive, lymphatic, vascular and neurological systems. Osteopathy uses a variety of techniques and modalities to achieve optimal and balanced health and to maintain or restore normal function.
2. […][Information about organizations for Osteopathic Manual Practitioners in Canada and in the Provinces]
3. […][More Information about organization for Osteopathic Manual Practitioners]
4. There are several providers of manual osteopathic education in Canada. According to your letter, the highest standard of education for Osteopathic Manual Practitioners consists of a minimum five-year post graduate academic, clinical and research program of manual osteopathic education (Program) with faculty consisting of, and clinical supervision by, Osteopathic Manual Practitioners.
5. In order to be admitted to the Program, a prospective student must have obtained a degree from an accredited university and must be registered to practice with a provincial health regulatory college. In Ontario, for instance, the student must be registered with a regulatory college, in accordance with the Regulated Health Professions Act, 1991 and the regulations thereunder. This prerequisite allows the student to interface with patients or clients as a regulated health professional. For example, in Ontario, a physiotherapist with a university degree can seek admission to the Program provided they are registered with the College of Physiotherapists of Ontario.
6. Under this particular standard of education, in order to become an Osteopathic Manual Practitioner, a student must complete a mandatory thesis and dissertation defence within two years of completing the five-year Program. A student must also complete the required number of supervised clinical hours.
7. There are […] educational institutions in Canada that offer this particular standard of manual osteopathic education. The […] Collège d'Études Ostéopathiques (CEO) in Montréal, […] has been operating since 1982. The Canadian College of Osteopathy (CCO), with branches in Toronto, Halifax, Vancouver, Calgary and Winnipeg, […]. The Canadian Academy of Osteopathy and Holistic Health Sciences (CAO) in Hamilton […] [also] offers this standard of education.
8. Students graduate from the CCO and the CEO with a Diploma in Osteopathic Manual Practice and the designation “D.O.M.P.” or a Diploma of Osteopathy (Québec) “DO(Qc)”. Students graduate from the CAO with a Diploma in Osteopathy Manipulative Theory and Practice (DOMTP). According to your letter, [the DO(Qc) designation and] the D.O.M.P. […][designation] […][identify] practitioners as graduates of the CCO and CEO programs in Osteopathic Manual Practice and demonstrate that the manual practitioner has achieved the required standard of education and training in the area of osteopathy, and that this credential verifies that particular individual’s skill and experience.
9. The World Osteopathic Health Organization (WOHO) is an organization that promotes, develops and establishes, throughout the world, the study, philosophic tenets, science, and practice of osteopathy. WOHO seeks to ensure the worldwide availability of manual osteopathic practice of the highest standard and its integration into existing health services in various countries. The requirement of the standard of education in Canada to complete a minimum number of supervised clinical hours (noted in Fact #6 above) is necessary in order to meet the international standards set by WOHO. […][Members of certain organizations for Osteopathic Manual Practitioners in Canada and in the Provinces may be] members of WOHO.
10. In 2003, the World Health Organization (WHO) released a Resolution promoting the integration of traditional/complementary and alternative medicine into national health care systems. In November 2010, the WHO, working in conjunction with the WOHO, released the Benchmarks for Training in Osteopathy (Benchmarks). According to your letter, the Benchmarks publication represents what the community of practitioners, experts and regulators of osteopathy considers to be necessary educational models for osteopathic practitioners and it provides the training benchmarks for practitioners with different healthcare backgrounds as well as contraindications for safe practice of osteopathy. The Canadian educational standard described above meets the standards described in the Benchmarks publication.
11. The services provided by members of […][certain organizations for Osteopathic Manual Practitioners in Canada and in the Provinces] are covered by a number of health and auto insurance plans in Canada (that is, they are covered by certain non-provincial health care insurance plans). You provided a sample of insurance plan coverage […].
Please note that, in this ruling, the terms “manual osteopathic services”, “Osteopathic Manual Practitioner” and “manual osteopathy” do not refer to the profession of osteopathy that is practised by an Osteopathic Physician (as described in Fact #9 above).
RULING REQUESTED
You would like us to confirm that manual osteopathic services provided by Osteopathic Manual Practitioners are exempt from GST/HST pursuant to section 7 of Part II of Schedule V.
RULING GIVEN
Based on the facts set out above, we rule that a supply of manual osteopathic services rendered by an Osteopathic Manual Practitioner is not exempt from GST/HST under section 7 of Part II of Schedule V. Therefore, where no other exempting provision applies, the supply will be taxable for GST/HST purposes at a rate of 5%, 13% or 15%, depending on the province in which the supply is made.
EXPLANATION
Generally, most supplies of property and services made in Canada are subject to GST/HST, unless they are specifically exempt under Schedule V or zero-rated (taxed at 0%) under Schedule VI. Part II of Schedule V sets out the health care services that are exempt from GST/HST. A supply of a health care service rendered by a health care professional that is not included in Part II is generally subject to GST/HST.
Section 7 of Part II of Schedule V
Section 7 of Part II of Schedule V exempts from GST/HST the supply of an optometric, chiropractic, physiotherapy, chiropodic, podiatric, osteopathic, audiological, speech-language pathology, occupational therapy, psychological, midwifery, acupuncture or naturopathic services rendered to an individual when a practitioner provides the service. Therefore, in order for a supply to be exempt pursuant to section 7, the supply must be a supply of a service listed in section 7 and the supply must also be rendered to an individual by a practitioner of that service.
Section 1 of Part II of Schedule V defines “practitioner” in respect of a supply of optometric, chiropractic, physiotherapy, chiropodic, podiatric, osteopathic, audiological, speech-language pathology, occupational therapy, psychological, midwifery, dietetic, acupuncture or naturopathic services to mean a person who
(a) practises the profession of optometry, chiropractic, physiotherapy, chiropody, podiatry, osteopathy, audiology, speech-language pathology, occupational therapy, psychology, midwifery, dietetics, acupuncture or naturopathy as a naturopathic doctor, as the case may be,
(b) where the person is required to be licensed or otherwise certified to practise the profession in the province in which the service is supplied, is so licensed or certified, and
(c) where the person is not required to be licensed or otherwise certified to practise the profession in that province, has the qualifications equivalent to those necessary to be so licensed or otherwise certified in another province.
For purposes of section 7, to be a practitioner in respect of osteopathic services, a person must be licensed or otherwise certified to practise the profession of osteopathy in the province in which the service is supplied (paragraph (b) of the definition of practitioner), or, where the person is not required to be licensed or otherwise certified to practise the profession in that province, the person must have the qualifications equivalent to those necessary to be so licensed or otherwise certified in another province (paragraph (c) of that definition).
In order to be licensed or otherwise certified to practise a particular health profession in a province, a person must have a licence or other certification required by a provincial regulatory body responsible for the regulation of the health profession in that province. The role of these provincial regulatory bodies and the authority to monitor and regulate their respective health professions is set out in provincial legislation.
In Ontario, the practice of osteopathy is regulated in conjunction with the practice of medicine under the Medicine Act, 1991 and falls under the jurisdiction of the College of Physicians and Surgeons of Ontario (College). Subsection 9(1) of the Medicine Act, 1991 provides, in part, that no person other than a member of the College shall use the title “osteopath” or any variation or equivalent. Further, pursuant to subsection 9(3) of the Medicine Act, 1991, no person other than a member of the College shall hold himself or herself out as a person who is qualified to practise as an osteopath in Ontario.
Therefore, with respect to supplies of services made in Ontario, an Osteopathic Manual Practitioner, such as a person who possesses a Diploma in Osteopathy Manual Practice, is not a practitioner for purposes of section 1 of Part II of Schedule V and, consequently, a supply of manual osteopathic services rendered by such an Osteopathic Manual Practitioner is not exempt under section 7 of Part II of Schedule V.
With respect to supplies of manual osteopathic services made in provinces other than Ontario, the relevant provincial legislation for each province or territory was reviewed in order to identify any provincial licensing or certification requirements. Based on this review, it is our understanding that there are no provincial licensing or certification requirements in any province or territory in Canada for the profession of manual osteopathy and, accordingly, there are no provincial regulatory bodies responsible for the regulation of the profession of manual osteopathy.
As manual osteopathy is not currently regulated as a health profession in any province or territory, Osteopathic Manual Practitioners do not need to be licensed or otherwise certified to practise the profession of osteopathy. As such Osteopathic Manual Practitioners do not meet the requirements to be licensed or certified or have the equivalent qualifications to be licensed or certified in another province and are not “practitioners” for GST/HST purposes. Therefore, supplies made by a Osteopathic Manual Practitioner are not exempt under section 7.
We understand that there has been some confusion regarding the tax status of supplies made by Osteopathic Manual Practitioner . In response to this, the CRA published the article “The application of GST/HST to manual osteopathic services” in Excise and GST/HST News – No. 108 which stated:
There have been no changes to the legislation related to supplies of manual osteopathic services and the CRA has consistently communicated the tax status of these supplies over the years. However, we understand that some in the osteopathic community may have believed that their services were exempt and are not currently registered for the GST/HST. To assist the community, the CRA is taking an educational approach and encouraging the manual osteopathic practitioners to register, if they are not a small supplier. Moving forward, they will need to collect, file, and remit (pay) the GST/HST on their manual osteopathic services.
The CRA reserves the right to assess retroactively where continuous and/or severe non-compliance is observed for the period prior to September 2020. This could be the case where a manual osteopathic practitioner was previously advised that their services were taxable, that they needed to register, and neglected to do so.
The full article can be found on our website.
Section 9 of Part II of Schedule V
Section 9 of Part II of Schedule V exempts a supply (other than a zero-rated supply) of any property or service but only if, and to the extent that, the consideration for the supply is payable or reimbursed by the government of a province under a plan established under an Act of the legislature of the province to provide for health care services for all insured persons of the province. An "insured person" is defined in section 1 of Part II of Schedule V to have the same meaning as in the Canada Health Act. An example of a provincial health insurance plan described in section 9 is the Ontario Health Insurance Plan (OHIP).
It is a question of fact as to whether the consideration (or a portion of the consideration) for the supply of manual osteopathic services is paid or reimbursed by the government of a province under a plan described in section 9 of Part II of Schedule V to the ETA. Where the requirements of section 9 of Part II of Schedule V are met, the supply of manual osteopathic services would be exempt to the extent that the consideration for the supply is payable or reimbursed by a provincial health care plan.
Your [correspondence] […] indicates that the services provided by members of […][certain organizations for Osteopathic Manual Practitioners in Canada and in the Provinces] are covered by a number of health and auto insurance plans in Canada that are not provincial health insurance plans. Section 9 of Part II of Schedule V would not apply to a payment or reimbursement under these insurance plans as these plans are not established under an Act of the legislature of the province to provide for health care services for all insured persons of the province.
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 given in this letter provided that: none of the issues discussed in the ruling 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.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 343-573-6076. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Art Blommesteijn
Health Care Sectors Unit
Public Service Body and Governments Division
Excise and GST/HST Rulings Directorate
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