Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
Excise and GST/HST Rulings
Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
XXXXX
XXXXX
XXXXX
XXXXX
File No. 11880-1
Case Number: 104688
October 27, 2008
Subject:
GST/HST APPLICATION RULING
XXXXX
Dear XXXXX:
I am writing in response to your letter of XXXXX, requesting a ruling concerning the entitlement by the XXXXX (i.e., the "Foundation") for designation as a hospital authority for purposes of the Excise Tax Act (the "ETA").
Statement of Facts
Our understanding of the facts, the transactions, and the purpose of the transactions is as follows:
• The Foundation has been registered as charity under the Income Tax Act XXXXX. As such, it is a charity for purposes of the GST (Goods and Services Tax)/HST (Harmonized Sales Tax).
• The Foundation is not registered for purposes of the GST/HST.
• XXXXX
• The Foundation's XXXXX
• XXXXX
• XXXXX
• XXXXX
Ruling Requested
Is the Foundation eligible for designation as a hospital authority?
Ruling Given
Based on the facts set out above, we rule that the Foundation is not eligible for designation as a hospital authority for purposes of the GST/HST. Therefore, it is not eligible for the 83% rebate of the GST/HST available to hospital authorities for activities related to the operation of a public hospital.
This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.
Explanation
A "hospital authority" is defined in subsection 123(1) of the ETA as an organization that operates a public hospital and that is designated by the Minister of National Revenue as a hospital authority for purposes of Part IX of the ETA. The administrative criteria for designation as a hospital authority are set out in section 25.2 of the GST/HST Memoranda Series, Designation of Hospital Authorities. A copy is enclosed for your information.
To qualify for designation as a hospital authority, an organization must operate a "public hospital" that meets the following criteria:
• it is recognized as a public hospital by the government of the province in which it is located;
• it is established and operated otherwise than for profit;
• it is operated for the medical or surgical treatment of the sick or injured; and
• it provides and maintains inpatient beds and services.
For the purposes of the ETA, a public hospital is a building, or group of buildings under a common corporate structure operated by a hospital authority to provide medical or surgical treatment for the sick or injured, including acute, chronic or rehabilitative care.
A public hospital must demonstrate all of the following characteristics:
• The services of medical practitioners, nursing staff and allied health professionals must be available at all times to carry out the examination and diagnosis of patients and the provision of treatment and care.
• The services of health care personnel and health care equipment must be utilized for the provision of health care services to the general public. This includes laboratory, radiological and other diagnostic services, the administration of drugs, the use of operating rooms, obstetrical case rooms and medical or surgical supplies and equipment.
• Inpatient beds and services are provided. Patients are assigned a bed to receive diagnostic services, medical treatment and care. Inpatient services are also provided in the public hospital to ensure the patient's necessities of life and comfort, such as nursing services on a 24-hour basis, food services and laundry services.
• Operational and capital funding is received from provincial or territorial governments for the provision of publicly insured inpatient and outpatient hospital services.
• The hospital authority operates the public hospital under the laws of provincial or territorial governments respecting hospitals.
A facility that does not have all the characteristics listed above is not considered to be a public hospital for purposes of the ETA.
The criterion that a facility be operated for the purpose of providing medical or surgical treatment of the sick or injured refers to medical or surgical treatment provided by medical practitioners who are either employed by the facility or who actively practice medicine at the facility.
"Medical and surgical treatment" refers to treatment provided by a medical practitioner and does not refer to services provided by nursing staff, physiotherapists or other health care professionals, or to services related to providing comfort or the necessities of life.
"Treatment" is considered to mean services provided by a medical practitioner for the management and care of a patient to address a disease, disorder or injury and the exercise of professional skill in examining the patient, making a diagnosis, performing surgical procedures and alleviating the disease, disorder or injury.
For the purposes of the ETA, we consider a "patient" to be an individual who receives care and treatment in a public hospital, including diagnostic and or therapeutic services, and who appears in the hospital's registry or other official record as a patient.
"Inpatient beds" means beds occupied by patients who are admitted for treatment that requires at least one overnight stay. "Inpatient services" includes supporting inpatient services that are insured under a provincial or territorial health plan, such as nursing services, accommodation and related services, meals, laboratory and other diagnostic services and the administration of drugs.
The purpose of the Foundation is to raise funds for the benefit of the XXXXX. XXXXX.
As the Foundation does not itself operate a public hospital, this organization does not qualify for designation as a hospital authority and therefore, is not eligible for the 83% rebate available to hospital authorities for activities carried on in the course of operating a public hospital.
You mentioned in your letter that GST/HST Policy Statement P-245 includes "fundraising activities for its own use" under activities related to patient care that may be eligible for the 83% rebate. This means that an organization that operates a public hospital and that has been designated as a hospital authority may be entitled to claim an 83% rebate of the GST/HST paid in the course of its own fund-raising activities. A separate organization that carries on fundraising for a hospital authority is not eligible for designation as a hospital authority in its own right unless it meets each of the criteria for designation set out above.
Although the Foundation is not entitled to claim an 83% rebate of the GST/HST on the non-creditable tax charged on its purchases and expenses, it is eligible for the 50% rebate available to charities under the ETA.
Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-9590.
Yours truly,
Elaine Bonnah
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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