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
Case Number: 90031
Business Number: XXXXX
Attention: XXXXX
XXXXX
February 17, 2009
Subject:
GST/HST RULING
GST Rebate Available to XXXXX
XXXXX:
Thank you for your letter of XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the XXXXX.
All legislative references are to the Excise Tax Act (the "Act") unless otherwise specified.
We understand that:
1. The Council was established by XXXXX. The purposes of the Council were set out in sections 3 and 5 of that Act:
XXXXX
XXXXX
2. The balance of XXXXX provides for the constitution of the Council, the appointment and removal of its directors and officers, and the XXXXX.
3. In XXXXX the Council petitioned the Minister of Industry to bring the Council within XXXXX.
4. XXXXX allows a federal corporation to be brought under the operation of that Act:
XXXXX
5. In its petition, the Council altered the objects of the corporation from those set out in XXXXX. The new objects of the Council as per the letters patent issued by the Minister of Industry are:
XXXXX
6. The bylaws of the Council deal primarily with internal regulatory matters, meetings, amendments to governing documents, and examinations.
7. The Council was registered as a charity under the Income Tax Act XXXXX
8. XXXXX
XXXXX
9. XXXXX
XXXXX:
XXXXX:
• XXXXX
• XXXXX.
XXXXX:
• XXXXX.
• XXXXX.
• XXXXX.
• XXXXX.
• XXXXX.
• XXXXX.
10. XXXXX.
11. Your letter of XXXXX sets out the current activities of the Council as follows:
XXXXX.
XXXXX
12. The Council enters into an agreement with every Canadian university XXXXX
XXXXX
XXXXX.
Ruling Requested
You would like to know if the XXXXX ("the Council") qualifies as a "university" under the Act and therefore may claim the Public Service Body Rebate ("the rebate") at the rate provided for "Universities and Public Colleges".
Ruling Given
Based on the information provided, we believe that XXXXX does not meet the definition of "university" in the Act and therefore cannot claim the rebate at the rate provided for universities.
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
S. 123(1) of the Act defines "university" as follows:
"university" means a recognized degree-granting institution or an organization that operates a college affiliated with, or a research body of, such an institution; XXXXX
Policy P-220 "Domestic entities that qualify as a "university" in the Excise Tax Act" states that the following entities qualify as a university:
The term "university" is defined in subsection 123(1) of the ETA as "a recognized degree-granting institution or an organization that operates a college affiliated with, or a research body of, such an institution". The Department's position is that there are three categories of domestic entities that will qualify as a university. Those three categories are:
1. a degree-granting institution that grants degrees at least at the bachelor or equivalent level that is established as a university or degree-granting institution by legislation enacted by the appropriate Canadian jurisdiction in which it is situated, or
2. any organization that operates a college affiliated with an institution in #1. An organization is considered to operate an affiliated college of a university or degree-granting institution (the "parent") only where there is a formal affiliation agreement between the parent and the affiliate wherein the parent agrees to grant degrees to graduates of the affiliated college in exchange for a certain degree of control over the academic standards and course offerings of the affiliated college; or
3. a research body of an organization in #1. In order for an entity to be considered a research body of a university or degree-granting institution, the entity must be established and operated primarily to perform research and the research body must be owned and controlled by a university or degree-granting institution.
(1) Recognized Degree Granting Institution.
The Council is not a recognized degree granting institution. XXXXX Further, no level of government recognizes the Council as a university in any applicable statutes or regulations.
(2) Operates a College Affiliated with a Degree Granting Institution.
It is possible that even if an entity does not use the word "college" in its name, it may nevertheless be a "college' within the meaning of this definition of University.
Our policy P-186R Funding for Public Colleges sets out our definition of "college" as follows: "In order for a facility in Canada to be considered a college, it must be established and operated pursuant to the relevant federal or provincial legislation governing the establishment of 'colleges'."
The Council was not established as a college XXXXX. At this time it is not recognized as a college by any provincial or federal legislation. The Council's day to day operations are not governed by any legislation which governs the operation of colleges.
In addition, the Council is not affiliated with any degree granting institutions.
Whether or not a college is affiliated with a degree granting institution is a matter of fact that can be proven by the existence of a formal agreement of affiliation wherein the degree granting institution agrees to grant degrees to graduates of the college in exchange for a certain degree of control over the academic standards and course offerings of the college.
The Letter of Agreement provided by the Council does not contain any of the components of a true "affiliation agreement" as it is described in Policy P-220 set out above.
(3) A Research Body of a Degree Granting Institution.
A research body of a university is an organization that:
(a) is established and operated primarily to perform research; and
(b) is either
(i) owned exclusively by a university; or
(ii) engaged in performing research exclusively for a university.
Neither the Council's original constituting statutes, nor the subsequent Letters Patent issued by the Minister of Industry, support the conclusion that the Council was establish and operated primarily to perform research. The Council was established and operated primarily to XXXXX.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-0329. 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,
Michael Mavis
Charities, Non-Profit Organizations and Educational Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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