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: 219425
Business Number: […]
Dear [Client]:
Subject: GST/HST RULING
Supply of educational programming
Thank you for your letter of November 9, 2020, concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to your supply of educational community programming. We apologize for the delay in this 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 based on discussions and information with/from you as well as information found on […][various] websites:
1. […](the Corporation) was incorporated in […][the Province] on July 30, 2020. It is operating as […].
2. The Corporation’s business number is […]. The Corporation is not registered for the GST/HST.
3. The Corporation is not a charity, a school authority, a vocational school, a public college or a university.
4. The Corporation is a community partner with […][the school authority]. There is no formal written agreement between the Corporation and […][the school authority].
5. […][Information from the school authority’s website that describes the schools under the jurisdiction of the school authority].
6. […](the School) is an alternative school under [the school authority] offering programs for grades 1-12. […][Information from the Province’s Education Act].
7. The School offers several diverse program options to homeschooling parents. One such program is […][Plan A] which is […] [for] students in grades 1-9. […]. […][The class schedules are flexible]. Staff work […] with families or with […] [external] program providers to support […][the provincial curriculum].
8. […][The flexible class schedule] allows the homeschooling parent to choose one of two options under [Plan A]: […][Option 1] whereby the parent […][shares teaching] with the School […]; or […][Option 2] whereby the School teaches the academic core subjects (Language Arts, Math, Science and Social Studies) and […][the balance of the Option 2 courses are] administered by parents or […][an external program provider] in consultation with teachers, who conduct visits to collaborate and create programs with them that meet the learning outcomes of […][the provincial] curriculum. […][Option 2] grants parents the flexibility to choose resources that they feel meet the needs of their children (pending teacher approval). In other words, the parent is provided the opportunity to submit a […] resource, [an external program provider] to the School. The School will meet with that […][external program provider] to go over the curriculum requirements for the corresponding curriculum course and ensure […][the program offered by the external program provider] meets the learning outcomes for the curriculum course. The School will monitor the program on an ongoing basis to ensure the curriculum requirements are being met.
9. The Corporation is […][an external program provider offering] instruction in various activities through […][the Program]. The parent would choose […][the Program] as the resource that meets the needs of their child. […][The Program] offers […]. Parents wishing to register their child in [the Program] must have enrolled the student in […][Option 2], […].
10. Parents register their child for [the Program] directly with the Corporation. The fee per student per school year is $[…]. The registration form serves as the Corporation’s invoice.
11. [The Program] follows […][the provincial] curriculum to provide physical education, arts, and health education . You work closely with the School’s liaison and together you develop the criteria for each activity in [the Program] to ensure the learning outcomes for each activity meet the requirements of the corresponding curriculum course. For example, all instruction in the […][sport X] activity must meet the requirements for the Physical Education curriculum course. The activities in [the Program] are [regularly] evaluated by the School’s liaison […] to ensure the learning outcomes are being met and to review the student’s progress.
12. [The Program] is available for students in Grades 1-9 utilizing multi-graded classrooms with groupings of grades 1-3, grades 4-6 and grades 7-9.
13. A typical school day for students registered in [the Program] is comprised of students attending their core academic courses at the School in the mornings, and in the afternoons they attend [the Program].
14. The Corporation has subcontractor service agreements with […] specialists in their respective fields. Each subcontractor agreement stipulates the learning outcomes required for the activity as developed with the School’s liaison. The Corporation chooses a variety of subcontractors in order to meet the curriculum requirements for each curriculum course. For example, to meet the requirements of the Arts curriculum course, […][the Corporation] subcontracts businesses who can provide instruction in drama classes and/or musical theater instruction. […][ Program] activities may be held at either the School or at the location of the subcontractor, depending on the activity.
15. You have provided a schedule of the activities for each term of the school year as well as the name of the corresponding curriculum course. Below is a list of the activities matched to their corresponding curriculum course:
[…][The Program] activities [and] their Corresponding Curriculum Course
[…][For the Arts Curriculum course, the Program activities are: Art, Drama and Musical Theatre]
[…][For the Physical Education Curriculum course the Program activities are: Dance, Rugby, Basketball, Soccer, Orienteering, Hockey/Skating, Baton, Yoga, Tumbling/Cheer, Sportball, Gymnastics, Track and Field, and Lacrosse]
[…][For the Health and Life Skills Curriculum course the Program activities are: Environmental Stewardship, […], Champions of Health, Leadership, Gardening, and Horsemanship]
[…][For the Technology Curriculum course the Program activities are STEM]
[…][For the Music Curriculum course the Program activity is Music]
16. The Corporation offers […] terms in each school year. Each term consists of instruction in different activities broken down by multi-graded groups of grades 1-3, grades 4-6 and grades 7-9. Once a […] term is completed, the student begins a new […] term with new activities. The following is a sample of the schedule of activities for one term: […]
17. Students registered for […][the Program] are enrolled in all activities scheduled in the […] term and must attend each activity unless they are sick or have been given permission by the School to be out of class. The students cannot pick and choose which activities in […][the Program] they would like to attend. Failure to attend all the required activities may result in a failing grade in the corresponding curriculum course.
18. At the end of the school year, the School’s liaison meets with you and together you determine the student’s grade in the respective curriculum course using the School’s and […][the Province’s] assessment tools. This grade is included on the School’s issued report card. For example, you will generally provide to the School a grade classification, such as 70%, which is equivalent to the School’s grade of ‘competent’. Provided the School’s liaison agrees with this grade based on their weekly evaluations, the student will receive a grade of ‘competent’ in the corresponding curriculum course.
19. Due to insurance concerns, […][the school authority] will be taking over […][the Program] from the Corporation. […][The school authority] will continue to run […][the Program] at the School starting in September [….]. You will become an employee of […][the school authority] and will continue to hire the subcontractors and coordinate […][the Program] for […][the school authority].
RULING REQUESTED
You would like to know:
1. Were the supplies made by the Corporation exempt?
RULING GIVEN
Based on the facts set out above, we rule that:
1. The Corporation’s supplies of a service of instructing individuals in a course in [the Program] were exempt from the GST/HST.
EXPLANATION
Generally, most supplies of property and services made in Canada are taxable, unless they are specifically identified as being exempt. Exempt supplies are listed in Schedule V to the ETA and are not subject to the GST/HST.
Paragraph 9(a) of Part III of Schedule V exempts a supply of a service of tutoring or instructing an individual in a course that is approved for credit by, or that follows a curriculum designated by, a school authority. [the Program] consists of instructing students through various activities, the structure and content of which meet the learning outcomes of their corresponding curriculum courses which have been designated by a school authority. As the requirements in paragraph 9(a) of Part III of Schedule V have been met, the Corporation’s supplies of a service of instructing individuals in a course in [the Program] are exempt from the GST/HST.
ADDITIONAL INFORMATION
Input tax credits (ITCs)
ITCs may be claimed in respect of the GST/HST paid or payable for property and services acquired by a registrant for consumption, use or supply in the course of making taxable supplies for consideration. In other words, to be eligible to claim ITCs, an entity must be a registrant for GST/HST purposes and must also be making taxable supplies. For more information on ITCs, please refer to GST/HST Memorandum 8.1, General Eligibility Rules.
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. The additional information given in this letter is not a ruling and does not bind the CRA with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the ruling or the additional information provided herein.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 873-455-1962. 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.
Sincerely,
Connie Carnegie
Public Service Bodies and Rebates Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
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