17 June 2004 GST/HST Interpretation 52075; H2224 - Request for Designation as a "Hospital Authority" by the XXXXX

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.

Dear XXXXX:

Thank you for your letter XXXXX, with attachment, concerning the application by the XXXXX for designation as a "hospital authority" for purposes of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST).

Your letter referred to the XXXXX restructuring process in XXXXX that resulted in the establishment of the XXXXX. However, there is no information about how XXXXX was established.

You explained that the XXXXX has responsibility for certain facilities, including hospitals. Your letter refers to three hospitals XXXXX. In addition, you refer to the XXXXX. However, there is no information that supports that the province recognizes these facilities as hospitals or that they meet the criteria required for designation as a hospital authority.

You attached to your letter a copy of a Ministerial Order pursuant to an XXXXX. The order describes the transfer of responsibility for certain facilities to XXXXX and exceptions to the transfer of responsibility. The order also provides that XXXXX.

As discussed with you and another XXXXX representative XXXXX, in order to be designated as a hospital authority, XXXXX must demonstrate that it operates a public hospital that meets the criteria set out in GST/HST Memoranda Series 25.2 Designation of Hospital Authorities. During our initial discussion, you accessed the memorandum at the CRA website and we discussed the application of the criteria to XXXXX. I have enclosed a copy of the memorandum for your reference.

However, you have now requested that we provide an explanation of the criteria in writing. Therefore, I have reproduced the criteria below and explained how an organization may demonstrate that it meets the criteria.

•   Established and operated otherwise than for profit.

Generally, an organization that it is established and operated other than for profit will include objectives that support this position in the documents that establish the organization. Therefore, documents that attest to the establishment of the XXXXX may support that the organization meets this criterion.

•   Recognized as a public hospital by the government of the province in which it is located.

We consider public hospitals to be facilities that receive provincial/territorial funding and are accountable for spending public money. In addition, these facilities provide services to the public. Public hospitals are recognized and regulated by the provincial or territorial government. Public hospital facilities may be identified in the provincial legislation that applies to hospitals, in regulations, by ministerial orders or in other official instruments. Therefore, where XXXXX is operating facilities that are public hospitals, it should provide the documents that support that the facilities are recognized as public hospitals by the provincial government.

•   Operated for the medical or surgical treatment of the sick or injured.

We consider that a facility that is established for the purpose of providing medical and/or surgical treatment would have available an organized medical staff comprised of licensed physicians and surgeons, surgical facilities, clinical laboratories and radiological facilities providing x-ray and other diagnostic services, a pharmacy and the maintenance of medical records on each patient. Evidence that this criterion has been met may include medical bylaws and publications (pamphlets, financial statements, etc.) that describe the facilities and services available at each hospital site.

•   Provides and maintains in-patient beds and services.

We consider that a facility that provides and maintains in-patient beds and services would have available accommodation in the facility, nursing services by registered nurses on a 24-hour basis and dietary services directed by qualified personnel to provide food for patients. Evidence that this criterion has been met may include admission criteria for patients, standards for the provision of nursing services and information about the food services available to patients.

Should you have further questions or require clarification on the above matter, please do not hesitate to contact me at 613 954-4390.

Yours truly,

S. Leclaire
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

2004/06/29 — RITS 52146 — Review of GST/HST Application Ruling [Concerning the Sale of Capital Real Property]