30 November 2006 GST/HST Ruling 62841R2 - XXXXX Retirement Residence

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:

This is further to your letter XXXXX and our telephone conversation XXXXX concerning the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) ruling XXXXX, issued to XXXXX.You requested that the Canada Revenue Agency ("CRA") review and confirm the decision that the supplies made by XXXXX pursuant to the XXXXX are taxable. We understand that the issue for which you require confirmation is the tax status of the supply made by XXXXX of the services rendered by a registered nurse under the Job Title 'Charge Nurse' (previously referred to as 'Nurse Manager') at XXXXX, the facility operated by XXXXX.

After further review of the activities that comprise the supply of the services rendered by the registered nurse under the job title 'Charge Nurse' and in consideration of the additional information you provided in our telephone conversation, we have revised our position regarding the tax status of this supply. Accordingly we are revoking the GST/HST ruling that the supply made by XXXXX consisting of the services rendered by the registered nurse made to XXXXX are taxable.

The general rule under the Excise Tax Act (the "ETA") in section 165 is that all supplies of goods and services made in Canada are subject to the GST/HST at the rate of 6% or 14%. Part II of Schedule V to the ETA contains a list of exceptions for specific health care services that are identified as being exempt from the GST/HST. As explained in the GST/HST ruling, paragraph 6(a) of Part II of Schedule V exempts a supply of a nursing service rendered by a registered nurse to an individual in a health care facility.

Briefly, nursing services are understood to be the provision of direct 'hands-on' care and the treatment of the health conditions of a patient rendered within the skilled practice of nursing. Nursing services may involve medication administration, interventions, assessment of health status, and coordination of health services performed by registered and other licensed nurses. We understand that nursing services are governed by specific provincial and territorial legislation and regulations. A registered nurse is an individual who meets certain prescribed standards of education, clinical competence and registration or other licensing requirements.

Whether a supplier has made a supply of a nursing service rendered by a registered nurse to an individual in a health care facility will be a question of fact. For instance, we would consider whether the supplier is the person with the contractual responsibility for the provision of nursing services rendered to specific individuals. If, however, the supplier's contractual responsibility is limited to providing a registered nurse to another organization or business so that the other organization or business may satisfy its own staffing requirements, this fact may demonstrate that the supply is that of human resources. Accordingly, we would evaluate the terms of a contract or an agreement and the supplier's invoice to the recipient for the supply to ascertain the supply.

The XXXXX Agreement XXXXX that was submitted with the ruling request was determined to be a global contract for the provision of multiple supplies made by XXXXX in relation to the management and implementation by XXXXX of a 'Care Services Operation' involving the delivery of various services to the residents of XXXXX. We note that it was understood that XXXXX is a facility that falls within the meaning of paragraph 1(c) of the definition of "health care facility" in Part II of Schedule V.

The XXXXX Agreement describes the scope of services to be provided under the 'Care Services Operation', the work to be performed by various persons, and the fee schedule relating to the delivery of services by these persons. On the basis of the 'Job Titles' contained in XXXXX Job Descriptions, we understand these services involve multiple supplies that include:

•   Management services rendered by a 'Care Manager';

•   Nursing care and the supervision of licensed practical nurses rendered by a registered nurse under the job title 'Charge Nurse';

•   Nursing care rendered by licensed practical nurses;

•   Planning, monitoring and controlling the work of resident care aide staff rendered by a 'Care Coordinator';

•   Daily assistance to residents rendered by one or more resident care aides; and

•   Development and evaluation of recreation programs rendered by a 'Recreation Coordinator'.

On the basis of the information provided with your letter XXXXX, the CRA issued a GST/HST ruling that the above supplies made to XXXXX were taxable, with the exception of the supply of nursing care rendered to the residents of XXXXX by licensed practical nurses.

We understand that XXXXX supply of the services rendered by a registered nurse consist of assessing and planning the care of the residents of XXXXX, providing daily nursing care to these residents, and supervising the licensed practical nurses in the performance of their duties. These services are rendered by a person with current, active registration with the XXXXX, which is the regulatory body for registered nurses, nurse practitioners and licensed graduate nurses in that province. These services are listed in the Job Title 'Charge Nurse' in XXXXX Job Description and were summarized in our letter of XXXXX. To reiterate, these services are as follows:

•   Supervises and performs nursing care including administration and distribution of medications, medical treatments and procedures.

•   Directs and assists in the use of appropriate procedures.

•   Hires, orients, evaluates, disciplines and terminates staff as necessary.

•   Evaluates the effectiveness of nursing care treatment, documenting significant changes in the condition of residents, and ensuring appropriate treatment is provided in accordance with the direction of the resident's family physician.

•   Implements changes to care plans as necessary, ensuring that care plans are current and followed by staff.

•   Responds to emergencies or unusual incidents, reporting where appropriate to the General Manager, XXXXX representatives.

•   Organizes and documents the admission and discharge of residents.

•   Uses and directs staff in the use of established infection control techniques.

•   Assists with the coordination and presentation of in-service programs.

•   Ensures that all shifts are appropriately staffed.

The services rendered by the registered nurse include administrative, management and human resource activities. You explained in our telephone conversation XXXXX that these activities are an essential part of a registered nurse's duties and that they are mandatory to satisfy regulatory requirements set by the provincial government as well as the standards set by the XXXXX and the facility operator. These activities are difficult to quantify and define; however, they may include interaction with physicians and families of residents, documenting information on the resident, and ensuring that appropriate care is provided to the resident by the licensed practical nurses. You advised that nursing services provided by a licensed practical nurse must be carried out under the supervision or direction of a physician or a registered nurse who is providing services to that individual.

The administrative, management and human resource activities are integral components of the registered nurse's activities; however, we understand that these activities are not significant such that they would characterize the registered nurse's activities as something greater than nursing services rendered to an individual. You explained that more than XXXXX% of the activities for which XXXXX was contracted to provide with respect to the registered nurse was the provision of direct nursing services rendered to the residents of XXXXX. Thus, we understand that the predominant activities of the registered nurse are that of providing direct nursing care to the residents of XXXXX involving administering medications, changing dressings, bladder irrigations, and colostomy cauterization, in conjunction with supervising and directing the licensed practical nurses relating to the overall delivery of nursing care to the residents.

The totality of the information provided demonstrates that XXXXX supply under the above-noted agreement with respect to the registered nurse is that of nursing services rendered to the residents of XXXXX. This information includes the fact that the registered nurse is an employee of XXXXX who has a contractual responsibility to provide nursing care by a registered nurse to the residents. Through the activities of the registered nurse, XXXXX is responsible for the various levels and standard of nursing care rendered to the residents by the licensed practical nurses, which includes the management, direction and supervision of these services. XXXXX also employs an on-site manager, i.e., a 'Care Manager', to manage and oversee the entire 'Care Services Operation' at XXXXX.

The 'Care Manager' ensures that the nursing services rendered by the licensed practical nurses and the registered nurse meet particular standards. The licensed practical nurses and registered nurse report to and take their day-to-day direction from XXXXX. Further, XXXXX establishes policy, procedure and protocols, oversees staffing actions undertaken by all on-site staff, provides clinical support, ensures regular training and education is available to staff, monitors expenditures relating to the provision of care services, and prepares monthly reports on these services.

In summary, it is our view that the supply made by XXXXX of services rendered by a registered nurse within the scope of the Job Title 'Charge Nurse' as described above pursuant to the agreement with XXXXX falls within the exemption in paragraph 6(a) of Part II of Schedule V to the ETA, i.e., this supply is a nursing service rendered to an individual in a health care facility.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Goods and Services Tax Rulings. We are bound by this ruling provided that none of the above issues is 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.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 952-6761.

Yours truly,

Susan Eastman
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

2006/11/10 — RITS 76978 — Supplies of Publications with CDs