1 August 1996 GST/HST Interpretation 11895-5[5] - Assistance Relating to the Refuse Disposal Fees Charged by (the City) and Paragraph 20 (i) of Part VI of Schedule V to the Excise Tax Act (the Act)

I refer to the memorandum of February 21, 1995, from XXXXX of your office addressed to Ms. Joanne Houlahan, Manager, Public Service Bodies Unit of Special Sectors, GST Rulings and Interpretations. In her request XXXXX sought our assistance relating to the refuse disposal fees charged by XXXXX XXXXX (the City) and paragraph 20(i) of Part VI of Schedule V to the Excise Tax Act (the Act). I apologize for the delay in replying to the request.

Facts:

1. XXXXX (the By-Law) dated XXXXX, regulates and controls the storage, collection, removal and disposal of garbage, refuse and other waste in the City.

2. Refuse, as defined in paragraph XXXXX of the by-law, means all substances or materials disposed of within the City and includes animal waste, building waste, garbage, industrial chemical waste, litter, ashes, medical waste, dry refuse and yard waste; provided that any of the foregoing materials once lawfully deposited at a disposal site shall no longer constitute refuse.

3. Pursuant to article XXXXX of the by-law, all persons delivering refuse to a disposal site shall pay to the City for disposal of the refuse a fee calculated in accordance with the rates specified pursuant to the by-law.

4. Currently, the fees paid for disposal of refuse include a basic fee for refuse deposited at a sanitary landfill site, and separate surcharges for

(a) hard to handle waste,

(b) unloading time,

(c) late departures,

(d) a landfill site closure fund,

(e) a capital financing fund, and

(f) a landfill reserve fund.

5. The basic fee for refuse disposal allows users to deposit refuse at a sanitary landfill site, i.e. a refuse disposal site.

Hard to handle waste fee - The separate fee for hard to handle waste is charged to customers who dispose of waste that requires special or additional processing.

Unloading time - Users of the sanitary landfill site are given XXXXX within which to dispose of their refuse. For any amount of time spent in unloading refuse in excess of XXXXX customers are charged a fee based upon the additional amount of time.

Late departures - Users of the sanitary landfill site are required to use the site during the site's hours of operation. For those users who have not vacated the site at the close of operating hours, a fee is charged for the amount of time in excess of XXXXX following the close of operating hours.

Landfill site closure fund - The landfill site closure fund fee is an additional charge based on the weight of the garbage disposed to cover the cost of closing and maintaining the landfill site e.g. covering over site, landscaping, environmental studies, maintenance costs, etc.

Capital financing fund - The capital financing fund fee is an additional charge based on the weight of the garbage disposed to cover the cost of capital improvements to existing landfill sites such as landfill site buildings, roads and other facilities required to operate a landfill site.

Landfill reserve fund - The landfill reserve fund fee is an additional charge used to fund environmental projects undertaken by the City. For example, monies are provided from this fund to pay XXXXX of the City for clean up of the landfill site access road. This fund is also used for City programs, such as the household chemical clean-up program, the Christmas tree chipping program and the composting project.

6. The City provides refuse disposal to two types of users, charge customers and cash customers. The charge customers are invoiced monthly by the city based on a computerized recording system. This system records the customer's usage based on weighscale ticket information which indicates the time spent disposing of refuse and the weight of the refuse recorded in tonnes. Cash customers pay at the time of usage.

7. The fee schedule for the basic fee, hard to handle waste fee, unloading time, and funds referred to in 2 above for both charge and cash customers, are outlined in XXXXX[.]

8. The City provides disposal at both sanitary landfill sites and dry disposal sites. Sanitary landfill sites will accept refuse of any kind. Dry disposal sites will accept only non-combustible inorganic refuse.

Question:

Are the basic disposal fee, hard to handle waste fee, fee for unloading time, late departure fee, charge for the landfill site closure fund, capital financing fund charge and the landfill reserve fund charge consideration for a single supply of a right to deposit refuse at a refuse disposal site (an exempt supply under paragraph 20(i) of Part VI of Schedule V to the Act), or consideration in respect of multiple supplies?

Response:

It is our opinion that the City is making a single supply of a right to dispose refuse at a refuse disposal site for which the customer is charged a comprehensive fee. The hard to handle waste fee, fee for unloading and late departure fee all relate to the right to dispose of refuse at the site.

The fact that the City by-law indicates the various components of the billing for this right, does not indicate that multiple supplies are being made. In addition, the user of the refuse disposal site is required to pay, as part of the fee for using the site, a landfill site closure fund charge, a capital financing fund charge and a landfill reserve fund charge, none of which specifically relate to the physical activity of disposing refuse at the site. The City, as a means of ensuring funds are available for closing sites, creating new ones and continuing to pursue environmental projects, charge these fees as part of the cost of the right to dispose of refuse at the site.

As an exempt supply of a right to dispose refuse at a refuse disposal site pursuant to paragraph 20(i) of Part VI of Schedule V to the Act, GST will not apply to the basic fee, hard to handle waste fee, unloading time, late departure fee, landfill site closure fund charge, capital financing fund charge and the landfill reserve fund charge.

Should you have any questions, please contact Ms. Joanne Houlahan, Manager, Public Service Bodies Unit at (613) 954-7945 or Mr. Owen Newell, Policy Officer, Municipalities at (613) 954-4280.

J.A. Venne
Director
Special Sectors
GST Rulings and Interpretations