1 October 1998 GST/HST Interpretation HQR0001111 - Application of the GST to the Supply of a Law Enforcement Service to the Royal Canadian Mounted Police (RCMP)

                                                                        GST/HST Rulings and Interpretations
 Directorate
Place Vanier, Tower C, 10th Floor
25 McArthur Avenue
Vanier, ON K1A 0L5
Royal Canadian Mounted Police
1200 Vanier Parkway
Ottawa, Ontario, K1A 0L9                                                Case: HQR0001111

Dear Mr. Wawryk:

Thank you for your letter of February 16, 1998, (with attachments), concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the transaction(s) described below. You enclosed a copy of a contract between the XXXXX for our examination. It is understood that this contract is similar to others entered into by the RCMP with other municipal police organizations.

Statement of Facts

Our understanding of the facts, the transaction(s), and the purpose of the transaction(s) is as follows:

1. The Government of Canada through a tri-lateral agreement with XXXXX are sending police officers to participate in the XXXXX[.] The officers are to be assigned to XXXXX and will be providing law enforcement services.

2. The Royal Canadian Mounted Police (RCMP), on behalf of the federal government, has offered the opportunity to municipal police services to join the Canadian contingent. Funding for the Canadian contingent comes from XXXXX pays an amount to the RCMP of XXXXX per officer recruited and the RCMP pays that amount to the municipal force. The officers are not considered by the RCMP to be employees or members of the RCMP.

3. Many municipal police organizations have, through a Letter of Understanding, agreed to send personnel on the mission. These police officers remain and are identified as part of their municipal police service but are acting on behalf of the Canadian Government.

4. As per Mr. Ray Lemay, the GST Coordinator of the RCMP, the amount paid may exceed the remuneration received as salary and benefits received by the officer. The amount was established as the pay level of a particular rank of officer and the candidates may not be at that particular rank or, if the officer is of that rank, he/she may not be at that particular pay level. The difference between the amount received by the officer and the amount paid to the municipal police service would be retained by the municipal police organization.

[5]. The officers will continue to receive their salary and benefits from the municipal police organization.

[6]. The officers perform the duties under the auspices of XXXXX outside Canada. However, from the moment the officer is assigned to XXXXX XXXXX the officer is the responsibility of the Commissioner responsible for the mission operationally, logistically and administratively.

[7]. Officers begin their participation in the mission by undergoing training put on by the RCMP in Ottawa in the use of certain firearms as well as a 5 day preparatory training session.

[8]. XXXXX[.]

[9]. The RCMP agrees to reimburse

i) all travel and lodging expenses related to the officer's deployment to the mission and to reimburse all travel and lodging expenses related to the officer's return from the mission,

ii) all expenses related to additional out-of-Canada health insurance premiums purchased by the officer.

iii) all expenses incurred in acquiring an international driving permit and passport.

[10]. The officer is to wear the uniform of his/her municipal police organization while working in XXXXX and is to continue to comply with the code of ethics of his/her home organization and will remain subject to the home organization's internal discipline regime.

[11]. The RCMP will supply allowances to the officer as follows: Allowance for Service Abroad: XXXXX[.] The RCMP is solely responsible for the allowances.

[12]. Personal holidays will be given to the officer in accordance with the rules applicable to the Canadian contingent of XXXXX mission.

Interpretation Requested

Confirmation of the application of the Goods and Services Tax (GST) to the supply of the services of the police officer by the municipality when made under the above conditions.

Interpretation Given

Section 142 of the Excise Tax Act (ETA) states, in part, that a supply is made in Canada where the supply is performed in whole or in part in Canada. As stated above, training is provided to the officers in Canada prior to departing for XXXXX[.] Where the officers are operating under the auspices of the RCMP in Canada, either by attending training sessions or performing any duties in Canada, the entire service, for GST/HST purposes, is provided in Canada including the portion of the service supplied in XXXXX[.]

The supplies being made are law enforcement services. Paragraph 20(g) of Part VI of Schedule V to the Excise Tax Act provides an exempt GST/HST status for the supply made by a government or municipality or by a board, commission or other body established by a government or municipality of a law enforcement service or a fire protection service when made to a government or a municipality or to a board, commission or other body established by a government or municipality. The RCMP, as part of the federal crown entity are, for purposes of paragraph 20(g), a recipient who may receive law enforcement services on an exempt basis. Based on the facts set out above, it is our interpretation that the supply to the RCMP is exempt of the GST/HST under paragraph 20(g) of Part VI of Schedule V to the ETA.

The foregoing comments represent our general views with respect to the subject matter of your letter. Proposed amendments to the Excise Tax Act, if enacted, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST/HST Memoranda Series, do not bind the Department with respect to a particular situation.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-9590.

Yours truly,

Ken Syer
Senior Rulings Officer
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
GST/HST Rulings and Interpretations Directorate