13 March 2000 GST/HST Interpretation 13401 - Fire Fighting Training Services

Dear Sir:

I refer to your letter dated November 1, 1999, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the operations of a non-profit organization providing fire fighting training to volunteer fire organizations.

As of November 1, 1999, Revenue Canada became the Canada Customs and Revenue Agency (CCRA).

It is our understanding that the non-profit organization, the volunteer agency, was created by volunteer fire organizations to coordinate training, instruction and similar services to the members of volunteer fire organizations. The volunteer agency invoices the volunteer fire organizations a service fee for the training services. The service fee is based on the actual time required to supply the training. The volunteer agency does not receive government funding.

Interpretation Requested

The training services supplied by the volunteer agency to the volunteer fire organizations will be an exempt supply under Part VI of Schedule V to the Excise Tax Act (the Act) and the agency will be entitled to claim the 57.14% municipal rebate.

Interpretation Given

Paragraph 20(g) of Part VI of Schedule V to the Act provides for an exempt supply of a law enforcement or fire protection service made by a government, municipality or board, commission or other body established by a government or municipality when made to a government or municipality, or board, commission or other body established by a municipality or government.

Under paragraph (b) of the definition of municipality in subsection 123(1) of the Act, the Minister of National Revenue may determine local authorities including volunteer fire organizations to be a municipality for the purposes of this Part. The Minister may determine a volunteer fire organization to be a municipality for the purposes of the Act, but only where these organizations provide fire protection services. In order to qualify for determination as a municipality (volunteer fire organization category) the volunteer agency must meet the following criteria: the organization must be providing a fire protection service in a municipality, a local service district or any other geographic area within a province or territory. Training provided by the volunteer agency is not considered to be a fire protection service. The volunteer agency does not qualify to be determined as a municipality pursuant to subsection 123(1) in that its services are not fire protection services. The status of municipality under the category volunteer fire organization cannot be given to the volunteer agency and as a consequence, the agency's services are not exempt under section 21 or paragraph 20(g) of Part VI of Schedule V to the Act. The agency is not entitled to the 57.14% municipal rebate.

However, where the volunteer fire organizations who established the volunteer agency have been determined to be municipalities under subsection 123(1) under the category of fire protection organizations as explained above, and the volunteer fire organizations either own or control the volunteer agency, the volunteer agency may qualify as a determined municipality under the category of para-municipal body. If the volunteer agency qualifies as a para-municipal body of the volunteer fire organizations, the exempting provisions of section 21, paragraph 20(g) or paragraph 28(a) of Part VI of Schedule V to the Act may apply. Technical Information Bulletin B-046 outlining the criteria for ownership or control is enclosed for your reference. All requests for municipal determination are handled at this office and should be sent to the attention of the Director, Public Service Bodies and Governments, 14th floor, Tower A, Place de Ville, 320 Queen Street, Ottawa, ON K1A 0L5.

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 contact Mr. Owen Newell, Manager, Municipalities and Health Care Services at (613) 941-3268.

Yours truly,

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

Encl.