22 July 2002 GST/HST Interpretation 38492 - Application of GST/HST to a Church Sponsored Christian Camp

Dear XXXXX:

Thank you for your letter of XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the operations of a church-sponsored Christian camp that promotes Christian values and lifestyle. We apologize for the delay in our response.

We understand from your letter and our telephone conversation of XXXXX, that your client is a registered charity that operates an overnight camp for children in XXXXX. The charity offers a series of supervised activities involving athletics, outdoor recreation, arts, crafts, and other hobbies, primarily to children 14 years of age and under. During their weeklong stay, the children must attend bible reading twice a day.

The charity also offers weekend retreats to adults. The retreats include socializing and various recreational activities in addition to religious activities. The charity is registered for GST/HST purposes and collects HST on these retreats for adults.

The charity also rents campsites to other organizations. The charity has collected and remitted HST on these rentals. The charity has not filed an election under section 211 of the Excise Tax Act (ETA) so as to treat its otherwise exempt supplies of certain real property as taxable supplies.

Annual revenues from the camp operations amount to approximately XXXXX. The charity also receives about XXXXX a year in donations.

Interpretation Requested

Is the supply of the children's overnight camp program subject to HST?

Interpretation Given

Generally, any supply made by a charity is exempt unless specifically excluded from exemption. Paragraph 1(f) of Part V.1 of Schedule V to the ETA excludes from the general exemption a service involving supervision or instruction in any recreational or athletic activity. The two exceptions to this exclusion (i.e., the services remain exempt) are where the services are provided primarily to children 14 years of age or under and the services do not involve overnight supervision throughout a substantial portion of the program, or, where the services are intended to be provided primarily to individuals who are underprivileged or who have a disability. Therefore, although it may also involve other elements such as bible reading, an overnight program for children that involves supervision or instruction in any recreational activities will be taxable.

We would like to point out that paragraph 1(l) of Part V.1 of Schedule V to the ETA was amended in 2001 to clarify that all supplies by a charity of real property by way of lease, licence or similar arrangement fall within the general exemption. The amendment applies to supplies for which consideration became due after 1996 or was paid after 1996 without having become due unless the charity treated the supply as taxable on or before October 4, 2000. Thus, the rental by a charity of real property such as a campsite is generally exempt. Charities using the net tax calculation for charities are required to include in their net tax 100% of any tax collected in error. A charity may, if it wishes, file an election under section 211 of the ETA with respect to certain real property so that otherwise exempt supplies of the property become taxable.

The foregoing comments represent our general views with respect to the subject matter of your letter. Proposed amendments to the ETA, 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 Canada Customs and Revenue Agency 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) 952-9592.

Yours truly,

Helena Ingr
Charities, NPOs and Educational Services Unit
PSBs and Governments Division
Excise and GST/HST Rulings Directorate