21 July 2003 GST/HST Interpretation 41382 - Minor Hockey Program

Dear XXXXX

Thank you for the letter XXXXX (with attachments), concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to certain supplies made by the XXXXX (the Association). During the course of our most recent conversation XXXXX with XXXXX stated XXXXX intention to submit in writing his argument against our position. We have had no further communication from him.

We apologize for the delay in our response.

We understand from your letter, our telephone conversations and the information found on the Association's website that:

•   The Association is a non-profit provincial sport-governing body that oversees community-based minor hockey programs throughout a designated geographic region XXXXX.

•   The Association is a non-profit organization, as that term is defined in subsection 123(1) of the Excise Tax Act (the ETA).

•   The minor hockey associations (the Locals) in the designated region are members of the Association.

•   The Association is a member of the XXXXX (the Branch), which is in turn a member of the XXXXX (the National Association).

•   The Locals provide a wide array of hockey opportunities for residents of the cities, towns, villages and municipalities they serve.

•   The right of a player to play for his/her Local is protected through the regulations of the National Association, the Branch and the Association.

•   As indicated in its constitution, the Association's first objective is to promote, encourage, govern, organize, co-ordinate and develop minor hockey programs for all ages up to and including the Juvenile age division for players in the Association's designated region.

•   According to the Association's Mission Statement, the Locals provide a wide array of hockey opportunities for minor players at all skill levels. Most Locals provide a representative team program, a local or house league program and, when possible, select team programs for players.

•   Skills development programs, including the XXXXX are major facets of player skills development initiatives within the Association.

•   In order to fulfill its objectives, the Association administers the XXXXX which consists of organized regular season hockey play in local, house or select leagues; play downs that follow the regular season for the same; appeals of suspensions, fines, etc. which occur throughout the season; and sanctioned tournaments for various league and team play.

•   The league programs are provided to the players by the Locals.

•   The Association provides certification programs for all coaches, trainers and referees.

•   The Association has determined that the XXXXX is provided primarily (more than 50%) to children 14 years of age and under.

•   Membership includes liability and accident insurance, taken out by the Branch, for the individuals.

•   The teams also pay team registration fees, house league fees, play down fees and appeal fees to the Association.

We are unable to provide a ruling as to the tax status of the supply of the XXXXX made by the Association. Pursuant to section 1.4 of the GST/HST Memoranda Series [copy enclosed], the Canada Customs and Revenue Agency (the CCRA) can only issue a ruling where clearly defined facts are established. As the facts cannot be fully ascertained with regards to the supply of the XXXXX, we are pleased to provide you with an interpretation on this issue.

Interpretation Requested

Are supplies made by the Association relating to the XXXXX exempt from GST pursuant to section 12 of Part VI of Schedule V to the ETA?

Interpretation Given

Determining whether the Association supplies one or more programs is a question of fact. The Association has not demonstrated the existence of a program in relation to the XXXXX. It is unclear if the XXXXX is one program or representative of a grouping of several programs and, moreover, who is supplying the program(s). If there are supplies of several separate programs, each supply will have to meet the requirements of section 12 of Part VI of Schedule V to the ETA in order for the supply to be exempt.

Section 12 of Part VI of Schedule V to the ETA exempts, in part, supplies made by a public sector body (PSB) of membership in, or services supplied as part of, a program established and operated by the PSB where:

•   the program consists of a series of supervised instructional classes or activities involving athletics or other recreational activities;

•   it may reasonably be expected, given the nature of the classes or activities or the degree of relevant skill or ability required for participation in them that the program will be provided primarily to children 14 years of age or under, and

•   the program does not involve overnight supervision throughout a substantial portion of the program.

However, before deciding whether there are one or more programs, it must be determined who the supplier of the program or programs is. As indicated above, the exemption under section 12 is restricted to programs established and operated by the PSB itself. In other words, the exemption applies only where the PSB itself directly supplies to the players a program that consists of supervised instructional classes or activities involving athletics or other recreational activities. Where the PSB issuing memberships or services does not directly supply the program of instructional classes or activities, the supply will not be exempt under this provision, as would be the case where the PSB provides only an administrative service in respect of the programs.

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 CCRA 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