Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 5th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 205713
Business Number: […]
Attention: […]
Dear [Client]:
Subject: GST/HST RULING
Fire and emergency services provided by the fire department
We are replying to the fax of [mm/dd/yyyy] from […], and our subsequent conversations, concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to services provided by the Town […] Fire Department.
We apologize for the delay in responding.
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
We understand the following:
1. The Corporation of the Town […] (Town) is a municipality as defined in subsection 123(1) and is registered for GST/HST purposes.
2. […] (Fire Department) is a department of the Town that provides a variety of services to the residents of the Town, as well as emergency services for individuals who travel through the municipality. The costs to provide these services are typically funded from municipal taxes paid by property owners. However, the Town charges fees for specific services provided by the Fire Department, as listed under the Town’s […] By-law [X].
Motor vehicle accidents
3. The Fire Department provides rescue and emergency services at motor vehicle accident scenes. […], the Fire Department charges a service fee that applies to motor vehicle collisions on municipal roads ([…]) that involve non-residents who are deemed by police to be ‘at fault’. A non-resident means a person who does not reside and pay property tax to the Town.
4. By-law [X] lists the [applicable] fees and charges […]. The maximum chargeable rate […][for] non-resident and fault known per vehicle [is] [$A] for the first hour or part thereof and [$B for each additional one-half hour] [plus the actual costs] for consumables used i.e. All-purpose absorbent material, firefighting foam, medical supplies etc […][and other actual costs].
5. Determining ‘at fault’ is achieved through accessing the Ministry of Transportation (MTO) –Authorized Requester Information Services (ARIS) program which maintains records for drivers and their vehicles under the Highway Traffic Act. The MTO charges the Town a fee of approximately $15 per licence plate inquiry. The Town in turn charges a $15 ARIS search fee to the non-resident to offset the cost of the MTO-ARIS search expenses.
6. The Fire Department’s administrative staff will identify motor vehicle collision incidents that meet the threshold for cost recovery under the service fee. The Town’s Finance Department issues the invoice and collects the fees.
Fire safety plans
7. Fire Safety Plans are required to be completed a detailed document designed to deal with all aspects of fire safety relating to a specific building or property. The document is intended to be a reference manual outlining the fire safety practices to be routinely used, and includes, emergency procedures in case of fire, training staff and occupants regarding fire safety in the building, holding of fire drills and drill procedures, maintenance of building facilities for safety of occupants, and control of fire hazards in the building.
8. Under Ontario Regulation 213/07, a Fire Safety Plan is required to be prepared and must be approved by the Municipal Fire Chief or a member or members of the fire department appointed by the Municipal Fire Chief or Chief Fire Official.
9. When a Fire Safety Plan is submitted for review and approval, the Fire Department will conduct a formal review. If the review identifies that the Fire Safety Plan requires additional revisions, the Fire Prevention Inspector will contact the applicant and advise of the concerns with the Fire Safety Plan and provide options for its completion (make changes, hire a consultant to assist in its completion, etc.). The applicant is advised that moving forward there will be a fee of $[…], as listed under By-law [X].
Propane storage and handling
10. Under subsection 27.1(1) of Ontario Regulation 211/01:Propane Storage and Handling, under the Technical Standards and Safety Act, 2000, S.O. 2000, c.16, a facility that is a retail outlet, filling plant, cardlock/keylock, private outlet or container refill centre must be licenced. The Technical Standards and Safety Association (TSSA) is responsible for licencing facilities.
11. A facility that requires a Level 2 licence also requires approval from the fire service responsible for the area where the facility is located. The approval of the fire service shall indicate that the fire service has approved all components of the Level 2 risk and safety management plan that address fire safety, fire protection and emergency preparedness.
12. By-law [X] lists the user fees and charges for the review and approval of propane risk and safety management plans.[…].
RULINGS REQUESTED
You would like to know whether the fees for the following services are subject to the HST:
1. Emergency and rescue services for motor vehicle collisions on municipal roads provided to an individual that is not a resident of and does not pay property tax to the Town.
2. The review and approval of Fire Safety Plans.
3. The review and approval of propane risk and safety management plans.
RULINGS GIVEN
Based on the facts set out above, we rule that:
1. The emergency and rescue services for motor vehicle collisions on municipal roads provided by the Town to an individual that is not an owner or occupant of real property in the Town is a taxable supply. The fees, actual costs and the ARIS fee all form part of the consideration for the supply and are subject to the GST/HST.
2. The review and approval of Fire Safety Plans and propane risk and safety management plans by the Town to a government or a municipality or a board, commission or other body established by a government or municipality is exempt under paragraph 20(g) of Part VI of Schedule V.
3. The review and approval of Fire Safety Plans and propane risk and safety management plans by the Town to a person that is not a government or a municipality or a board, commission or other body established by a government or municipality is a taxable supply. Accordingly, the fees for the services are subject to the GST/HST.
EXPLANATION
Generally, every recipient of a taxable supply (other than a zero-rated supply) is required to pay GST/HST on the value of the consideration for the supply. An exempt supply is a supply that is not subject to GST/HST and that is included in Schedule V. Certain supplies made by a municipality are exempt under Part VI of Schedule V.
Supplies made to a government or municipality or a board, commission or other body established by a government or municipality
Paragraph 20(g) of Part VI of Schedule V exempts the supply of fire protection services made by a municipality to a government or a municipality or a board, commission or other body established by a government or municipality. For GST/HST purposes “government” means Her Majesty in right of Canada or a province.
All the services described above provided by the Fire Department are fire protection services and the supply of the services by the Town are exempt when made to a government or municipality or a board, commission or other body established by a government or municipality, under paragraph 20(g) of Part VI of Schedule V.
Supplies made to a person who is not a government or municipality or a board, commission or other body established by a government or municipality
Fire protection services provided by the Town that are not made to a government or a municipality or a board, commission or other body established by a government or municipality may be an exempt supply of municipal services under section 21 of Part VI of Schedule V, where all the criteria in that section are met. This section exempts a supply of a municipal service, if
(a) the supply is
(i) made by a government or municipality to a recipient1 that is an owner or occupant of real property situated in a particular geographic area, or
(ii) made on behalf of a government or municipality to a recipient that is an owner or occupant of real property situated in a particular geographic area and that is not the government or municipality;
(b) the service is
(i) one which the owner or occupant has no option but to receive, or
(ii) supplied because of a failure by the owner or occupant to comply with an obligation imposed under a law; and
(c) the service is not one of testing or inspecting any property for the purpose of verifying or certifying that the property meets particular standards of quality or is suitable for consumption, use or supply in a particular manner.
The Town’s supply of rescue and emergency services for motor vehicle collisions on municipal roads is a non-optional municipal service. However, paragraph (a) requires that the supply be made to a recipient that is an owner or occupant of real property in the Town. Where the supply is made to a person that is not an owner or occupant of real property in the Town, the supply is not exempt under section 21. As there is no other exempting provision that applies, the supply by the Town of the rescue and emergency services to a person that is not an owner or occupant of real property in the Town is a taxable supply. In addition, the fees, actual costs and the ARIS fee are all part of the consideration for the supply that is subject to the GST/HST.
The review and approval of Fire Safety Plans and propane risk and safety management plans are non-optional municipal services made to an owner or occupant of real property situated in the Town. However, the services are to verify or certify that the building, facility or property meet the required specifications and standards for occupancy or use. Accordingly, the review and approval services do not meet the conditions of paragraph (c) and therefore cannot be exempt under section 21.
In addition, paragraph 146(a) deems a supply (that is not an exempt supply) made by a municipality of testing or inspecting any property for the purpose of verifying or certifying that the property meets particular standards of quality or is suitable for consumption, use or supply in a particular manner to be made in the course of a commercial activity.
Therefore, the services of reviewing and approving Fire Safety Plans and propane risk and safety management plans are deemed to be made in the course of a commercial activity. Accordingly, the fees for the services are subject to the GST/HST.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) is bound by the ruling(s) given in this letter provided that: none of the issues discussed in the ruling(s) are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 289-257-6196. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Maria Forte-Long
Municipal Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
1 Subsection 123(1) defines the term “recipient” to generally mean the person who is liable to pay the consideration for the supply.
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