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.
GST/HST Rulings Directorate
Place de Ville, Tower A, 5th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 196193
Dear [Client]:
Subject: GST/HST RULING
Home Care Services
Thank you for your correspondence of [mm/dd/yyyy], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to services provided to […][X]. We apologize for the delay in this response.
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. [X], resides at […][the Centre] in […], Ontario.
2. The Centre is a government funded long-term care facility.
3. [X] requires more services than are provided at the Centre. External services providers were hired to provide personal care services including behaviour management, personal care and companionship.
4. The extra personal care services were first provided by […][ the Charity], a registered charity for purposes of the Income Tax Act and therefore a charity for purposes of the GST/HST. The Charity did not charge GST/HST on the services.
5. When […][the Service Provider] began providing the personal care services GST/HST was charged. The Service Provider is not a registered charity for purposes of the Income Tax Act and therefore not a charity for purposes of the GST/HST.
6. The pamphlet for the Service Provider lists the services that it provides. Companionship is listed in the Social/Community Support section. The services listed in this section are companionship, assistance to leisure settings and medical/personal appointments, recreational activities, mental stimulation activities, exercise programs and shopping.
7. The invoices issued by the Charity described the services as personal support. The Service Provider described the services on their invoices as companionship.
8. You indicated that the Service Provider provides more than just companion services, that they provide personal care, behaviour management, oral care and feeding. The log book entries from the service providers indicate that they assisted [X] with feeding, toileting, bathing, grooming/nail care, oral care, changing/dressing, recreational activities, and brought [X] on walks.
9. [The Centre] and the […][LHIN] have a […][agreement] for the LHIN to provide funding for the provision of services at the Centre. This agreement provides for the provision of accommodation, nursing and personal care, program and support services, meals and services related to the operation of the home such as housekeeping and laundry services.
RULING REQUESTED
You would like to know if the services provided to [X] by the Service Provider are exempt home care services as described in Info Sheet GI-166 Application of the GST/HST to Home Care Services (GI-166).
RULING GIVEN
Based on the facts set out above, we rule that the services supplied by the Service Provider are not exempt from the GST/HST. Accordingly, the fees for the services are subject to the GST/HST.
EXPLANATION
Generally, all supplies of property and services made in Canada are taxable unless an exemption from the GST/HST applies. Taxable supplies are supplies made in the course of a commercial activity and may be taxable at the rate of 0% (zero-rated supplies), 5%, 13%, or 15% on the value of the consideration for the supply depending on the province in which the supply is made. Zero-rated supplies are included in Schedule VI. Exempt supplies are not subject to the GST/HST and are included in Schedule V.
Certain health care services are exempt from the GST/HST. Specifically, a supply of a home care service that is rendered to an individual in the individual's place of residence, whether the recipient of the supply is the individual or any other person, is exempt if
(a) the supplier is a government or municipality;
(b) a government, municipality or organization administering a government or municipal program in respect of home care services pays an amount
(i.) to the supplier in respect of the supply, or
(ii.) to any person for the purpose of the acquisition of the service; or
(c) another supply of a home care service rendered to the individual is made in the circumstances described in paragraph (a) or (b). (Footnote 1)
For GST/HST purposes the term “home care service” is defined as “a household or personal care service, such as bathing feeding, assistance with dressing or medication, cleaning, laundering, meal preparation, and child care, if the service is rendered to an individual who, due to age, infirmity or disability, requires assistance”.
In your letter, you note that GI-166 states:
In many cases, an individual receiving a publicly funded home care service requires additional home care services to meet his or her needs. If an individual purchases a home care service in addition to receiving a publicly funded home care service, the additional home care service purchased is exempt if the following conditions are met:
- the additional service is a home care service rendered to the individual in his or her place of residence; and
- the individual is concurrently receiving a publicly funded home care service.
You also stated that your believed that this […][applies to services received by X because] she receives government funded long-term care and needed to purchase additional home care services. This scenario, as described in GI-166, is a reference to paragraph (c) above.
Paragraph (c) exempts a supply of an additional home care service rendered to an individual in their place of residence where the individual is concurrently receiving a publicly funded home care service. Therefore, in the case at hand, the following conditions must be met:
- the services provided by the Service Provider would have to be home care services, and
- the services rendered to [X] by the Centre would have to be a supply of publicly funded home care services.
The services provided by the Service Provider were described as companionship on the invoices. However, the log entries by the service providers indicated that the services provided were more than simple companionship. The Service Provider rendered services of assistance with feeding, toileting, bathing, grooming/nail care, oral care, and changing/dressing as well as recreational activities. It is our opinion that the services provided to [X] by the Service Provider are home care services for GST/HST purposes.
As the services provided by the Service Provider are home care services, in order for the conditions in paragraph (c) to be met the supply rendered to [X] by the Centre would have to be a supply of publicly funded home care services.
The [agreement] between the [LHIN] and [the Centre] requires the Centre to provide services which include the operation of the licensed beds and the home which includes the residents’ rooms and common areas and elements. As part of this agreement the Centre is required to provide the residents with accommodation, meals, nursing care, personal care, program and support services as well as other goods and services that are provided to the residents to meet the legislative and funding requirements.
While the supply made by the Centre may include elements that are home care services, the supply also includes accommodation, meals and nursing services. The supply made by the Centre is beyond the scope of the definition of “home care service”. Therefore, the supply rendered to [X] at the Centre is not a supply of publicly funded home care services.
As the supply made by the Centre is not a supply of publicly funded home care services the conditions of paragraph (c) are not met and the supply made by the Service Provider is not exempt.
In your letter you expressed concern that the GST/HST was charged by the Service Provider and not by the Charity. Generally, supplies made by a charity are exempt from the GST/HST . For more information regarding the tax status of supplies by a charity please refer to Guide RC4082, GST/HST Information for Charities.
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 343-573-6076. Should you have additional questions on the interpretation and application of the GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Sincerely,
Art Blommesteijn
Industry Sector Specialist
Health Care Sectors
Public Service Bodies and Governments Division
GST/HST Rulings Directorate
FOOTNOTES
1 Section 13 of Part II of Schedule V to the ETA
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