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: 245071
Business Number: […]
Dear [Client]:
Subject: GST/HST RULING
Application of HST to prenatal classes
Thank you for your correspondence of [mm/dd/yyyy], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to prenatal classes.
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. You are a Registered Nurse registered in […][Province X].
2. You are registered for the GST/HST under the name […] since [mm/dd/yyyy] with the GST/HST account [#].
3. You teach in-person and online prenatal classes and are actively involved in preparing and presenting the classes.
In-person and online classes are very similar. The in-person classes are [#]-weeks long and done in a group setting where [#] participants attend. In-person classes are only offered to residents of [Province X]. The in-person classes allow you to demonstrate various techniques to the individual participants, for example, the different positions for labour techniques.
4. The online classes have on average [#] individuals signed on for the weekly live classes. The online classes are only open to Canadian residents and while the majority of individuals are within [Province X], some participants are from other […] provinces.
5. The classes are not covered under the [Province X] health care plan.
6. […]
7. You provided a letter from the Nurses Association of [Province X] (the Association) dated [mm/dd/yyyy], that confirms that the Association recognizes all hours of practice related to course development, instructing the classes, individual client counseling and supervising staff engaged in course development and service delivery in assessing whether you meet the practice hours requirement for your annual renewal.
8. You also provided extracts from the Canadian Nursing Association Framework for the Practice of Registered Nurses in Canada that shows that education is part of the areas of practice of the profession of nursing.
9. […][Quote from the provincial association about the nurse-client relationship] .
10. […].
RULING REQUESTED
You would like to know if your supplies of in-person and online prenatal classes are exempt services for purposes of the GST/HST.
RULING GIVEN
Based on the facts set out above, we rule that your supply of in-person and online prenatal classes are subject to the GST/HST.
EXPLANATION
Generally, most supplies of property and services made in Canada are taxable for GST/HST purposes, unless they are exempt supplies. Exempt supplies are listed in Schedule V to the ETA. Part II of Schedule V provides that certain health care services are exempt from GST/HST.
In order for a supply of property or a service to be exempt from GST/HST under Part II of Schedule V, a specific exempting provision included in Part II must apply to that particular supply.
Section 6 of Part II of Schedule V
Section 6 of Part II of Schedule V exempts a supply of a nursing service by a registered nurse, a registered nursing assistant, a licensed or registered practical nurse or a registered psychiatric nurse, if the service is rendered to an individual within a nurse-patient relationship.
Given the preceding, there are three criteria that the supply must meet to be exempt; It must be a service that:
1. is rendered by a registered nurse, a registered nursing assistant, a licensed or registered practical nurse, or a registered psychiatric nurse;
2. is a nursing service;
3. is rendered to an individual within a nurse-patient relationship.
The GST/HST is a transactional tax and as such, the exempting provisions in Part II of Schedule V apply on a supply-by-supply basis. These provisions set out specific criteria that must be met in order for a particular supply of a service to fall within those provisions. For every supply or transaction, the supplier must determine whether these criteria are met or whether the tax is applicable. Thus, regardless of the manner in which nursing services may be defined, the tax status of a particular supply of nursing services will be conditional on whether the supply meets all of the criteria set out in the exempting provision, as explained below.
1. Rendered by a registered or licensed nurse
You are a registered nurse in [Province X] and you therefore meet this criteria.
2. Scope of nursing services
a. Nursing services are generally understood to be the provision of care for, and the treatment of the health conditions of, a patient where the care and treatment services are performed by registered or licensed nurses. These are supportive, preventive, therapeutic, palliative and rehabilitative services that are rendered to assist the patient in attaining or maintaining optimal function.
b. In determining the scope of nursing services we also consider the scope of nursing services to include the diagnosis and treatment of health problems, assessment of a patient’s nursing needs, the preparation of nursing care plans for the patient and the manner in which the nursing profession is regulated by provincial laws. You mentioned in your letter that the Association recognizes hours of practice related to course development, instructing the classes, individual client counseling, supervising staff engaged in the course development and service delivery in assessing whether you meet the practice hours requirement for your annual renewal. You also provided extracts from the Canadian Nursing Association Framework for the Practice of Registered Nurses in Canada that shows that education is part of the areas of practice of the profession of nursing.
Training or teaching services can therefore be considered within the scope of nursing services.
3. Rendered to an individual within a nurse-patient relationship
a. Even where an activity falls into the practice of nursing, as noted above, the activity will not be an exempt supply for purposes of section 6 of Part II of Schedule V where it does not constitute a nursing service rendered to an individual within a nurse-patient relationship.
b. A registered or licensed nurse establishes and maintains a nurse-patient relationship by using nursing knowledge and skills to render patient care services involving supportive, therapeutic, palliative and rehabilitative services to assist the patient in attaining or maintaining optimal function, such as treating the health problems of a patient, administering medications and performing other interventions. We interpret the phrase “rendered within a nurse-patient relationship” to mean nursing services that involve personal interaction between a nurse and an individual who is a patient where there is an established or ongoing relationship between the nurse and the patient and the nurse is a direct care provider of the patient.
c. […]
d. […][Publicly available information] indicates: […] [that an individual’s participation in these online and in-person prenatal classes does not constitute a nurse-patient relationship […].
Accordingly, we can not conclude that the classes you are providing are rendered within a nurse-patient relationship. The supply of the classes are therefore subject to the GST/HST.
DISCLAIMER
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 438-304-4971. 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,
Robert Demers
Industry Sector Specialist
Health Care Sectors
Public Sector Bodies and Governments
GST/HST Rulings Directorate
Email this Content