IWK Health – Tax Court of Canada finds that employers could not claim HST on the reimbursed health care expenses of their employees

Some Nova Scotia hospitals reimbursed (through a health care plan administrator) their employees for the employees’ costs including HST of acupuncture, massage therapy, naturopathy, or homeopathy services. The hospitals took the position that they were deemed by s. 175 to have received those care services themselves, and claimed public service body (PSB) rebates accordingly.

Wong J essentially followed Westcoast Energy in rejecting this position, stating that those services were “of a particularly personal and individual nature” and that she would expect the employees “to access these types of services on their personal time.” Accordingly, these services did not satisfy the s. 175 test of being “for consumption or use … in relation to activities” of the hospitals.

Neal Armstrong. Summary of IWK Health Centre v. The King, 2025 TCC 44 under ETA s. 175(1).