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This version replaces the one dated May 2010.
This memorandum explains the application of Part IX of the Excise Tax Act to taxable supplies made by or to provincial and territorial governments, including their Crown corporations, boards, commissions and agencies that are agents of the Crown. In particular, it focuses on how provincial or territorial entities may be registered for GST/HST purposes, their eligibility for relief from the GST/HST on taxable purchases, and the documentary requirements for vendors that make taxable supplies to provincial or territorial entities that are entitled to point-of-purchase relief from the GST/HST.
In this publication, all legislative references to the “Act” are to the Excise Tax Act, unless otherwise specified. The information in this publication does not replace the law found in the Act and its regulations.
If this information does not completely address your particular situation, you may wish to refer to the Act or relevant regulation, or call GST/HST Rulings at 1-800-959-8287 for additional information. If you require certainty with respect to any particular GST/HST matter, you may request a ruling. GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, explains how to obtain a ruling or an interpretation and lists the GST/HST rulings centres.
If you are located in Quebec and wish to request a ruling related to the GST/HST, please call Revenu Québec at 1-800-567-4692. You may also visit the Revenu Québec website at revenuquebec.ca to obtain general information.
For listed financial institutions that are selected listed financial institutions (SLFIs) for GST/HST or Quebec sales tax (QST) purposes or both, whether or not they are located in Quebec, the CRA administers the GST/HST and the QST. If you wish to make a technical GST/HST or QST enquiry related to SLFIs, please call 1-855-666-5166.
Reference in this publication is made to supplies that are subject to the GST or the HST. 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%. If you are uncertain as to whether a supply is made in a participating province, see GST/HST Technical Information Bulletin B-103, Harmonized Sales Tax – Place of Supply Rules for Determining Whether a Supply is Made in a Province.
On this page
- Meaning of significant terms
- Provincial governments as a supplier
- Supplies of property and services made by provincial government entities
- Supplies of property and services made to provincial government entities
- Documentation for supplies made to listed entities entitled to point-of-purchase relief
- Supplies made to employees of listed entities entitled to point-of-purchase relief
1. Provincial governments (including departments/ministries, agencies, boards, commissions and Crown corporations that are Crown agents) supply and acquire a wide range of property and services. Determining the proper application of the GST/HST to supplies of property or services made or acquired by a provincial government and its entities include the following steps:
- determining whether a single or multiple supplies are made
- characterizing the supply
- determining the legal status of the entity making or acquiring the supply
- considering the application of certain provisions of the Act that are applicable to provincial government entities
- determing the tax relief to which the government entity may be entitled
Meaning of significant terms
2. The term government is defined in subsection 123(1) of the Act as “…Her Majesty in right of Canada or a province”. Government includes departments, ministries and Crown agents. For purposes of the Act, a provincial government includes the governments of Northwest Territories, Yukon Territory and Nunavut.
Note: A municipality is not a government for purposes of the GST/HST.
3. A Crown agent of Her Majesty in right of a province is a person who is an agent of a provincial government for all purposes.
4. A Reciprocal Taxation Agreement (RTA) is an agreement negotiated between the federal and provincial finance ministers with respect to the payment of certain of each other’s taxes and fees, pursuant to section 32 of the Federal-Provincial Fiscal Arrangements Act. In particular, an RTA defines the obligations of federal government entities to pay, collect, report and remit specified provincial taxes, as well as the obligations of provincial government entities to pay, collect, report and remit specified federal taxes. An RTA also includes a Schedule A, which lists provincial entities that are entitled to relief from the GST/HST either at the point of purchase or through a pay-and-rebate mechanism. All of the provinces and territories except New Brunswick and Alberta have signed RTAs.
5. Listed entity means, for the purposes of this memorandum, a provincial or territorial government department/ministry, Crown corporation, board, commission or agency that is specifically named in a list of Crown agents either listed in Schedule A to an RTA or provided to the Canada Revenue Agency (CRA) by the province in circumstances in which the province is not a signatory to an RTA (as is the case for New Brunswick and Alberta).
6. Non-participating province means Quebec, Manitoba, British Columbia, Saskatchewan, Alberta, the Northwest Territories, Yukon and Nunavut. Note that British Columbia was a participating province from July 1, 2010, until March 31, 2013.
7. Participating province is a province that has harmonized its provincial sales tax with the GST to implement the HST. The participating provinces include New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario and Prince Edward Island, but do not include the Nova Scotia offshore area or the Newfoundland offshore area except to the extent that offshore activities, as defined in subsection 123(1) of the Act, are carried on in that area.
8. Provincial/territorial government entity means, for the purposes of this memorandum, a provincial or territorial entity that would be included in the definition of government for purposes of the Act.
9. Public sector body means a government, charity, non-profit organization, municipality, university, public college, school authority or hospital authority.
Provincial governments as a supplier
10. Paragraph 122(b) of the Act binds Her Majesty in right of a province in respect of obligations as a supplier to collect and to remit tax in respect of taxable supplies it makes. As a result, all provincial/territorial governments and their Crown agents are generally subject to the provisions of the Act that apply to suppliers, including the obligation to register, charge and collect the GST/HST on taxable supplies, file GST/HST returns and remit net tax to the CRA.
11. Generally, each provincial/territorial government, including all of its departments/ministries and some of its agencies, boards and commissions, has registered for GST/HST purposes under a single Business Number (BN) with various filing branches/divisions. All the provincial/territorial government entities under the particular BN for a province/territory collectively form the provincial/territorial government registrant. Other provincial/territorial government entities may be registered under a different BN from the provincial/territorial government registrant.
12. Transactions between entities that are branches/divisions of the same provincial/territorial government registrant are not treated as supplies for purposes of the GST/HST. Therefore, the provision of property or services between those entities within a provincial/territorial government registrant is not subject to the GST/HST.
13. Crown corporations, and certain boards, commissions and agencies involved predominantly in commercial activities that are not registered for GST/HST under a BN of a provincial or territorial government are required to register separately for GST/HST purposes and are generally subject to all the provisions in the Act that apply to registrants.
Supplies of property and services made by provincial government entities
14. Provincial and territorial governments, including their Crown agents, provide various types of property and services in the course of fulfilling their mandates and responsibilities. Under the Act, some of these supplies are taxable and some are exempt.
15. A provincial or territorial government entity is generally required to collect and remit the GST/HST on its taxable (other than zero-rated) supplies of property and services made in Canada.
16. There are specific provisions in the Act that apply to exempt certain supplies made by a government. For example, a number of provisions listed in Part VI of Schedule V to the Act that exempt certain supplies by public sector bodies apply to such supplies when made by a government, such as section 10 of Part VI of Schedule V to the Act, which exempts a supply made by a government of property, like a brochure, or services, such as training, where at least 90% of the brochures or training are provided for free.
17. In addition, section 20 of Part VI of Schedule V lists a number of supplies of an administrative or regulatory nature that are exempt supplies when made by, among others, a government or a body established by a government. Such supplies by a provincial or territorial government would include the supply of a driver’s licence or a birth certificate or the registration of a mortgage in a property registration system.
18. Section 146 deems certain listed supplies made for consideration by a government, or a body established by a government, among others, to be made in the course of a commercial activity unless the supply is specifically exempt from the GST/HST under another provision of the Act. Examples of such supplies when made for consideration would include a supply by a government of a service of inspecting property, such as a building or an elevator, to verify that it meets particular standards of quality; a supply by a government to a consumer of a hunting or fishing licence; or a supply by a government of a right to enter a provincial or territorial park.
19. For additional information on which types of entity will qualify as an other body established by a government for purposes of the Act, refer to GST/HST Policy Statement P-247, What constitutes an “other body established by government” for purposes of the Excise Tax Act (the Act).
Supplies of property and services made to provincial government entities
20. Although the GST/HST may be payable in respect of their purchases, provincial and territorial governments and their Crown agents are not bound as purchasers by the provisions of the Act pursuant to section 122.
21. All provinces and territories other than New Brunswick and Alberta have entered into RTAs in which they have, among other things, negotiated how the particular province or territory (and its listed entities) will receive relief from the GST/HST on their purchases of taxable property and services.
22. As purchasers, there are 2 ways in which a provincial or territorial government and its listed entities may be eligible for relief from the GST/HST:
- where a provincial or territorial government has agreed to a pay-and-rebate model, all government departments and Crown agents pay the GST/HST at the time of purchase and listed entities subsequently claim a government rebate of 100% of the GST/HST paid or payable
claiming point-of-purchase relief from payment of the GST/HST through the use of an exemption certificate or a certification clause in a contract
23. The governments of all the participating provinces, as well as Quebec, British Columbia and Nunavut, have agreed to use the pay and rebate model. Therefore, their government departments and all of their Crown agents will pay the GST/HST on their purchases of taxable property and services. Their listed entities are eligible to claim a government rebate of 100% of the GST/HST paid or payable.
24. The governments of the remaining provinces and territories claim point-of-purchase relief from payment of the GST/HST. Listed entities in Manitoba, Saskatchewan, Alberta, the Northwest Territories and Yukon do not pay the GST/HST on purchases of taxable property and services, provided that an authorized official of the listed entity provides sufficient evidence to the supplier that the supplies are being purchased by a listed entity on its own behalf.
A Saskatchewan government agency (the Agency), which is a Crown agent listed on Schedule A to the Canada-Saskatchewan RTA, purchases office furniture for its own use. The office furniture is acquired in the name of the Agency and the Agency provides an exemption certificate certifying that it is a listed entity entitled to point-of-purchase relief.
Because the Agency is an entity listed on Schedule A to the Canada-Saskatchewan RTA and has provided the supplier with an exemption certificate, the supplier is not required to charge or collect the GST/HST on the consideration for the supply of the office furniture to the Agency. In this case, the supplier must retain the exemption certificate as evidence to support why the supplier did not collect the GST/HST on the taxable supply of the office furniture.
25. Provincial/territorial Crown corporations, boards, commissions and agencies that are not listed entities are not eligible for either point-of-purchase relief or a government rebate in respect of their purchases of taxable property and services. However, they may be eligible under the other provisions of the Act to claim input tax credits (ITCs) or rebates (for example, a public service bodies’ rebate, a new housing rebate or a pension entity rebate).
Documentation for supplies made to listed entities entitled to point-of-purchase relief
26. Suppliers must charge the GST/HST on their taxable supplies of property or services made to a government entity of a province that is entitled to point-of-purchase relief from the GST/HST (Manitoba, Saskatchewan, Alberta, the Northwest Territories and Yukon) unless the entity meets both of the following conditions:
- it is a listed entity purchasing the taxable property or service on its own behalf
- it provides sufficient documentary evidence to show that it is eligible for point-of-purchase relief from the GST/HST
27. Where a supplier has not charged the GST/HST on taxable supplies of property or services to a listed entity that is entitled to point-of-purchase relief, the supplier must maintain sufficient documentary evidence that the listed entity was the recipient of the supply and was eligible for that relief. For example, the supplier should retain a copy of an exemption certificate or contract containing a certification clause.
28. An exemption certificate or certification clause is a statement detailing that a purchase is being made by a listed entity of a province or territory that is entitled to point-of-purchase relief from the GST/HST. The exemption certificate or certification clause should be similar in form and content to the following:
This is to certify that the property and/or services ordered/purchased hereby are being purchased by
(Name of Provincial/Territorial Government Department or Entity)
and are not subject to the GST/HST.
(Signature of Authorized Official)
29. A supplier is required to retain any exemption certificate or certification clause issued by a listed entity to support the claim that a taxable supply of property or services is not subject to the GST/HST because the listed entity was eligible for point-of-purchase relief. For audit purposes, when determining whether a supply has been made to a listed entity eligible for point-of-purchase relief, the CRA will examine the business records that are normally kept by a supplier. Such documents may include:
- provincial or territorial government purchase orders and standing offers
- bills of sale
- debit notes
- statements of account
- books or ledgers of account
- written contracts or agreements
- any record contained in a computerized retrieval or data storage system
- any other document validly issued or signed by the provincial or territorial government GST/HST registrant
30. For more information, refer to GST/HST Memorandum 15-1, General Requirements for Books and Records.
Supplies made to employees of listed entities entitled to point-of-purchase relief
31. Purchases of taxable property or services made by employees of a listed entity in the employee’s own name are subject to the GST/HST even if the employee makes the purchase in the course of employment. Examples of these types of purchases include hotel and meal expenses incurred by employees of a listed entity while on travel status. Listed entities in the provinces and territories that are eligible to claim point-of-purchase relief cannot issue exemption certificates certifying entitlement to relief from paying the GST/HST for purchases of taxable property and services made by an employee in the employee’s name.
32. The GST/HST is not payable on purchases of taxable property and services if the employee uses a credit card for which a listed entity is solely liable. In such cases, the credit card must clearly indicate that it is for use in acquiring supplies for a listed entity entitled to point-of-purchase relief from the GST/HST. Purchases made by employees with a credit card issued in the name of the employee, or for which the employee and the listed entity are jointly liable, are subject to the GST/HST even if the purchase is made in the course of employment.
An employee of a Government of Manitoba department (the Department), which is listed on Schedule A to the Canada-Manitoba RTA, purchases audiovisual equipment for use by the Department. The employee pays for the purchase with a credit card issued in the name of the Department. The agreement between the Department and the issuer of the credit card clearly states that the Department is solely liable to pay for all purchases made with the card.
The employee (for the Department) may make use of an exemption certificate or a certification clause in a contract to claim relief from payment of the GST/HST on the Department’s purchase of the audiovisual equipment because:
the Department is listed on Schedule A to the Canada-Manitoba RTA
the agreement between the Department and the credit card issuer confirms that the Department is solely liable to pay for all purchases made with the credit card
In this case, the supplier must retain the documentary evidence to substantiate why no GST/HST was collected on the taxable supply of the audiovisual equipment made to the Department.
An employee of a Government of Yukon department (the Department), which is listed on Schedule A to the Canada-Yukon RTA, attends a 3-day conference in Yellowknife, Northwest Territories, on behalf of the Department. All of the employee’s hotel and meal expenses are paid for by a credit card issued in the name of the employee. The face of the credit card sets out the name of the employee.
Since it is the employee and not the Department that is liable to pay for purchases made with the credit card, the employee cannot use an exemption certificate or a certification clause to claim relief from payment of the GST/HST on the employee’s credit card purchases. In this case, the suppliers will charge the GST/HST on the consideration for the supplies of hotel and meals made to the employee, even though the employee is attending the conference as an employee of a Department listed on Schedule A to the Canada-Yukon RTA.
All GST/HST technical publications are available at GST/HST technical information.
To make a GST/HST enquiry by telephone:
- for GST/HST general enquiries, call Business Enquiries at 1-800-959-5525
- for GST/HST technical enquiries, call GST/HST Rulings at 1-800-959-8287
If you are located in Quebec, call Revenu Québec at 1-800-567-4692 or visit their website at revenuquebec.ca.
If you are a selected listed financial institution (whether or not you are located in Quebec) and require information on the GST/HST or the QST, go to GST/HST and QST - Financial institutions, including selected listed financial institutions or:
- for general GST/HST or QST enquiries, call Business Enquiries at 1-800-959-5525
- for technical GST/HST or QST enquiries, call GST/HST Rulings SLFI at 1-855-666-5166
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