Notice to the reader

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; 15% in Nova Scotia; 15% as well in New Brunswick and in Newfoundland and Labrador since July 1, 2016, and in Prince Edward Island since October 1, 2016. GST applies in the rest of Canada at the rate of 5%. Finally, on April 1, 2013, the 12% HST in British Columbia was replaced by the GST and a provincial sales tax.

Notice to the reader

This publication is in the process of being updated. It will include additional examples to clarify the application of the legislation where a car dealer earns a commission when it assigns a conditional sales contract or similar agreement to a financial institution. In addition, references to insurance and updated examples regarding insurance will be provided in another publication.

In the context of insurance, the term “arranging for” in paragraph (l) of the definition of financial service in subsection 123(1) of the Excise Tax Act is generally intended to include intermediation activities that are normally performed by a person whose principal business is as an insurance agent or broker. In determining if a person is ”arranging for” the issuance of insurance, all of the facts surrounding the transaction must be considered, including the activities performed by the intermediary and the nature of the insurance product. For example, a promotional or administrative service does not become a financial service of “arranging for” the issuance of insurance simply because the person is the only point of contact between the customer (insured) and the insurer.

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, 14% in Prince Edward Island (effective April 1, 2013) and 15% in Nova Scotia and, effective July 1, 2016, in New Brunswick and Newfoundland and Labrador. GST applies in the rest of Canada at the rate of 5%. Finally, on April 1, 2013, the 12% HST in British Columbia was replaced by the GST and a provincial sales tax.