GST/HST Ruling

Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.

XXXXX
XXXXX
XXXXX
XXXXX
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 120380

Business Number: XXXXX
Attention: XXXXX
June 14, 2010

Dear XXXXX:

Subject:

GST/HST RULING
Entitlement to Input Tax Credits in Respect of Goods Imported into Canada

Thank you for your letter of XXXXX concerning the entitlement of XXXXX to input tax credits (ITCs) in respect of goods imported into Canada.

The Harmonized Sales Tax (HST) currently applies at the rate of 13% in Nova Scotia, New Brunswick, and Newfoundland and Labrador. Effective July 1, 2010, HST will apply at the rate of 15% in Nova Scotia, 13% in New Brunswick, Newfoundland and Labrador, and Ontario, and 12% in British Columbia. The Goods and Services Tax (GST) will continue to apply at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

Statement of Facts

Based on the information in the letter including, the accompanying sample invoices; Customs import documents and Firm Reports; our telephone conversations of XXXXX; and supplementary documentation (including invoices for inbound and outbound shipping charges, and additional warehousing invoices) submitted by XXXXX on XXXXX, we understand the following:

1. XXXXX is a non-resident corporation that manufactures XXXXX ("the products") XXXXX. All the manufacturing for these products are done in XXXXX.

2. XXXXX supplies its products worldwide; however all its North American customers are located in the USA. XXXXX does not have any customers in Canada, it does not solicit business in Canada, nor does it deliver products to any person in Canada for consumption, use or supply in Canada.

3. XXXXX is a Canadian corporation that provides XXXXX services and warehousing services.

4. XXXXX entered into an agreement with XXXXX whereby XXXXX would provide XXXXX services and warehousing services. XXXXX ships products to Canada for storage at XXXXX warehouse until orders are received for the products from clients in the USA. As part of the arrangement, XXXXX set up an XXXXX System that automates the process so that when XXXXX receives an order from a customer in the USA, the products may be shipped from XXXXX warehouse to that customer. XXXXX arranges for the shipment of the products to the clients in the USA.

5. XXXXX engages non-resident carriers to transport the products in containers from XXXXX to Canada - the carriers are not registered for purposes of the GST/HST.

6. XXXXX acts as the importer of record and pays GST on the importation of the products into Canada. The arrangement between XXXXX and XXXXX has been ongoing since XXXXX and XXXXX has paid tax on the importation of the products into Canada from that period until XXXXX.

7. XXXXX has not claimed ITCs or otherwise recovered the GST paid by XXXXX on importation of the products into Canada during that period.

8. XXXXX was not registered for purposes of the GST/HST, nor did not make any taxable supplies in Canada during the period identified above. XXXXX has a Business Number XXXXX.

9. XXXXX invoices XXXXX monthly for storage; this charge includes a warehousing charge for leftovers from the prior month, a storage charge for incoming products and other miscellaneous charges.

10. In on our telephone conversation of XXXXX, you indicated that there is no written agreement between XXXXX and XXXXX for the supply of the services provided to XXXXX by XXXXX.

Ruling Requested

You would like confirmation of the following:

1. XXXXX may claim ITCs to recover the GST paid by XXXXX on the importation of the products into Canada pursuant to section 169 and 180 of the ETA.

2. XXXXX will not be required to charge the GST to XXXXX in respect of the products, provided the products are exported from Canada to XXXXX customers in the USA and XXXXX retains documentary evidence to substantiate the export of the products from Canada.

Ruling Provided

1. Provided that XXXXX provides XXXXX with satisfactory evidence that the tax has been paid on the importation of the products, XXXXX is entitled to claim ITCs for the GST that is deemed under section 180 of the ETA to have been paid equal to the GST paid by XXXXX on the importation of the products.

2. Based on the application of subsection 179(3) of the ETA, XXXXX is not required to charge the GST to XXXXX in respect of the storage service in respect of the products, and the general drop-shipment rule will not apply to that supply, provided the products are exported from Canada to XXXXX customers in the USA and XXXXX retains satisfactory documentary evidence of the exportation of the products.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

Explanation

Section 180 allows for the flow-through of ITCs to allow a registrant to recover the amount of tax that is paid by an unregistered non-resident on the importation of goods where the non-resident has paid tax on the importation of goods, the physical possession of which is caused by the non-resident to be transferred in Canada to the registrant, in order for the registrant to make a taxable supply of a commercial service in respect of the goods to the non-resident.

For the purpose of determining an input tax credit of the registrant under section 169, once the non-resident provides the registrant in the circumstances described above with satisfactory evidence that the tax has been paid on the goods, the registrant is deemed at the time the non-resident paid the tax, to have paid tax in respect of a supply of the goods to the registrant equal to the tax paid by the non-resident.

The registrant described above who acquires physical possession of the goods to perform a commercial service in respect of the goods is also deemed to have acquired the goods for use exclusively in its commercial activities, resulting in the registrant satisfying all of the conditions to become entitled to an ITC for the tax that the registrant is deemed to have paid.

As a result of the application of section 180 and 169, XXXXX is entitled to claim an ITC to recover an amount equal to the tax paid by XXXXX on the importation of the products.

The second part of your enquiry concerns the application of the drop-shipment rules in section 179, particularly the exception in subsection 179(3) to the general drop-shipment rule in subsection 179(1).

Generally, a drop-shipment occurs where a registrant, under an agreement with an unregistered non-resident person, acquires physical possession of tangible personal property (TPP) of the non-resident for purposes of making a supply of a commercial service in respect of the TPP, and subsequently transfers physical possession of the TPP in Canada to another person or to the non-resident. Pursuant to subsection 179(1) the registrant is deemed to have made a taxable supply of the TPP for its fair market value to the non-resident and not to have supplied its service in respect of the TPP.

An exception to the general rule under subsection 179(1) occurs where the goods are directly exported or transferred to a third person who intends to export the goods. Pursuant to subsection 179(3) the supply of the commercial service is deemed to be made outside of Canada if, after the registrant acquires physical possession of the property for purpose of making a taxable supply of a commercial service in respect of the property to the non-resident person, the property is exported in accordance with the requirements of subsection 179(3). In particular, the registrant must either:

• cause physical possession of the property to be transferred to a person at a place outside Canada, or
• cause physical possession to be transferred to a carrier, or mail the property, for export and delivery to a person at a place outside Canada, or
• cause physical possession of the property to be transferred at a place in Canada to the non-resident person or any other person (each referred to as an "exporter") for export in the following circumstances:

- after physical possession of the property is transferred to the exporter, the exporter exports the property as soon as is reasonable given the circumstances surrounding the exportation and, if applicable, in accordance with the normal business practices of the exporter and the owner of the property,
- the property has not been acquired by the non-resident person or any owner for consumption, use or supply in Canada at any time after physical possession of the property is transferred to the exporter and before it is exported,
- after physical possession of the property is transferred to the exporter and before the property is exported, it is not further processed, transformed or altered, except to the extent reasonably necessary or incidental to its transportation, and
- the registrant maintains satisfactory evidence that the property has been exported, will be exported.

Subsection 179(3) would deem the supply of storage services provided in Canada by XXXXX to XXXXX to be made outside of Canada where the products are exported to XXXXX clients in the USA, and XXXXX retains satisfactory documentary evidence to substantiate the export of the products. As such, XXXXX would not be required to charge the GST to XXXXX on the supply of the storage service in respect of the products. Subsection 179(3) would also deem the general drop-shipment rule under subsection 179(1) not to apply to the supply.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 957-7841. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
Dwayne Moore
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.

XXXXX
XXXXX
XXXXX
XXXXX
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 118382

Business Number: XXXXX
Attention: XXXXX XXXXX
July 27, 2010

Dear XXXXX:

Subject:

GST/HST RULING
Sales of XXXXX

Thank you for your letter of XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the sales of XXXXX made by XXXXX. We apologize for the delay in our response.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

Statement of Facts

We understand the following:

• XXXXX.

• XXXXX are instruments used for diagnosis. They are probes mainly used to detect breast cancer in conjunction with isotopes that are injected into the body. They are comprised of XXXXX and various models of probes and cables.

• XXXXX are sutures of different materials that are used for internal and external surgical closures.

• XXXXX are sold to hospitals for their use on patients.

Ruling Requested

You would like to know if the sales of XXXXX by XXXXX are zero-rated.

Ruling Given

Based on the facts set out above, we rule that the sales of XXXXX by XXXXX are taxable supplies pursuant to section 165, and are not zero-rated.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

Explanation

The general rule in section 165 is that all supplies of goods and services made in Canada are subject to the GST/HST. There are exceptions for medical devices that are specifically identified in Part II of Schedule VI as being zero-rated; i.e., the tax applies at the rate of 0%. If a medical device is not included in Part II of Schedule VI, then the supply of the medical device falls under the general rule. There is no provision in Part II of Schedule VI that would apply to the supply of XXXXX, and therefore the supply of these products falls under the general rule in section 165.

XXXXX.

Yours truly,
John Ware
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.

XXXXX
XXXXX
XXXXX
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 119906
Attention: XXXXX XXXXX XXXXX
April 22, 2010

Dear XXXXX:

Subject:

GST/HST RULING
Application of GST/HST to XXXXX Crackers

Thank you for your letter of XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to XXXXX Crackers.

HST applies at the rate of 13% in the participating provinces of Nova Scotia, New Brunswick, and Newfoundland and Labrador. GST applies at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

Statement of Facts

We understand the relevant facts as follows.

1. The product is XXXXX Crackers (the Product).

2. XXXXX.

3. You provided a sample of the Product in plain packaging. XXXXX packaging XXXXX were also provided.

4. The Product is a XXXXX.

5. The label on the XXXXX packaging XXXXX refers to the Product as XXXXX.

6. The Product will come in XXXXX varieties. XXXXX.

7. The Product's ingredients include XXXXX.

8. The Product will be sold in XXXXX. The manufacturer suggests shelving the Product with other XXXXX crackers, but has no control on the placement of the product by the retailers.

Ruling Requested

You would like to know the GST/HST status of the Product.

Ruling Given

Based on the facts set out above, we rule that supplies of the Product are taxable at 5% GST or 13% HST, pursuant to section 165.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

Explanation

Generally, every recipient of a taxable supply made in Canada shall pay tax calculated at the rate of 5% on the value of the consideration for the supply (13% in the participating provinces of Nova Scotia, New Brunswick, and Newfoundland and Labrador) unless the supply is zero-rated. The tax rate in respect of a zero-rated supply is 0%, where a zero-rated supply is a supply that is included in Schedule VI.

Under Part III of Schedule VI, certain supplies of basic groceries are zero-rated. Section 1 of Part III of Schedule VI, zero-rates supplies of food or beverages for human consumption, including sweetening agents, seasonings and other ingredients mixed with or used in the preparation of such food or beverages, other than supplies included in paragraphs (a) to (r) of that section.

Paragraph 1(f) excludes supplies of chips, crisps, puffs, curls or sticks (such as potato chips, corn chips, cheese puffs, potato sticks, bacon crisps and cheese curls), other similar snack foods or popcorn and brittle pretzels (but not including any product that is sold primarily as a breakfast cereal) from zero-rating.

GST/HST Memoranda Series 4.3, Basic Groceries, outlines factors that are used to determine if a particular product is similar to a chip, crisp, puff, curl or stick as described under paragraph 1(f) of Part III of Schedule VI. These factors include the properties of the product (ingredients, flavours, texture, cooking process and appearance), its labelling, its packaging, and its marketing.

The properties of the Product indicate that it fits within paragraph 1(f) of Part III of Schedule. These include the Product's flavours, its texture (XXXXX), its appearance, the XXXXX labelling which includes the word XXXXX under its name, and the fact that it is XXXXX packaged XXXXX.

Although we consider product placement as a relevant consideration, it alone is not considered a determinative factor. Also, placement is at the discretion of retailers, and XXXXX.

The Product is considered to be "other similar snack foods" under paragraph 1(f). As a result, the Product falls under the exclusion pursuant to paragraph 1(f) of Part III of Schedule VI, and its suppliers are taxable at 5%GST, 13% HST.

The Government of Ontario and the Government of British Columbia have each proposed a harmonized sales tax (HST) which would come into effect on July 1, 2010. The HST rate in Ontario will be 13% of which 5% will represent the federal part and 8% the provincial part. The Government of British Columbia has proposed that the HST rate would be 12% of which 5% would represent the federal part and 7% the provincial part. The Government of Nova Scotia has proposed, that effective July 1, 2010, the HST rate for Nova Scotia would increase from 13% to 15%.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-8815. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
Raymond Labelle
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.

Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
XXXXX
XXXXX
XXXXX
Case Number: 111798

March 30, 2010

Dear XXXXX:

Subject:

GST/HST RULING
XXXXX

Thank you for your letter of XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the product known as XXXXX (the Product). We apologize for the delay in this response.

HST applies at the rate of 13% in the participating provinces of Nova Scotia, New Brunswick and Newfoundland and Labrador. GST applies at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

Statement of Facts

Our understanding of the facts is as follows:

1. You are requesting a ruling on the Product on behalf of your client, XXXXX.

2. The Product is distributed by XXXXX, a company located in XXXXX.

3. The submission consists of labels for each package and an information brochure explaining the Product in detail.

4. You state that the Product is a health food containing a number of uncooked natural grains in powder form and XXXXX.

5. The ingredients of the Product are listed on the Product label and are as follows:

XXXXX.

6. In addition to the ingredients, the back panel of the package contains the following information:

XXXXX

XXXXX.

7. The front of the XXXXXg package contains the following wording:

XXXXX.

8. The Nutrition Facts and Serving Suggestions are shown on a side panel of the package. A serving size is XXXXX. The Serving Suggestion states: XXXXX. The Product is to be stored in XXXXX.

9. The package also contains, in small print, the following wording: XXXXX.

10. The packaging for the XXXXXg size package which contains XXXXX of XXXXXg has a third panel which contains the following information:

XXXXX.

*XXXXX

11. The Product packaging suggests XXXXX. This site was reviewed and the facts which follow were obtained from it.

12. XXXXX.

13. XXXXX.

14. XXXXX:

XXXXX
XXXXX

XXXXX.

15. The Product is not labelled as a meal replacement or nutritional supplement.

Ruling Requested

You would like to know how the GST/HST applies to supplies of the Product.

Ruling Given

Based on the facts set out above, we rule that supplies of the Product are taxable at 5% GST and 13% HST pursuant to section 165.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

Explanation

Generally, every recipient of a taxable supply made in Canada shall pay tax calculated at the rate of 5% on the value of the consideration for the supply (or 13% in the participating provinces of Nova Scotia, New Brunswick, and Newfoundland and Labrador) unless the supply is zero-rated. Zero-rated supplies are included in Schedule VI. The tax rate in respect of a zero-rated supply is 0%.

Under Part III of Schedule VI, certain supplies of basic groceries are zero-rated. Section 1 of Part III of Schedule VI zero-rates supplies of food or beverages for human consumption, including sweetening agents, seasonings and other ingredients mixed with or used in the preparation of such food or beverages, other than supplies included in paragraphs (a) to (r) of that section.

Products that qualify and are labeled as "nutritional supplements" or "meal replacements" pursuant to the Food and Drugs Act and Regulations are considered food or beverages for purposes of section 1 of Part III of Schedule VI. Moreover, they are not subject to the exclusions under paragraphs 1(a) to 1(r) of Part III and, therefore, are zero-rated.

In addition, if a product is represented as being a meal replacement or nutritional supplement as evidenced by the label, the Canada Revenue Agency (CRA) will accept this information as fact in determining its tax status.

Based on the Product's Nutrition Facts, the Product does not meet the requirements outlined in the Food and Drug Regulations, to be considered either a meal replacement or a nutritional supplement. In addition, the Product's label does not advertise it as either a meal replacement or a nutritional supplement.

The terms "food" and "beverage" are not defined in the ETA. However, the CRA considers a product to be a food or beverage if an average consumer would recognize and purchase the product as such in the ordinary course of buying basic groceries. Consumers usually consume food and beverages to sustain or maintain life, to allay hunger or thirst, or for enjoyment rather than for therapeutic or preventative effects.

GST/HST Memorandum 4.3, Basic Groceries and Info Sheet GI-01, Products Commonly Described as Dietary Supplements, outline the criteria that the CRA considers in determining whether a product is a food, beverage or ingredient for human consumption or a dietary supplement. These criteria consider the labelling, packaging, and marketing of the product. They also provide explanations of the meanings of food, beverages and ingredients.

"Food and beverages are usually consumed by an average person to sustain or maintain life, to allay hunger or thirst, or for enjoyment. Ingredients add to the flavour, texture or appearance of the final product. A product that is marketed for its beneficial effects and that is added to a food or beverage simply as a way to consume it would not be considered an ingredient. Products commonly referred to as dietary supplements are consumed for their therapeutic or preventative effects (e.g., to correct actual or perceived health problems), or to achieve specific beneficial effects related to performance or physique."

Products commonly described as dietary supplements are not considered to be basic groceries. Dietary supplements include products such as vitamins, minerals, tonics, fibre, protein powders and herbal supplements. These products are generally taken for their therapeutic or beneficial effects and are available in various forms, for example, pill, capsule, tablet, powder, liquid gel, wafer and concentrates. Although these products may contain some essential nutritional elements, they are not considered to be basic groceries.

The Product labelling and marketing indicates that it is a dietary supplement.

• The label and marketing indicate that it XXXXX.

• The label and marketing emphasizes the XXXXX content.

• Many of the Product's ingredients, for example, XXXXX are not commonly regarded as ingredients to basic groceries.

• The label and marketing claims that it will XXXXX.

• The label advises to XXXXX and the marketing states that XXXXX.

• The health benefits of using the Product, such as XXXXX are emphasized and the Product's web site makes a variety of health-related claims.

• The Product is in powder form.

The primary focus is on the expected health benefits of ingesting the Product. Products consumed for beneficial effects do not fall within the meaning of a "food" or "beverage" simply because they are ingested into the body by eating or drinking.

Although some of the criteria in GST/HST Memorandum 4.3, Basic Groceries, may indicate that the Product is not a dietary supplement, on balance it is a dietary supplement for purposes of section 1 of Part III of Schedule VI. As a result, supplies of the Product are taxable at 5% GST or 13% HST as applicable.

The Government of Ontario and the Government of British Columbia have each proposed a harmonized sales tax (HST) which would come into effect on July 1, 2010. The HST rate in Ontario will be 13% of which 5% will represent the federal part and 8% the provincial part. The Government of British Columbia has proposed that the HST rate would be 12% of which 5% would represent the federal part and 7% the provincial part.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at XXXXX. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
Nancy Jardine
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.

Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
XXXXX
XXXXX
XXXXX
Case Number: 112649

Business Number: XXXXX

March 12, 2010

Dear XXXXX:

Subject:

GST/HST RULING
Tax Status of Remuneration received as Chair of Committee

Thank you for your letter of XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the remuneration you received as chair of a committee.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

Statement of Facts

We understand that:

1. You were appointed to the Independent Review Committee (Committee) by the board of XXXXX.

2. The XXXXX requires that investment funds that are reporting issuers, such as XXXXX, have an independent review committee, effective November 1, 2007.

3. The role of the Committee is a quasi-regulatory function. The Committee is to review activities of the fund for potential conflicts-of-interest and ethical issues.

4. The Committee's authority is granted by the securities legislation of the applicable jurisdiction, in this case XXXXX.

5. Initially the members are appointed and their remuneration is set by the manager of the fund as required by the XXXXX. Following this the members can reappoint themselves and set their own remuneration, however the amount has to be reasonable. The amount must reflect the number, nature, and complexity of the investment funds, the industry best practices, as well as the best interests of the investment fund. These requirements are set by regulation and not by any contract of services or contract for services.

6. The initial compensation was set by XXXXX at $XXXXX annually as well as $XXXXX per meeting. Usually XXXXX or XXXXX meetings are held each month.

7. XXXXX is required to cover all Committee-related expenses.

8. Each term of office is between XXXXX and XXXXX years. A member may not be reappointed for a term or terms of office that, if served, would result in the member serving on the independent review committee for longer than XXXXX years, unless the investment fund manager agrees to the reappointment.

9. The very nature of the Committee requires that its members be independent. The XXXXX describes independent as being a member who has no material relationship with the investment fund manager, the investment fund, or an entity related to the fund. A material relationship is defined as a relationship that could reasonably be perceived to interfere with the member's judgment regarding a conflict of interest matter. The members of the Committee, once appointed, are free to (re)appoint members, hold meetings, set compensation, request information it determines is useful or necessary, engage independent counsel, and, of course, prepare reports for the management, security holders, and securities regulatory authorities. The members are able to decide how and when they are going to carry out their duties, subject to the XXXXX.

10. You have been registered for GST since XXXXX in order to account for the GST you have collected from XXXXX. All the GST collected has been reported.

Ruling Requested

You would like to know whether or not the compensation received from XXXXX is subject to GST and whether you should remain registered.

Ruling Given

Based on the facts set out above, we rule that the compensation that you receive from XXXXX for your work on the Committee is considered income from an office and is therefore not subject to GST.

Based on the information provided, you will no longer need to be registered. You will shortly receive written notice that your registration number will be cancelled by the CRA effective XXXXX. All GST collected during the period XXXXX to XXXXX is due before XXXXX. You may wish to provide a copy of this ruling to XXXXX in order to avoid future payments of GST by XXXXX.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

For your convenience, find enclosed a copy of GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 954-2488. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
Doug Campbell CGA
General Operations Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
XXXXX

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.

XXXXX
XXXXX
XXXXX
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Attention: XXXXX
Case Number: 113428

June 7, 2010

Dear XXXXX:

Subject:

GST/HST RULING
Treatment of XXXXX-issued employee voucher

Thank you for your XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to a transaction involving a XXXXX-issued "Employee Voucher Coupon" accepted in exchange for the supply of a XXXXX without charge.

HST currently applies at the rate of 13% in Nova Scotia, New Brunswick, and Newfoundland and Labrador. Effective July 1, 2010, HST will apply at the rate of 15% in Nova Scotia, 13% in New Brunswick, Newfoundland and Labrador, and Ontario, and 12% in British Columbia. GST will continue to apply at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

Statement of Facts

We understand the following:

1. XXXXX issued an "Employee Voucher Coupon" ("the Voucher") that may be exchanged by the XXXXX employee as full consideration for a supply of one XXXXX. At the time of issue, the Voucher is signed by an authorized representative of the XXXXX. There is an expiry date on the Voucher, but there is no fixed dollar amount stated. It can be redeemed only for XXXXX brands of the XXXXX from XXXXX ("the store").

2. The employee who wants to redeem the Voucher ticks off the brand he wants to acquire, signs and surrenders the Voucher to the store and receives the selected XXXXX.

3. The employee arrived at XXXXX where there is XXXXX of the store and surrendered the Voucher as full consideration for his XXXXX.

4. At the time of the sale of XXXXX to the employee using the Voucher, the store records the full sale price, including GST/HST, which is offset with a receivable to the store from the XXXXX.

5. Each week the corporate office of the store compiles the Vouchers from its XXXXX for reimbursement of product from the XXXXX.

Ruling Requested
You would like to know

1. Is the Employee Voucher Coupon ("the Voucher") a coupon?

2. If the Voucher is a coupon for purposes of section 181, what type of coupon is it and what provisions apply?

3. Is an input tax credit ("ITC") available with respect to the Voucher?

Ruling Given
Based on the facts set out above, we rule that
1. The Employee Voucher Coupon ("the Voucher") is a coupon for purposes of section 181.

2. Although the store is reimbursed by the XXXXX for accepting the Voucher as a coupon in exchange as full consideration of a supply of a XXXXX, the coupon is not considered to be a reimbursable coupon to which subsection 181(2) applies as there is no fixed dollar amount specified in the Voucher; instead, subsection 181(4) applies to the Voucher.

Under subsection 181(4), the Voucher is exchanged for a XXXXX, the value of the consideration for the supply of the XXXXX is reduced before the calculation of any GST/HST. Since the Voucher is exchanged as full consideration for the XXXXX, GST/HST would be calculated on the value remaining that is nil. Therefore, the store does not charge and account for the HST in respect of the supply of the XXXXX provided to the employee in exchange for the Voucher.

3. No ITC in respect of the Voucher is available.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

Explanation

The Voucher permits the bearer, the XXXXX employee, to exchange the Voucher for a XXXXX. The Voucher is considered to be a "coupon" as the term is defined and interpreted for purposes of section 181. However, as the coupon (i.e. the Voucher) has no fixed dollar amount specified in the coupon, the Voucher is not a reimbursable coupon as outlined in subsection 181(2). Regardless of the fact that the Voucher is reimbursable to the store, the Voucher does not have a stated fixed dollar value; as a result, subsection 181(4) applies to the Voucher.

When the Voucher is reimbursed with product from the XXXXX, we view two simultaneous transactions to occur. One transaction is the reimbursement of the Voucher to the store by the XXXXX for the value of the product and the other transaction is the sale of the replacement product to the store for the amount reimbursed for the Voucher. Under paragraphs 181(5)(a) and 181(5)(b), the amount reimbursed in the first transaction by the XXXXX is deemed not to be consideration for a supply and the payment by the XXXXX and receipt by the store of the amount is deemed not to be a financial service. Effectively, the XXXXX has now paid an amount to the store for the earlier supply of XXXXX to the employee and not for a separate supply of the Voucher. Then that amount is used in the second transaction as consideration for the supply of the replacement product received by the store from the XXXXX.

The store is entitled to claim an ITC in accordance with the rules of section 169 with respect to its purchases of XXXXX, including the replacement product received, to the extent the XXXXX is acquired for supply in the course of the store's commercial activities. However, no ITC is available with respect to the Voucher as the Voucher, although a coupon, is not a reimbursable coupon under subsection 181(2) and, therefore, paragraph 181(5)(c) does not apply such that an ITC in respect of the Voucher may be claimed.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-8811. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
William Parker
Specialty Tax Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.

XXXXX
XXXXX
XXXXX
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 113793

Business Number: XXXXX
Attention: XXXXX
September 9, 2010

Dear XXXXX:

Subject:

GST/HST RULING
Lease of land to a mining company

This letter is further to XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to land leased by XXXXX.

We understand that XXXXX, you discussed XXXXX, two issues regarding the lease of real property by XXXXX. One of the issues was addressed in the above-referenced ruling. This ruling concerns the remaining issue, namely, the application of the GST/HST to land leased by XXXXX to a mining company. We apologize for the delay in this response.

HST applies at the rate of 15% in Nova Scotia, 13% in New Brunswick, Newfoundland and Labrador, and Ontario, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

Statement of Facts

Our understanding of the facts is as follows:

1. XXXXX is a municipality as defined under the ETA and is registered for GST/HST purposes.

2. XXXXX entered into a XXXXX lease agreement (the Lease), effective XXXXX, with XXXXX (the Lessee) for the supply by XXXXX of certain vacant municipal lands (the Leased Lands) XXXXX. A copy of the Lease was supplied for our review.

3. XXXXX of the Lease prohibits the Lessee from using the Leased Lands for any purpose other than XXXXX, including the construction and use of all buildings, structures, facilities, machinery, equipment, supplies, air strips, power, fuel and water supplies, roads and all other support and services facilities relating to the construction and operation of XXXXX.

4. Per XXXXX of the Lease, the Lessee shall not construct roads and/or remove timber, remove and/or use sand and gravel from the Leased Lands and/or divert surface and/or ground water without obtaining proper approval and permits from the applicable Government agencies.

5. In accordance with XXXXX of the Lease, the Lessee shall ensure that its XXXXX operations are limited to the Leased Lands and, in particular, XXXXX, the Lessee shall be solely responsible for any damages caused thereby and any removal and cleanup required.

6. XXXXX access road runs through the Leased Lands, XXXXX.

7. XXXXX of the Lease stipulates a starting rental rate of XXXXX plus applicable GST and provincial sales tax, XXXXX.

8. XXXXX of the Lease requires the Lessee to pay all royalties, charges, taxes, rates and assessments, whatever, whether municipal, provincial or otherwise which may be charged or become payable in respect of the occupation of the Leased Lands, rental of the Leased Lands, or of any business or operations conducted by the Lessee on the Leased Lands.

9. XXXXX of the Lease provides the Lessee with the option to renew the Lease XXXXX.

10. XXXXX of the Lease provides, in part, that upon termination of the Lease, or upon the Lessee's operations on the leased lands being ceased for any reason, the Lessee must, at its sole expense, comply with XXXXX approved plans for decommissioning, reclamation, abandonment and post-decommissioning monitoring of the Leased Lands.

Ruling Requested

You would like to know if the supply of the Leased Lands by XXXXX to the Lessee, as described in the Lease, is subject to the GST. Specifically, we have been asked to determine if subsection 162(2) will apply to the supply of real property made under the Lease.

Ruling Given

Based on the facts set out above, we rule that subsection 162(2) does not apply to the supply of the Leased Lands made by XXXXX to the Lessee under the Lease. As no other relieving provision applies, the GST is payable by the Lessee and is calculated on the value of the consideration payable for XXXXX supply of the Leased Lands.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

Explanation

Generally, a supply of real property made in Canada is subject to the GST/HST unless the circumstances of the supply satisfy a specific exemption or relieving provision.

Subsection 162(2) provides that for GST/HST purposes, the supply of
(a) a right to explore for or exploit a mineral deposit, a peat bog or deposit of peat or a forestry, water or fishery resource,
(b) a right of entry or user relating to a right referred to in paragraph (a),
(c) a right to an amount computed by reference to the production (including profit) from, or to the value of production from, any such deposit, bog or resource, or
(d) a right to enter or use land to generate, or evaluate the feasibility of generating, electricity from the sun or wind,

shall be deemed not to be a supply and any consideration paid or due, or any fee or royalty charged or reserved, in respect of the right shall be deemed not to be consideration for that right iFootnote 1. Therefore, supplies of rights described in subsection 162(2) are not subject to the GST/HST.

Paragraph 162(2)(a) pertains to the right to explore or exploit a mineral deposit, a peat bog, a deposit of peat or a forestry, water or fishery resource. The Lease does not grant the Lessee the right to explore or exploit any such resource. Rather, it allows the Lessee to use the Leased Lands for XXXXX, activities that occur after the exploration or exploitation of a mineral deposit has taken place. As such, paragraph 162(2)(a) does not apply.

In accordance with paragraph 162(2)(b), the supply of a right of entry or user relating to a right referred to in paragraph 162(2)(a) is also deemed not to be a supply. Therefore, whether a lease of property is a supply which falls within the scope of paragraph 162(2)(b) will depend on the express purpose(s) for which the lessee is granted use of the land. Given that the Lease does not confer upon the Lessee a right of entry or user related to a right referred to in paragraph 162(2)(a), paragraph 162(2)(b) does not apply to the supply in question. Furthermore, as neither paragraphs 162(2)(c) or (d) are relevant in this case, the supply of the Leased Lands falls outside of the scope of section 162.

Section 25 of Part VI of Schedule V to the ETA is the general exempting provision for supplies of real property made by many public service bodies. However, this provision does not apply to any supply made by a municipality for which the consideration became due after March 9, 2004, or was paid after March 9, 2004, without having become due, unless the supply is made under an agreement in writing entered into before March 10, 2004. The supply of the Leased Lands by XXXXX to the Lessee is excluded from exemption under section 25 of Part VI of Schedule V to the ETA, as the supply was made pursuant to an agreement entered into after March 9, 2004.

As no other exempting or relieving provisions apply, the supply of the Leased Lands made by XXXXX is subject to the GST.

The GST/HST is calculated on the value of the consideration for a taxable supply. The value of the consideration is defined under subsection 153(1) as

(a) where the consideration or that part of the consideration is expressed in money, the amount of the money; and
(b) where the consideration or that part is other than money, the fair market value of the consideration or that part at the time the supply was made.

In the case at hand, therefore, the value of the consideration for the supply of the Leased Lands would include:

i) the annual rent set out in XXXXX of the Lease;
ii) the fair market value of the improvements (that is, the new road) and the services required to be supplied by the Lessee under XXXXX of the Lease;
iii) any amounts identified under XXXXX of the Lease incurred by XXXXX and reimbursable by the Lessee; and
iv) any amounts identified in XXXXX of the Lease that are charged upon the Lands or assessed against XXXXX, as registered owner of the Leased Lands.

With respect to (ii) above, the value of the improvements (the road, in this case) and services are included in the value of the consideration because it is a requirement of the Lease that the Lessee undertake the improvements and services in order to retain possession of the land and as such, form additional consideration for the supply of the Lease Lands made by XXXXX.

With respect to (iii) above, while the Lessee may be responsible under the Lease to pay any increased taxes, rates and assessments levied by the local township or provincial authority as a result of the Lessee's use of the Leased Lands, the ultimate liability to pay the taxes, rates and assessments may rest with the property owner (that is, XXXXX). The governing provincial legislation (for example, XXXXX) ordinarily specifies who is to be assessed for the particular tax, rate, etc. Where a tenant is required under a lease agreement to pay a separate amount in respect of property taxes, etc, assessed against the owner of the property, the amount is generally included in the value of the consideration for the lease of the property, even if the lessee pays the amount directly to the taxing or charging authority. On the other hand, amounts assessed directly against the Lessee and for which XXXXX has no liability would not be included in determining the value of the consideration for the supply of the Leased Lands made by XXXXX.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at XXXXX. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
XXXXX
Real Property Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate
XXXXX

i 1. Paragraph 162(2)(d) applies to supplies made on or after February 26, 2008. It also applies to supplies made before that date but only in respect of the portion of the consideration for the supply that becomes payable, or is paid without having become payable, on or after February 26, 2008.

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UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.

XXXXX
XXXXX
XXXXX
XXXXX
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 115852

Business Number: XXXXX
Attention: XXXXX

Dear XXXXX:

Subject:

GST/HST RULING
Application of GST/HST to the supply of nursing personnel to health care facilities located in XXXXX

We are writing further to your letter of XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of nursing personnel by XXXXX to health care facilities located in XXXXX.

HST applies at the rate of 15% in Nova Scotia, 13% in New Brunswick, Newfoundland and Labrador, and Ontario, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

Statement of Facts

We understand the facts as follows:

1. XXXXX is registered for GST/HST purposes.

2. XXXXX.

3. XXXXX is in the business of supplying registered nurses (RNs), registered practical nurses (RPNs), and personal support workers (PSWs) to health care facilities in XXXXX, which consist largely of long term care facilities.

4. All RNs and RPNs are licensed by the XXXXX and their duties are limited to the scope of their respective practices.

5. XXXXX enters into a XXXXX (Agreement) with each of its clients (Clients). A representative copy of the Agreement, XXXXX, was included XXXXX.

6. The Agreement and its components XXXXX describe the scope of the services to be provided, the conditions relating to the supply of services, and the fee schedule relating to these services.

7. According to the Agreement, XXXXX is retained to "provide a supply of nursing services to residents/patients" in the Client's facility. The Agreement indicates that these services shall be satisfied by RNs, RPNs, and PSWs.

8. Pursuant to the Agreement, XXXXX and the Client agree to the following conditions with respect to the supply:

XXXXX.

XXXXX.

XXXXX

9. XXXXX.

10. XXXXX:

XXXXX

XXXXX.

11. In addition to the responsibilities described in the Agreement XXXXX you have indicated that the qualifications, job purpose and responsibilities of the RNs are further detailed in the job description Registered Nurse which was submitted as XXXXX. We understand that this particular job description does not form part of, nor is it an attachment to, the Agreement.

12. XXXXX also includes the job description for XXXXX Case Manager XXXXX (CM). The CM is an RN with a minimum of XXXXX years of experience in nursing practice who is employed by XXXXX. The CM's role is to provide support, advice, and assistance to 'on-site' XXXXX personnel from XXXXX premises. The Agreement does not include a reference to the CM nor is there any fee charged to the Client in respect of the CM's services.

13. XXXXX employs approximately XXXXX RNs, other than the CMs. Typically, not more than XXXXX RN is supplied to each Client at a given time; however, this will depend on the coverage requirements at the Client's facility. XXXXX employs approximately XXXXX RPNs.

14. The Agreement does not indicate the specific number or type of personnel to be provided except to say they must be RNs, RPNs, and PSWs. The Client will generally determine its own staffing needs and prepare its own work schedules based, in part, on coverage requirements. Depending on the circumstances, XXXXX personnel may be scheduled in advance, or they may be called upon to fill vacancies in the Client's schedule.

15. XXXXX has a XXXXX policy under which the same RN, RPN, or PSW (as the case may be) is provided to a client to the extent that it is possible. You have indicated that the purpose of this policy is to facilitate the development of the nurse-patient relationship between the personnel rendering the care services and the residents who receive the care.

16. Each resident at the Client's facility has a resident care plan that is based on his or her medical, dietary and other needs. The resident care plan is initially prepared by a physician or an RN and is generally updated by an RN on a quarterly basis or when a resident's needs change. RNs and RPNs supplied by XXXXX may assist in developing or updating a resident's care plan.

17. XXXXX personnel will assist in preparing any forms or reports (e.g., Incident Reports) that fall within the responsibilities of the position they occupy.

18. XXXXX holds an XXXXX Insurance Policy with respect to its supply of personnel that includes a $XXXXX coverage limit.

19. XXXXX.

Ruling Requested

XXXXX.

According to your letter, it is understood by XXXXX that the supply of personnel consisting of PSWs does not fall within the scope of Section 6 of Part II of Schedule V to the ETA. With this in mind, you have asked that our Ruling be limited to the supply of personnel consisting of RNs and RPNs only (which you refer to as "Nursing Service Providers"). Specifically, you would like to know whether the supply of Nursing Service Providers made by XXXXX is a supply of nursing services that is exempt under section 6 of Part II of Schedule V.

Ruling Given

Based on the facts set out above, we rule that the supply of personnel, consisting of RNs, RPNs, and PSWs, made by XXXXX is taxable as it is not an exempt supply of a nursing service described in section 6 of Part II of Schedule V.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

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. 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.

Application of Section 6 of Part II of Schedule V

Section 6 of Part II of Schedule V was amended, effective February 27, 2008, to provide that a supply of a nursing service rendered to an individual by a registered nurse, a registered nursing assistant, a licensed or registered practical nurse or a registered psychiatric nurse is exempt if the service is rendered within a nurse-patient relationship. As a result of this amendment, a nursing service rendered to an individual within a nurse-patient relationship can be exempt regardless of the location at which the service is rendered.

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. We also consider the scope of nursing to include the diagnosis and treatment of health problems, assessment of a patient's nursing needs, and the preparation of nursing care plans for the patient.

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.

That said, the issue with respect to XXXXX supply is not whether the activities performed by the RNs and RPNs constitute a nursing service rendered to an individual within a nurse-patient relationship; rather, the issue is whether the supply made by XXXXX pursuant to the Agreement is in fact a supply of nursing services. We note that the legislative amendments to section 6 of Part II of Schedule V do not change the fact that in order for section 6 to apply, the supply in question must ultimately be that of a nursing service.

Supply of nursing service vs. supply of personnel

As a transactional tax, the exemptions in the ETA apply on a 'supply-by-supply' basis. Each supply must be evaluated independently in order to determine whether a particular exemption applies, in this case section 6 of Part II of Schedule V. In considering whether section 6 applies, a distinction must be made between the activities that comprise a particular supply, and the supply itself. In this case, we accept that certain activities performed by the RNs and RPNs may amount to a nursing service rendered to an individual within a nurse-patient relationship; however, this does not necessarily translate to a supply of nursing services by XXXXX to the Client. In other words, the 'end-use' of an RN or RPN by the Client does not define the nature of the supply made by XXXXX to the Client. Whether XXXXX supply of personnel to the Client falls within section 6 is a question of fact requiring an analysis of the terms and conditions of the Agreement, keeping in mind the context in which the supply is made.

Under the Agreement, XXXXX has agreed to provide an undetermined number of qualified personnel to the Client on an 'as-needed' basis. The Agreement describes the nature of the activities to be performed by the various personnel; however, in our view, the Agreement does not result in an obligation on XXXXX part to supply specific nursing services to individuals. Instead, the terms of the Agreement suggest that XXXXX is essentially acting as a placement agency, making the arrangements for RNs, RPNs or PSWs to be assigned to the Client's facility.

Pursuant to provincial legislation, it is the Client who is ultimately responsible for the provision of care services, including nursing services, to individuals who are residents of a facility operated by the Client. XXXXX responsibility, which stems from the Agreement, is limited to the supply of personnel to the Client so that the Client may supplement its own workforce in order to comply with nurse-to-resident coverage and other operational requirements. The Agreement does not include the provision of personnel with a responsibility for the administration or management of an aspect of the Client's care operation nor does it state that XXXXX will be responsible for any particular aspect of the care operation. Although XXXXX personnel may temporarily participate in the rendering of nursing services to individuals, they are subject to the direction and control of the Client and act as inputs to the Client's supply of care services.

The Agreement between XXXXX and the Client does not cover a pre-determined time period nor does it explicitly provide that any specific RN, RPN, or PSW will render services for any appreciable period of time. The nature of this arrangement allows the Client to supplement its own workforce, as necessary, and suggests that the supply is something other than that of nursing services. This is notwithstanding the fact that XXXXX has a XXXXX Policy under which XXXXX will attempt to provide the same personnel to the same facility to the extent possible.

According to the Agreement, the consideration for the supply is based solely on the qualifications of the various personnel provided by XXXXX. A different hourly rate is charged depending on whether it is an RN, RPN, or PSW provided. The consideration is calculated by multiplying the number of hours a particular type of personnel has worked by the hourly rate applicable to that type of personnel. This method of calculating the consideration for the supply (i.e., an hourly rate based on the qualifications of the personnel) does not suggest a 'fee for nursing services', but rather it is indicative of a supply of personnel or human resources.

We note that the current version of the Agreement, XXXXX uses the term "nursing services" to describe the services (where the term "services" also encompasses personnel) to be provided by XXXXX. XXXXX:

"XXXXX."

In our view, the contractual arrangement between XXXXX and the Client remains the same. Our position that the Agreement, when looked at in its entirety, does not effectively provide for a supply of nursing services as contemplated by Section 6 of Part II of Schedule V, is notwithstanding the updates to the terminology used in the Agreement.

Finally, it is worth noting that XXXXX is in the business of providing health care personnel and describes itself as "XXXXX". The nature of XXXXX business provides a context that is consistent with the position that the supply made by XXXXX pursuant to the Agreement is that of personnel or human resources.

XXXXX.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-4289. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
Brian Olsen, CGA
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directora

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.

XXXXX
XXXXX
XXXXX
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 116571

Business Number: XXXXX

August 5, 2010

Dear XXXXX:

Subject:

GST/HST RULING
Services of Medical and Research Assistant

This is in reply to your XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to your services supplied as a sole proprietor to a medical doctor, XXXXX.

HST applies at the rate of 15% in Nova Scotia, 13% in New Brunswick, Newfoundland and Labrador, and Ontario, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

Statement of Facts

On the basis of your XXXXX and the information you filed with the Canada Revenue Agency, our understanding of the facts is as follows:

1. You are a sole proprietor who was registered for GST/HST purposes effective XXXXX.

2. You were hired by a medical doctor as an independent contractor to provide medical and research assistant services.

3. Your services are not paid for by a provincial health insurance plan.

4. Your services are not rendered within the practice of a regulated health care profession that is listed in Part II of Schedule V. iFootnote 1 For instance, you are not a "medical practitioner" or "practitioner" as those terms are defined in the ETA.

5. You are an annual filer for GST/HST purposes. XXXXX.

6. Your services are performed in the province of Ontario.

Ruling Requested

You would like to know whether your supplies of medical and research services provided to a medical practitioner are exempt under the ETA.

Ruling Given

Based on the facts set out above, we rule that your supplies of medical and research services provided to a medical practitioner are not exempt services and are therefore taxable pursuant to section 165. As your supplies are made in Ontario, the consideration charged for your supplies is subject to the HST at the rate of 13%.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

Explanation

When there is an agreement to provide specific goods and services in exchange for money, the money constitutes consideration for a supply unless the agreement could be classified as a contract for employment. We were given to understand that you do not provide the services in question under a contract for employment. Rather you are a sole proprietor working as an independent contractor.

It is important to clarify at the outset that as an independent contractor you are a separate supplier for GST/HST purposes. The GST/HST is a transactional tax system based on the concept of persons making supplies. Under this system, your services constitute a supply made to a medical practitioner that is distinct from any supply made by the medical practitioner. As such, the characterization and tax status of your supplies are evaluated separately from the supplies made by the medical practitioner.

Generally, most goods and services supplied in Canada are taxable for GST/HST purposes. Exceptions to this rule include certain health care services rendered within health care professions listed in Part II of Schedule V which are exempt when they are rendered to individuals. The exempting provisions are based on the extent that these services are covered by provincial health insurance plans as well as the provincial regulation of health care professions.

If a service is not included in the list of exemptions, then the supply of the service is taxable and the result is that the value of the consideration charged for the supply is subject to the GST/HST. Sections 221, 225 and 228 of the ETA generally provide that registrants who make taxable supplies shall collect and remit the tax (net of input tax credits and applicable adjustments).

Your services are not paid for by a provincial health insurance plan. You do not render your services within the practice of a regulated health care profession that is listed in Part II of Schedule V and your services are not health care services rendered to an individual. Rather, you are providing services as a medical and research assistant to a medical practitioner.

Please note that under the GST/HST system, the exemption that may apply to the supplies made by a medical practitioner does not necessarily extend to the medical and research services you supply to the medical practitioner. As the medical and research services you supply to a medical practitioner as a sole proprietor are not included in the list of exemptions in Schedule V your services are taxable supplies. Pursuant to section 221, you are required to collect the tax payable under Division II of the ETA by the medical practitioner, who is the recipient of your taxable supplies.

Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
Chantal Desrosiers
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

i 1. The health care professions listed in Part II of Schedule V are: medical practitioners (physicians and dentists); practitioners (optometrists, chiropractors, physiotherapists, chiropodists, podiatrists, osteopaths, audiologists, speech-language pathologists, occupational therapists, psychologists, and midwives); registered nurses; registered nursing assistants; licensed or registered practical nurses; registered psychiatric nurses; dieticians; social workers; and dental hygienists.

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UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.

XXXXX
XXXXX
XXXXX
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 106433
Attention: XXXXX XXXXX
October 26, 2010

Dear XXXXX:

Subject:

GST/HST RULING
Camp programs and XXXXX

Thank you for your letter of XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to camp programs and XXXXX.

HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.

All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.

Statement of Facts
We understand

1. XXXXX.

2. XXXXX.

3. XXXXX.

4. XXXXX.

5. XXXXX.

6. XXXXX registered for GST/HST purposes. Under its business number XXXXX has a GST/HST program account XXXXX and a registered charity program account XXXXX.

7. XXXXX The facilities and amenities available at XXXXX include campsites, lodging, dining room, lounge, cafe, chapel, playground, walking trails, XXXXX, meeting rooms, high speed wireless Internet access, public access computer terminals XXXXX, XXXXX gift shop, sport shop, public washrooms and XXXXX.

Overnight family camp programs

8. Each summer, the Charity offers overnight family camp programs at XXXXX. Families or individuals can attend camp programs for one or more nights or for one or more weeks or for the season XXXXX. The overnight family camp programs are:

• XXXXX Family Camp program with campsite/trailer/chalet suite - This program includes a campsite or housekeeping trailer or the chalet suite with kitchenette, XXXXX programming, instruction and supervision in sporting and recreational activities and use of facilities. The price for the program includes a mandatory program fee for each adult and child XXXXX and the rental of the campsite or housekeeping trailer or chalet suite. Meals are optional. Individual meals can be purchased in the café or dining room or families can prepay for a package of XXXXX meals. Staff at XXXXX prepare the meals which are sold for more than their direct cost (that is, the meal prices are calculated at cost plus a mark-up XXXXX.

• XXXXX Family Camp program with accommodation and meals - This program includes motel or lodge style accommodation, meals, XXXXX programming, instruction and supervision in sporting and recreational activities and use of facilities. The price for the program includes a mandatory program fee, a mandatory meal contract, and the rental of the accommodation. XXXXX.

• Seasonal Camp program with campsite - This program for families and individuals includes a seasonal campsite XXXXX, XXXXX programming, instruction and supervision in sporting and recreational activities and use of facilities. The price for the program includes a mandatory program fee and the rental of the campsite. Meals are optional.

9. XXXXX Children and teens have structured programming of XXXXX hours a day (XXXXX instruction and supervision and instruction in sports, crafts, games and recreational activities). There are daily activities and sports for the whole family during the afternoons. The Charity does not provide overnight supervision as the children stay in accommodations with their parents. Adults have access to XXXXX programming XXXXX as well as structured recreational activities (e.g., tennis tournaments, trail/hike interpretations, etc.). Additionally, adults and children have access to unstructured use of sporting and recreational facilities on the grounds and can attend entertainment events (e.g., movies, dramas, concerts) XXXXX.

10. Recreational activities available at XXXXX include swimming at the beach or pool (supervised by lifeguards), using the XXXXX, taking a XXXXX boat cruise, canoeing, archery, wall climbing, high ropes climbing, kayaking, fishing, and playing a variety of sports such as baseball, basketball, volleyball, soccer, lawn bowling, shuffleboard, badminton, tennis or mini-putt. Golf is available from XXXXX through XXXXX on the XXXXX golf course for an extra fee. Teens and youth can learn XXXXX, wilderness survival, fine arts and drama.

Day camp programs

11. The Charity offers a "XXXXX Day Camp" program at XXXXX during the summer season for children and youth in two age groups (grades 1-3 and grades 4-6). Each day camp runs weekly from Monday to Friday and children cannot be registered for partial days. The registration fee for the weekly day camp program includes Bible teaching, instruction and supervision in sporting and recreational activities, daily lunch and a t-shirt.

12. The Charity also offers an optional overnight sleepover for both age groups on XXXXX night for an extra fee that includes a camp-out, campfire, wagon ride and entertainment. Group leaders employed by the Charity instruct and supervise the children in various sports and recreational activities and provide the overnight supervision. XXXXX. The overnight option cannot be purchased on its own; that is, it must be purchased along with a weekly day camp program.

13. Children in grades 1-3 attending the day camp participate in a morning of skits, songs, stories, games and crafts XXXXX. Afternoons include supervision and instruction in activities such as rock-climbing, canoeing, XXXXX boat rides, sandcastle competitions, water games, sports and other fun activities.

14. Children in grades 4-6 participate in the "XXXXX Program". In the morning children participate in Bible teaching and in XXXXX of the following skills: canoeing; wilderness survival; golf; drama; archery; swimming; high ropes/climbing; active sports; arts and crafts. Afternoon activities include supervision and instruction in outdoor games, team building challenges, field games, water activities and other recreational activities.

15. While the Charity does not specifically offer a day camp program primarily to individuals who have a disability, children with special needs attending its day camps are integrated into its regular camp programs and, if necessary, additional group leaders or special needs workers may be assigned to those groups.

Conference and XXXXX Centre packages

16. The Charity operates a year-round conference and XXXXX facility for XXXXX groups, families and individuals at XXXXX. It offers the following styles of XXXXX packages:

• XXXXX Centre - The Charity provides large and small groups of families or adults with a variety of accommodation styles ranging from hotel style rooms to lodge style buildings as well as a selection of meeting rooms and buffet-style meals in the dining room. The all-inclusive price per person for this XXXXX package includes accommodations, meals, meeting room, XXXXX fee XXXXX, and usage of recreational facilities and equipment (other than those facilities and equipment for which there is a separate charge).

XXXXX Youth Camp - This XXXXX is geared towards youth groups as well as other groups requiring a more economical alternative with simpler accommodations (bunk beds) and smaller meeting rooms. Buffet-style meals are provided in the dining room. The all-inclusive price per person for this XXXXX package includes accommodations, meals, meeting room, XXXXX fee, and usage of recreational facilities and equipment (other than those facilities and equipment for which there is a separate charge). XXXXX.

17. Depending upon the time of year, conference and XXXXX guests can engage in such recreational activities as canoeing, swimming at the beach or pool, fishing, hiking, shuffleboard, lawn bowling, table tennis, paddle boats, horseshoes, baseball, basketball, volleyball, soccer, broom ball, tennis, children's playground, pool tables, campfires, mini-putt, XXXXX and cross-country skiing. The use of the recreational facilities and equipment at XXXXX is self-directed for conference and XXXXX guests; however, for a separate fee, any guest can enrol in an activity where instruction is provided. There is also a separate charge to play XXXXX, to use a watercraft, or to take a cruise or a wagon ride.

18. Conference and XXXXX groups can also choose to acquire a XXXXX Package for an extra fee. XXXXX

19. The Charity's XXXXX coordinators can also assist in the design and implementation of a personalized conference or XXXXX package for any group.

XXXXX Centre

20. During the non-summer seasons, the Charity provides a large number of school groups with its XXXXX program at XXXXX. The majority of the school groups are from grades 5 to 8 but high-school groups also attend. The students come from XXXXX schools to learn about the environment, participate in outdoor recreational activities and to develop life skills.

21. School groups choose from a list of environmental and outdoor recreational programs to undertake during their visit XXXXX. Instruction in the programs is provided by the Charity's staff at XXXXX. For overnight stays, the students are supervised in their accommodations by teachers and volunteer parents accompanying the group.

22. XXXXX

23. The price for a XXXXX night XXXXX program at XXXXX includes the programming and instruction in activities, equipment and facility use, meals and accommodation. XXXXX day-use programs are available as well. These short-term programs have been created by the Charity's staff at XXXXX and do not follow a curriculum designated by a school authority. These programs also do not qualify for a school credit.

24. A Form GST26, Election or Revocation of an Election by a Public Service Body to Have an Exempt Supply of Real Property Treated as a Taxable Supply, has not been filed in respect of the property at XXXXX.

Ruling Requested

You would like to know the application of the GST/HST to the above-described camp programs and conference and XXXXX packages offered by the Charity at XXXXX. Specifically, you ask whether or not the GST/HST applies separately on the mandatory program fees, rentals of campsites or housekeeping trailers, rentals of accommodations, mandatory meal contracts, optional meals, day camp programs, conference and XXXXX packages and XXXXX programs.

As outlined in GST/HST Memoranda Series 1.4, Excise and GST/HST Rulings and Interpretations Service, a ruling provides the Canada Revenue Agency's (CRA's) position on how the relevant provisions of the legislation apply to a clearly defined fact situation of the taxpayer. Where sufficient information and documentation has been provided regarding a transaction, we have issued a ruling.

However, as the conference and XXXXX packages supplied by the Charity may be customized to meet the specific needs of a customer, we have provided an interpretation on how the GST/HST applies to these types of supplies when made by a charity in the explanation that follows the ruling given.

Ruling Given
Based on the facts set out above, we rule that
• the following supplies made by the Charity are taxable supplies subject to the GST/HST:

- XXXXX Family Camp program with campsite or trailer or chalet suite accommodation;
- XXXXX Family Camp program with accommodation and meals;
- Seasonal Camp program with campsite;
- XXXXX programs provided primarily to children in high-school grades 10 and over;
- Optional meals; and
• the following supplies made by the Charity are exempt supplies not subject to the GST/HST:

- XXXXX weekly Day camp program provided primarily to children in grades 1 to 6;
- XXXXX weekly Day camp program with one overnight stay provided primarily to children in grades 1 to 6; and
- XXXXX programs provided primarily to children in grades 5 to 8 with no overnight supervision provided by the Charity.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

Explanation
Single supply or multiple supplies

In determining whether a supply made by the Charity of a particular program or package to a customer is a taxable supply or an exempt supply for GST/HST purposes, it is first necessary to determine whether the program or package is a single supply or consists of multiple supplies. This is important in a transaction where a combination of elements is provided to the customer, some of which could be subject to the GST/HST, and some of which could be exempt from the GST/HST, if supplied separately. The principles outlined in GST/HST Policy Statement P-077R, Single and Multiple Supplies, can be used to determine whether a particular transaction consists of a single supply or multiple supplies.

In applying the principles outlined in GST/HST Policy Statement P-077R, one must consider such factors such as the interrelationships and interdependency among the various elements of the transaction as well as the purpose of the transaction. Each transaction for a camp program or a conference and XXXXX package must be reviewed on its own to determine whether it consists of a single supply or multiple supplies.

It should be noted that the way in which the price for a program or package is set out does not in itself determine whether there exists one or more supplies. Separately identified charges for certain elements do not necessarily mean that there are two or more supplies. The structure of the transaction is examined to determine if the provision of any particular element is contingent on the provision of one or more elements. If the recipient of the supply does not have the option to acquire the elements separately, then generally, there is a single supply.

Where a program or package offers optional supplies of property or services, the program or package may generally be considered to consist of multiple supplies. Where a program or package is composed of multiple supplies for a single consideration then it must be determined if one or more of the supplies may reasonably be regarded as incidental to the primary supply.

The incidental rule under section 138 provides that an incidental supply is treated as part of the primary supply and will have the same tax status as the primary supply. In general, a supply may reasonably be regarded as an incidental supply where it is of a minor, subordinate or non-essential nature to the overall supply or is nominal in value. However, section 138 does not apply if a separately identifiable charge is made for the incidental supply.

Overnight family camp programs

The purpose of the overnight family camp programs described above is to provide a camp experience for the whole family. Guests acquiring a overnight family camp program pay consideration to attend the camp and receive programming services, including supervision and instruction in recreational and athletic activities, the right to use the camp's facilities and a particular type of overnight accommodation. Also, for an overnight family camp program with motel or lodge style accommodation (other than the chalet suite), an non-optional meal contract is included. The program fees are a mandatory component of all the family camp programs. Campsites, trailers and other accommodations cannot be acquired on their own; they are provided as an integral part of a overnight family camp program. Overnight family camp programs must be purchased as a package.

Thus, after taking into consideration the principles in GST/HST Policy Statement P-077R, the following overnight family camp programs supplied by the Charity are single supplies for GST/HST purposes:

• XXXXX Family Camp program with campsite/trailer/chalet suite
• XXXXX Family Camp program with accommodation and meals

• Seasonal Camp program with campsite.

Customers acquiring an overnight family camp program that includes a campsite, trailer or the chalet suite have the option to acquire a meal package or individual meals at the cafe or dining room. These are separate supplies for separate consideration and are not part of the single supply of an overnight family camp program that includes a campsite or trailer or the chalet suite. Information on the tax status of optional meals is provided later in the letter.

The next step is to determine whether a particular supply of an overnight family camp program made by a charity is a taxable supply or an exempt supply. Exempt supplies are listed in Schedule V and are not subject to the GST/HST.

Most supplies of property or services made by a charity are exempt supplies under section 1 of Part V.1 of Schedule V unless the supply is excluded from exemption under paragraphs (a) to (n) of that section. However, there are other provisions under Schedule V that may apply to exempt certain supplies of property or services made by a charity.

In particular, paragraph 1(f) of Part V.1 of Schedule V excludes from exemption a supply of a service involving, or a membership or other right entitling a person to, supervision or instruction in any recreational or athletic activity. However, there are two exceptions to this exclusion and the supply will be exempt where:

(i) it could reasonably be expected, given the nature of the activity or the degree of relevant skill or ability required for participation in it, that such services, memberships or rights supplied by the charity would be provided primarily (more than 50%) to children 14 years of age or under and the services are not supplied as part of, the membership is not in, or the right is not in respect of, a program involving overnight supervision throughout a substantial portion of the program; or
(ii) such services, memberships or rights supplied by the charity are intended to be provided primarily to individuals who are underprivileged or who have a disability.

Please note that paragraph 1(f) of Part V.1 of Schedule V does not specify an extent to which the service or membership or other right must involve supervision or instruction in the recreational or athletic activity. Therefore, where a camp program involves any supervision or instruction in any recreational or athletic activity, the supply by a charity will not be exempt under section 1 of Part V.1 of Schedule V unless the camp program will be provided primarily to children aged 14 years old or under and does not involve overnight supervision throughout a substantial portion of the program or the camp program will be provided primarily to individuals who are underprivileged or who have a disability. Overnight supervision would include supervision by employees or volunteers of the charity.

The family camp programs offered by the Charity are intended for, and designed for, the whole family. Supervision and instruction is provided in structured recreational and athletic activities for the adults, the children, and the whole family. Thus, the exception listed under subparagraph 1(f)(i) of Part V.1 of Schedule V will not apply as the overnight family camp programs are not intended to be provided primarily to children 14 years of age or under but are intended for families of all ages.

Even where the overnight camp programs are acquired by adults who choose not to participate in the structured recreational and athletic activities, the overnight camp programs will still be excluded from exemption under paragraph 1(f) of Part V.1 of Schedule V as the camp programs include a service involving, or a right entitling a person to, supervision or instruction in recreational or athletic activities. It is the nature of the supply being made by the charity that is key in determining its tax status and not the extent to which the customer will utilize the service of, or exercise the right to, supervision or instruction in any recreational or athletic activity.

While individuals with disabilities are accommodated in the regular family camp programs described above, the programs are not intended to be provided primarily to individuals with disabilities. Also, based on the available information regarding these camp programs, they are not intended to be provided primarily to individuals who are underprivileged. Thus, the exception listed under subparagraph 1(f)(ii) of Part V.1 of Schedule V will not apply to the Charity's supplies of the family camp programs.

Therefore, as there are no other exempting provisions in Schedule V that may apply, supplies made by the Charity of the overnight family camp programs, as described above, will be taxable supplies subject to the GST/HST.

Day camp programs

A supply made by the Charity of a weekly XXXXX Day Camp program, as described above, with no overnight supervision, is an exempt supply under section 1 of Part V.1 of Schedule V where it is provided primarily to children 14 years of age and under.

However, where a customer enters into a transaction with the Charity for the provision of a weekly day camp program with a supervised overnight sleepover, then a single supply/multiple supplies analysis must be undertaken.

Where the overnight sleepover is optional and can be acquired on its own without the acquisition of the weekly day camp program then, generally, the overnight sleepover would be a separate supply and not part of the supply of the weekly day camp program. However, based on the information provided, the acquisition of the overnight sleepover is contingent upon the acquisition of a weekly day camp program. In other words, a customer cannot acquire the overnight sleepover on its own but must acquire it together with a weekly day camp program as a package.

Thus, where the Charity makes a supply of a XXXXX weekly day camp program that includes the one supervised overnight sleepover, this is a single supply that will be an exempt supply when provided primarily to children 14 years of age or under (e.g., children in grades 1 to 6). The provision of the one supervised overnight sleepover will not exclude the supply from being exempt as one night in a 5-day weekly day camp program is not considered to be a substantial portion of the program.

XXXXX Centre

School groups attending the XXXXX Centre for a XXXXX-day XXXXX program are acquiring a supply of a program of a service involving, or a right to, supervision and instruction in environmental activities and in recreational and athletic activities. Such a supply made by a Charity will be an exempt supply under section 1 of Part V.1 of Schedule V when provided primarily to students 14 years of age and under.

The exemption under section 1 of Part V.1 of Schedule V will also apply where the Charity makes a single supply of a XXXXX day program of instruction with overnight accommodation and meals as an all-inclusive program for a single consideration where it is provided primarily to students 14 years of age or under and the overnight supervision is provided by another party (e.g., teachers of the school or volunteer parents).

However, if the supply of a XXXXX day program is provided primarily to individuals over 14 years of age (e.g., students in high school grades 10, 11 and 12) or if the program involves overnight supervision by the staff or volunteers of the Charity throughout a substantial part of the program, then the supply of the program will be excluded from exemption under paragraph 1(f) of Part V.1 of Schedule V unless the program is provided primarily to individuals who are underprivileged or who have a disability.

Where the supply of an XXXXX program provided by the Charity at the XXXXX Centre is excluded from exemption under paragraph 1(f) of Part V.1 of Schedule V, it will be a taxable supply subject to the GST/HST as there is no other exempting provision in Schedule V that will apply.

Optional meals

Where the Charity provides optional meals for a separate consideration which is not contingent on the acquisition of a family camp program, day camp program, XXXXX program or conference or XXXXX package, the meals will generally be treated as a separate supply. A supply of a meal is a supply of tangible personal property.

Paragraph 1(d) of Part V.1 of Schedule V excludes from exemption a supply of tangible personal property that was acquired, manufactured or produced by the charity for the purpose of making a supply of the property and was neither donated to the charity nor used by another person before its acquisition by the charity, or any service supplied by the charity in respect of such property, other than such property or such a service supplied by the charity under a contract for catering.

Thus, where the Charity produces and prepares meals for supply in its café or dining room, the supplies will be excluded from exemption under paragraph 1(d) of Part V.1 of Schedule V as the meals are neither used nor donated to the Charity nor supplied by the Charity under a contract for catering. For information on what is considered a catering service, please refer to GST/HST Memoranda Series 4.3, Basic Groceries, beginning with paragraph 126.

The supplies of the meals will be subject to the GST/HST unless another exempting provision in Schedule V applies. However, the Charity's supplies of meals for more than direct cost provided in its café or dining room that it operates on a regular basis throughout the year will not be exempt supplies under any other provision in Schedule V and, therefore, will be taxable supplies subject to the GST/HST.

Interpretation Given
XXXXX Centre conference and XXXXX packages

As with the supplies of the family camp programs, each particular conference and XXXXX package must be reviewed on its own to determine whether the package consists of a single supply or multiple supplies. Then the tax status is determined for each supply.

Based on the information available, a XXXXX Centre package or a XXXXX Youth Camp XXXXX package includes, for an all-inclusive price per person, the following: a meeting room; accommodations; meals in the dining room; and self-directed use of recreational facilities and equipment (other than those facilities and equipment requiring a separate fee). Optional goods and services, such as rounds of golf and a XXXXX package with instruction and supervision in recreational activities, can be acquired for an additional fee per person.

Where a charity makes a supply of a conference and XXXXX package that includes a meeting room, accommodations, meals and self-directed use of recreational facilities and equipment and all these elements must be purchased together as an all-inclusive package for a single consideration, then generally it will be considered a single supply of real property by way of lease, licence or similar arrangement.

Supplies of real property by way of lease, licence or similar arrangement by a charity will be exempt supplies under section 1 of Part V.1 of Schedule V unless the charity has made an election under section 211 to treat supplies of the real property as taxable by filing Form GST26 in respect of the property. Also, the exemption under section 1 of Part V.1 of Schedule V applies to any goods (e.g., tables, chairs, audio-visual equipment, etc.) that are provided as part of the single supply of the real property by way of lease, licence or similar arrangement. However, any optional goods and services supplied for separately identifiable consideration will generally be separate supplies and the tax status is to be determined for each of those supplies.

Please note, that as a conference and XXXXX package can be tailored to the customer's needs, the nature of the supply of the package may not always be a supply of real property by way of lease, licence or similar arrangement. For instance, where the Charity provides a conference and XXXXX package where the dominant element is the provision of a service of XXXXX instruction by the Charity, then the supply will generally be that of a service rather than a supply of real property even where the use of a meeting room and accommodation may be provided in the package.

In addition, a personalized conference and XXXXX package may be in the nature of a camp program where supervision or instruction in any recreational or athletic activities is provided as well as XXXXX instruction. In this situation, the supply of such a package may be excluded from exemption under paragraph 1(f) of Part V.1 of Schedule V.

HST

In general, the HST at the rate of 13% (5% federal part and 8% provincial part) applies to taxable (other than zero-rated) supplies of property and services made in Ontario for which consideration becomes due, or is paid without having become due, on or after July 1, 2010.

Supplies of property and services made by charities that are exempt for GST purposes will also be exempt supplies for HST purposes. Supplies of property and services that are taxable for GST purposes will also be taxable for HST purposes. As a result, charities that are GST/HST registrants will generally have to collect the HST on all taxable (other than zero-rated) supplies of property and services that they provide to their customers effective July 1, 2010.

A charity is entitled to claim public service bodies' rebate of 50% of the GST or the federal part of the HST on eligible purchases. A charity resident in Ontario is entitled to claim a public service bodies' rebate of 82% of the provincial part of the HST on eligible purchases.

Please note that while the HST came into effect in Ontario on July 1, 2010, there are transitional rules that apply to transactions that straddle the July 1, 2010, implementation date for the HST.

Certain non-consumers, including charities, may be required to self-assess the provincial part of the HST when they purchase taxable property or services to be provided on or after July 1, 2010, and consideration for the property or services became due, or was paid without having become due, after October 14, 2009 and before May 2010. Also, suppliers in Ontario, including charities, are generally required to charge the HST on consideration that becomes due, or is paid without having become due, on or after May 1, 2010, and before July 2010, for taxable supplies of property or services to be provided after June 2010.

More information on the HST in Ontario is available in various publications available on the CRA Web site including the following:

• GST/HST Notice 253, Harmonized Sales Tax for Ontario and British Columbia - Questions and Answers for Public Service Bodies;
• GST/HST Notice 247, Harmonized Sales Tax for Ontario and British Columbia - Questions and Answers on General Transitional Rules for Personal Property and Services;
• GST/HST Info Sheet GI-060, Harmonized Sales Tax for Ontario - Point-of-Sale Rebate on Newspapers;
• GST/HST Info Sheet GI-063, Harmonized Sales Tax for Ontario and British Columbia - Point-of-Sale Rebate on Children's Goods;
• GST/HST Info Sheet GI-064, Harmonized Sales Tax for Ontario - Point-of-Sale Rebate on Prepared Food and Beverages;
• GST/HST Info Sheet GI-065, Harmonized Sales Tax for Ontario and British Columbia - Point-of-Sale Rebate on Books; and
• GST/HST Info Sheet GI-106, Ontario First Nations Point-of-Sale Relief - Reporting Requirements for GST/HST Registrant Suppliers.

For more information on the tax status of various supplies made by charities, please refer to the GST/HST guide RC4082, GST/HST Information for Charities.

Other Information

Branches or divisions that are part of one legal entity (e.g., a corporation) cannot register separately for GST/HST purposes. If a corporation has to register, or registers voluntarily, it has to do so as a single entity. When the corporation registers with the CRA, it is issued a 9-digit business number (BN) that identifies the corporation. The BN is unique to that corporation and will always be the first nine digits of any account number that it has with the CRA (e.g., Registered Charity Account Number 123456789 RR0001, GST/HST Account Number 123456789 RT0001, Payroll Account Number 123456789 RP0001, etc.).

A corporation with branches or divisions can apply to have its branches or divisions file separate GST/HST returns and public service body rebate applications. Each branch or division has to be identifiable by either its location or the nature of its activities, and must keep separate books and records. Also, a corporation that is a charity may apply to have each branch or division with $50,000 or less in taxable supplies designated as a small supplier division. Information on these applications is available in GST/HST Memoranda Series 2.4, Branches and Divisions.

XXXXX.

XXXXX.

The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-9592. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
Nadine Kennedy
Charities, Non-profit Organizations and Educational Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX

UNCLASSIFIED

Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.

Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
XXXXX
XXXXX
XXXXX
Case Number: 108285
Attention: XXXXX XXXXX
Business Number: XXXXX

March 22, 2010

Dear XXXXX:

Subject:

GST/HST RULING
Applied Behaviour Analysis and Intensive Behavioural
Intervention Therapy - Children with Autism Spectrum Disorders

Thank you for your letter of XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the provision of Intensive Behavioural Intervention (IBI) Therapy and Applied Behaviour Analysis (ABA) by XXXXX ("Corporation") to children with Autism Spectrum Disorders (ASD) and developmental disabilities. As you know, your letter was transferred to this office from our XXXXX GST/HST Rulings Centre for reply. We apologize for the delay in this response.

XXXXX.

XXXXX.

The following is based on the information you provided in your letter and subsequent correspondence, as well as that provided during your telephone conversations with me and Danette Smith of this office. XXXXX.

All legislative references are to the ETA unless otherwise specified.

Statement of Facts

We understand the following:

1. The Corporation operates a facility located in XXXXX ("Centre").

2. The Corporation is a GST/HST registrant.

3. The Corporation helps children with ASD and other related disorders through the use of IBI and/or ABA. XXXXX.

4. The Corporation offers a range of ABA therapy services through its XXXXX programs. XXXXX.

5. The XXXXX programs are targeted towards the cognitive skills; behaviour/regulation skills; communication skills; speech and language development; augmentative communication; play and social skills; motor skills and self-help skills of children.

6. These programs are individualized to meet each child's needs and involve the continuous assessment of a child's skills and program development; integration of technology and fine/gross motor tools when appropriate; the collaboration with outside professionals as needed; and on-going data collection.

7. Staff at the Corporation is highly trained in the application of ABA principles to remediate a child's behaviour, speech, language, communication, social cognitive, play skills and activities of daily living. The Corporation uses the skills of its staff members to provide ABA therapy services under its XXXXX programs as follows:

ABA Therapists

XXXXX.

XXXXX.

Senior ABA Therapists

XXXXX.

ABA Clinical Supervisor

XXXXX.

XXXXX.

8. The Corporation enters into a XXXXX ("Contract") with clients XXXXX for the provision of ABA therapy services under its XXXXX programs. A generic Contract was provided for our review. The Contract stipulates the terms and conditions of providing ABA therapy services and what clients can expect from the Corporation in relation to the provision of these services. XXXXX:

• XXXXX.

• XXXXX.

• XXXXX.

As well, specific services, which are integral to the program, will be provided and the corresponding fees levied:

• XXXXX.

• XXXXX.

• XXXXX.

XXXXX.

XXXXX.

XXXXX.

It states that according to Ministry guidelines XXXXX.

XXXXX.

9. XXXXX:

XXXXX.

10. The Corporation completes and/or has its clients complete the following forms, as required:

XXXXX.

11. XXXXX.

Rulings Requested

You would like to know:

1. Whether the Corporation is required to charge the GST on the supply of its ABA therapy services provided through its XXXXX programs to clients that do not receive XXXXX funding XXXXX.

2. Whether the Corporation is required to charge the GST on the supply of its ABA therapy services provided through its XXXXX programs to clients that receive XXXXX funding XXXXX.

3. What is the procedure for discounting GST charges, if appropriate, and what are the other procedures that the Corporation must follow relating to the reimbursement for GST charges to clients that have already settled their invoices.

4. What is the procedure for filing the Corporation's next quarterly GST return if there are changes to the GST charges during that time period.

Rulings Given

Based on the facts set out above, we rule that:

1. The Corporation is not required to charge the GST on the supply of its ABA therapy services provided through its XXXXX programs to clients that do not receive XXXXX funding XXXXX provided paragraph 14(i) of Part II of Schedule V is met.

2. The Corporation is not required to charge the GST on the supply of its ABA therapy services provided through its XXXXX programs to clients that receive XXXXX funding XXXXX provided subparagraph 14(iii)(c) of Part II of Schedule V is met.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

We are unable to provide you with a ruling for your remaining two questions because they do not relate to specific factual situations. However, we have provided the following interpretations on the subject raised in these questions.

INTERPRETATIONS GIVEN

1. Where clients have paid an amount as or on account of the GST in error to the Corporation with respect to its supply of ABA therapy services made through its XXXXX programs on or after February 26, 2008, clients may request a refund or credit of the amounts from the Corporation, subject to the conditions and time limitations provided in section 232. Further information on the time limitations and conditions for claiming refunds and credits is available in GST/HST Memoranda Series Chapter 12.2, Refund, Adjustment, or Credit of the GST/HST under Section 232 of the Excise Tax Act.

2. Alternatively, clients may apply for a rebate of those amounts from the CRA subject to the conditions and time limitations of section 261. It should be noted that a rebate application made under section 261 cannot include amounts that were paid in error more than two years before the application is filed. If a refund is paid or a credit is issued by the Corporation, clients are not eligible to file a rebate application under section 261 for that same amount. Further information on filing a rebate application for tax paid in error is available in guide RC4033, GST/HST General Application for GST/HST Rebates. Both publications are available on the CRA Web site.

Where the Corporation has refunded or credited the excess amount within two years after the day on which it was collected, it may deduct the amount on line 107 of its GST/HST return in determining its net tax for the reporting period in which the credit note was issued. The Corporation must maintain documentary evidence to support this deduction.

Explanation

Generally a supply made in Canada is subject to the GST at a rate of 5% or the HST at a rate of 13% if the supply is made in a participating province (Nova Scotia, New Brunswick, Newfoundland and Labrador) (and Ontario at the rate of 13% and British Columbia at the rate of 12% effective July 1, 2010), unless the supply is exempt or zero-rated. Schedule V enumerates supplies that are exempt of the GST/HST.

Section 14 of Part II of Schedule V exempts the following supplies made after February 26, 2008:

"14. A supply (other than a zero-rated supply or a prescribed supply) of a training service if

(a) the training is specially designed to assist individuals with a disorder or disability in coping with the effects of the disorder or disability or to alleviate or eliminate those effects and is given to a particular individual with the disorder or disability or to another individual who provides personal care or supervision to the particular individual otherwise than in a professional capacity; and
(b) one of the following circumstances exists:

(i) a person acting in the capacity of a practitioner, medical practitioner, social worker or registered nurse, and in the course of a professional-client relationship between the person and the particular individual, has certified in writing that the training is an appropriate means to assist the particular individual in coping with the effects of the disorder or disability or to alleviate or eliminate those effects,
(ii) a prescribed person, or a member of a prescribed class of persons, has, subject to prescribed circumstances or conditions, certified in writing that the training is an appropriate means to assist the particular individual in coping with the effects of the disorder or disability or to alleviate or eliminate those effects, or
(iii) the supplier
(A) is a government,
(B) is paid an amount to make the supply by a government or organization administering a government program targeted at assisting individuals with a disorder or disability, or
(C) receives evidence satisfactory to the Minister that, for the purpose of the acquisition of the service, an amount has been paid or is payable to a person by a government or organization administering a government program targeted at assisting individuals with a disorder or disability."

Subsection 123(1) defines "government" as "Her Majesty in right of Canada or a province".

The expression "practitioner" is defined in section 1 of Part II of Schedule V which states:

"practitioner", in respect of a supply of optometric, chiropractic, physiotherapy, chiropodic, podiatric, osteopathic, audiological, speech-language pathology, occupational therapy, psychological, midwifery or dietetic services, means a person who
(a) practises the profession of optometry, chiropractic, physiotherapy, chiropody, podiatry, osteopathy, audiology, speech-language pathology, occupational therapy, psychology, midwifery or dietetics, as the case may be,
(b) where the person is required to be licensed or otherwise certified to practise the profession in the province in which the service is supplied, is so licensed or certified, and
(c) where the person is not required to be licensed or otherwise certified to practise the profession in that province, has the qualifications equivalent to those necessary to be so licensed or otherwise certified in another province."

Section 1 of Part II of Schedule V defines "medical practitioner" as "a person who is entitled under the laws of a province to practise the profession of medicine or dentistry".

Section 15 of Part II of Schedule V states:

"15. For the purposes of section 14, a training service does not include training that is similar to the training ordinarily given to individuals who
(a) do not have a disorder or disability; and
(b) do not provide personal care or supervision to an individual with a disorder or disability."

The Corporation provides ABA therapy services to children through its XXXXX programs. XXXXX. The Corporation charges its clients a separate fee for each of these different elements. Where ABA therapy is provided through the XXXXX program, the Corporation also charges its clients a fee for XXXXX.

Generally, where a transaction consists of a number of different elements, such as those just described, it must be determined whether those elements are inputs consumed or used in the course of making a single supply or whether they are multiple supplies. If a transaction involves multiple supplies, it is then necessary to characterize and determine the tax status of each supply. Some of those supplies may be subject to the GST/HST and some may exempt of the GST/HST. On the other hand, if it is found that a single supply exists, the characterization and tax status of that supply must be determined. In this case, the characterization of a supply is dependent upon the nature of the Contract between the Corporation and its clients (e.g., parents/guardians of a child with ASD or developmental disabilities).

To establish whether the elements of ABA therapy services provided by the Corporation through its XXXXX programs constitute a single supply of a training service that falls under section 14 of Part II of Schedule V, the principles set out in GST/HST Policy Statement P-077R2, Single and Multiple Supplies (P-077R2) were applied to the facts of each program respectively.

Having applied those principles, it is our view that each of the elements utilized by the Corporation in the provision of ABA therapy services under its XXXXX programs are integral components of a single supply. The additional fees described in XXXXX are considered to be part of the consideration for the supply of the training service.

Further, it is our view that the provision of ABA therapy services by the Corporation through the XXXXX programs constitutes supplies of training services described in section 14 of Part II of Schedule V.

While section 14 of Part II of Schedule V exempts the supply of a training service, it contains several requirements that must be met in order for a supply of a training service to be exempt. As such, the determination of whether the supply of ABA therapy services through the XXXXX programs by the Corporation is exempt under this provision can only be made on a case-by-case basis. Therefore, each Contract entered into between the Corporation and a client would have to be reviewed to determine whether these requirements are met.

As a general guide to making this determination, we offer the following examples to illustrate how section 14 of Part II of Schedule V would generally apply.

Example 1: If a supplier provides a training service that falls under paragraph 14(a) and a physician has certified that the individual with the disorder or disability requires that training service, the supply of the training service would be exempt under section 14 of Part II of Schedule V because the training service is being supplied in the circumstance described under subparagraph 14(b)(i).

Example 2: If a supplier provides a training service that falls under paragraph 14(a) and the supplier receives satisfactory evidence that the person paying for the training service receives an amount from a government or organization administering a government program targeted at assisting individuals with a disorder or disability for the purposes of acquiring the training service, the supply of the training service would be exempt under section 14 of Part II of Schedule V because the training service is being supplied in the circumstance described under clause 14(b)(iii)(C).

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-4395. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,
Lynn Fournier Renner
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

UNCLASSIFIED