Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 150099a
Business Number: […]
Dear [Client]:
Subject: GST/HST RULING
Application of the GST/HST to the supply of a service of providing care, supervision and a place of residence to an individual with a disability.
We […][are writing about] the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the operation of […][ABC], […]
The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island and 15% in Nova Scotia. The GST applies in the rest of Canada at the rate of 5%.
STATEMENT OF FACTS
Based on information you provided […]; information gathered from public websites; and our conversation of [mm/dd/yyyy], we understand the following:
1. [ABC] is the operating name for the legal entity known as […] (the Corporation).
2. The Corporation is registered for purposes of the GST/HST under Business Number […].
3. The Corporation is licensed […] under the provisions of The Personal Care Homes Act (the Act) and its Regulations to operate a personal care home at […] (the Facility) in the Province of Saskatchewan with a total occupancy of [#] persons. The Corporation must operate in accordance with the most recent edition of the Licensees’ Handbook: Personal Care Homes (the Handbook), published by the Ministry.
4. The Act defines the term personal care home, states the conditions for operating a personal care home and allows for regulations to be made for certain purposes. It states (in part):
“2 In this Act,
(e) “personal care home” means a facility that provides
(i) accommodation and meals; and
(ii) supervision or assistance with personal care;
to an adult who is not a relative of the person who operates the facility, but does not include any facility:
(iii) designated as a special-care home pursuant to The Regional Health Services Act;
(iv) for which a licence or certificate of approval is issued pursuant to The Residential Services Act;
(v) that is a facility within the meaning of The Mental Health Services Act;
(vi) that has been designated as a hospital or a health centre pursuant to The Regional Health Services Act;
(vii) that is a facility used by the cancer agency continued pursuant to The Cancer Agency Act;
(viii) Repealed. 2002, c.R-8.2, s.110.
(ix) that is designated in the regulations.
3 No person shall operate or cause to be operated a personal care home unless that person holds a licence authorizing him or her to do so.”
19 The Lieutenant Governor in Council may make regulations:
(a) classifying personal care homes for the purpose of the regulations;
(a.1) authorizing the publication of, or the provision of public access to, information respecting inspections of personal care homes, including the contents of an inspection report and information respecting a licensee’s compliance or non-compliance with any Act or regulation;
(a.2) prescribing the period within which the information mentioned in clause (a.1) may be published or public access may be given;
(a.3) governing the manner of publication or provision of public access to the information mentioned in clause (a.1);
(b) establishing standards for the construction, operation and maintenance of personal care homes;
(c) designating any facility for the purposes of subclause 2(e)(ix);
(d) respecting the eligibility of, and criteria to be met by, applicants for licences;
(e) respecting the terms and conditions to be contained in licences;
(e.1) for the purposes of subsection 8.1(3), prescribing categories of existing personal care homes and requiring the licensees of personal care homes in those categories, on and from a prescribed date, to provide a bond or other security;
(e.2) prescribing and governing the form and amount of a bond or other security to be provided pursuant to section 8.1;
(e.3) governing recourse to a security in any form other than a bond;
(f) respecting eligibility for residence in personal care homes;
(g) respecting the accommodation, services and programs to be made available to residents of personal care homes;
(h) respecting the number of individuals who may reside in a personal care home;
(i) respecting the personnel requirements for personal care homes and qualifications of persons who operate or provide services in personal care homes;
(j) establishing and protecting the rights and privileges of persons who reside in personal care homes;
(k) respecting the records to be kept by persons who operate personal care homes;
(l) respecting the confidentiality of information concerning personal care homes and operators of personal care homes;
(m) respecting agreements between persons who operate personal care homes and residents of personal care homes;
(n) establishing standards respecting fire protection;
(o) establishing application fees for licences;
(p) defining, enlarging or restricting any term or expression used in this Act but not defined in this Act;
(p.1) prescribing any other matter or thing that is required or authorized by this Act to be prescribed in the regulations;
(q) respecting any other matter that the Lieutenant Governor in Council considers necessary to carry out this Act according to its intent.”
5. The Personal Care Homes Regulations to the Act defines terms relevant to the definition of personal care home and sets out obligations and responsibilities of a person licensed to operate a personal care home. It states (in part):
“2(1) In these regulations:
(b) “activities of daily living” includes but is not limited to, the following activities:
(i) eating;
(ii) bathing;
(iii) dressing;
(iv) grooming;
(v) participating in social and recreational activities.
(h) “care” means the provision of personal care, specialized care or both
personal care and specialized care to a resident;
(r) “personal care” means direct assistance to, or supervision of, a resident in performing activities of daily living, including the administration of medication, but does not include specialized care.
(v) “specialized care” means health care services provided by health care professionals that are required by a resident, but does not include personal care;
7 The licensee of a home is responsible for the care management and administration
of the home.
15(1) A licensee must develop a care plan for each resident within seven days after the resident is admitted to the home.
15(2) A care plan must identify the types of assistance or supervision that the resident needs in all activities of daily living and must address the physical, cognitive, emotional, social and spiritual needs of the resident.
17(1) A licensee shall ensure that:
(a) a written admission agreement respecting the terms and conditions of residence in the home is entered into between the licensee and the resident;
(b) the admission agreement provides for:
(i) the care, service and type of accommodation that the licensee agrees to give to the resident, including services required pursuant to the Act and these regulations;
(ii) the rights and privileges of the resident other than those listed in section 34;
(iii) the responsibilities of the resident and the resident’s supporter;
(iv) the rules of the home;
(v) payment for the residency, including:
(A) the monthly, weekly or daily rate for services rendered or care and accommodation provided to the resident;
(B) the method of payment for the services, care and accommodation mentioned in paragraph (A) and the date on which payment is due;
(C) any charges for incidental services;
(D) any charges made when the resident is temporarily absent from the home;
(E) an explanation of the rate mentioned in paragraph (A) and the charges mentioned in paragraphs (C) and (D) as those rates and charges relate to the care to be provided to the resident;
(F) conditions under which refunds of rates and charges will be made;
(vi) details of insurance coverage of the home with respect to the possessions of the resident;
(vii) the term of the admission agreement;
(viii) the alteration or renewal of the admission agreement; and
(ix) the dating and execution of the admission agreement by the licensee and the resident within seven days after admission of the resident into the home; and
(c) an original of the admission agreement is provided to the resident and, at the resident’s request, to the resident’s supporter.
22(1) A licensee shall provide the care to residents that is required to meet the
individual needs of each resident.”
6. A sample […] Agreement (the Agreement) has been provided for our review. The Agreement is between the Licensee (the Corporation) and the Resident. It states (in part) […] [the obligations of the [Corporation] such as accommodation, meals, services and care provided and the obligations of the resident such as resident fees]
7. The Corporation began accepting residents on [mm/dd/yyyy].
8. The Facility consists of:
* a kitchen and dining area;
* a nursing area which contains a nursing desk, secure medication room and consultation room;
* an activity room and large common room for entertainment and church services;
* accommodation areas described as […];
* administrative areas; and
* a fenced in courtyard.
9. All of the Facility’s exterior doors are equipped with wander guard alarms. Residents are not permitted to leave the facility unattended.
10. The Facility’s staff includes a nursing care supervisor, care aides, and cooks. The nursing care supervisor is responsible for the residents’ medications and treatments (as a doctor or nurse practitioner has ordered); she arranges their doctor appointments and scheduled lab draws; and arranges for refills of their medications. The care staff is responsible for monitoring residents’ blood pressure, constipation, height and weight; for meeting their personal care and emotional needs; and assisting with their spiritual, exercise, and recreational programs. The cooks must follow Canada’s Food Guide and be knowledgeable in managing special diets such as diabetic and cardiac diets. You stated the staff have the Personal Care Worker Course taught by St. John Ambulance; CPR and First Aid; and must know how to operate the automated external defibrillators on site.
11. As of [mm/dd/yyyy], the Corporation provides services to [#] persons who are residents of the Facility. A resident’s stay at the Facility is intended to be a long-term living arrangement. However, residents will require alternate living arrangements if they require a higher level of care which the Corporation cannot provide.
12. The residents range in age […]. You have stated, “… all of the residents of the home require assistance with their activities of daily living.” You have provided a diagnosis for each resident that supports your statement. You have also confirmed that the impairment of each resident has lasted or is expected to last for at least 12 months.
13. You have stated that the Corporation is licensed to offer Level 1 - Light and Level 2 - Intermediate personal care to residents. These terms are defined in […], a document published by the Ministry, to mean:
“5. Light Care
* Resident is independent with personal care. May need reminders and cueing.
* Minimal specialized care (e.g. supervising a resident with their own specialized care).
* Independent with transfers and mobility.
6. Intermediate Care
* Supervision of behaviour.
* Supervision and some assistance with personal care.
* Assistance with specialized care.
* Supervision and/or one person assist transfers and/or mobility.”
RULING REQUESTED
You would like to know if the supply made by the Corporation to a resident of the Facility is an exempt supply for purposes of the GST/HST.
RULING GIVEN
Based on the facts set out above, we rule that the supply made by the Corporation to a person with a disability of accommodation, meals, services and care pursuant to the Agreement is an exempt supply pursuant to section 2 of Part IV of Schedule V to the Excise Tax Act (ETA). Section 2 of Part IV of Schedule V to the ETA exempts a supply of a service of providing care, supervision and a place of residence to children, underprivileged individuals or individuals with a disability in an establishment operated by the supplier for the purpose of providing such service.
EXPLANATION
The supply made by the Corporation to a resident of the Facility pursuant to the Agreement is a single supply of a service of providing care, supervision and a place of residence in an establishment that is operated for the purpose of providing care, supervision and a place of residence to individuals with a disability. This conclusion is supported by the terms of the Agreement between the Corporation and the Resident, and the requirements of the Corporation’s license under provisions of the Act and its Regulations to operate a personal care home in the Province of Saskatchewan.
It is a question of fact if the service is being provided to an individual with a disability and this determination needs to be made on a supply-by-supply (i.e. case-by-case) basis. The CRA’s interpretation of the term “disability” is that it generally refers to a long-term impairment that restricts an individual in carrying out his or her activities of daily living. You have confirmed that as of [mm/dd/yyyy], all residents of the Facility are individuals with a disability. You have provided sufficient documentation for us to conclude that each of these residents has an impairment and because of that impairment is restricted in carrying out the activities of daily living. You have also confirmed that the impairment of each resident has lasted or is expected to last for at least 12 months.
ADDITIONAL INFORMATION
Your request for a ruling of [mm/dd/yyyy], indicated that you required information on whether or not the Corporation is required to be registered for purposes of the GST/HST. As we are not sure what supplies the Corporation makes other than those discussed in this letter we are not able to answer the question of registration definitively. However, we are providing you with the following information which should help you determine whether the Corporation should be registered for purposes of the GST/HST.
Every person who makes a taxable supply in Canada in the course of a commercial activity engaged in by the person in Canada must register for the GST/HST, except where:
* the person is a small supplier;
* the only commercial activity of the person is the making of supplies of real property by way of sale otherwise than in the course of a business; or
* the person is a non-resident person who does not carry on any business in Canada.
A person is not engaged in a commercial activity and is not required or permitted to be registered for the GST/HST where that person is making only exempt supplies.
A person is a small supplier during any particular calendar quarter and the following month if the total value of the consideration for world-wide taxable supplies, including zero-rated supplies, made by the person (or an associate of the person at the beginning of the particular calendar quarter) that became due, or was paid without becoming due, in the previous four calendar quarters does not exceed $30,000 or, where the person is a public service body, $50,000.
The CRA may, after giving reasonable notice in writing, cancel the registration of a person, provided the CRA is satisfied that the registration is no longer required. An application to request the cancellation of a GST/HST registration number can be made by using form RC145, Request to Close Business Number (BN) Accounts. Alternatively, a person may request the cancellation of their GST/HST registration by contacting our Business Enquiries line at 1-800-959-5525. The following information must be supplied to the CRA:
* the reason for the cancellation request,
* the effective dates of registration and cancellation,
* a statement that all commercial activity has ceased or that the person is a small supplier, and
* the signature of the registrant or an authorized person or, when cancelling by telephone, confirmation that the person is authorized.
Further information on closing your GST/HST account can be found in GST/HST Memorandum 2.7, Cancellation of Registration published on the CRA's website at www.cra-arc.gc.ca.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the CRA is bound by the rulings given in this letter provided that: none of the issues discussed in the rulings are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 952-0420. 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,
Trent MacDonald
Charities and Non-profit Organizations Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
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