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.
GST/HST Rulings Directorate
Place de Ville, Tower A, 5th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 234908
Business Number: […]
Dear [Client]:
Subject: GST/HST INTERPRETATION
Application of GST/HST to supplies of counselling services and social support services
Thank you for your correspondence of [mm/dd/yyyy], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to supplies of counselling services and social support services where some of the services are provided to Indigenous People. We apologize for the delay in this response.
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
We understand the following:
1. […][The Corporation] is an incorporated private clinic located in […], Ontario, providing mental health and counselling services […].
2. The Corporation’s business number is […].
3. The Corporation […][offers services]: individual therapy, couples’ therapy, and group therapy, for the following issue areas:
[…]
4. […][Description of services offered]
5. […][Additional information about services offered]
6. […]
7. The Corporation employs social workers and licensed psychotherapists as both full-time employees and as independent contractors. […].
8. The social workers are required to be registered and in good standing with the Ontario College of Social Workers and Social Service Workers (the College), and the psychotherapists are required to be registered and in good standing with the College of Registered Psychotherapists of Ontario (the CRPO).
9. The Corporation also provides some services via Telehealth to residents in the province of Manitoba, […] (the “Telehealth Services”).
10. The Telehealth Services, Individual Therapy, Couples Therapy, and Group Therapy are collectively referred to as the “Clinical Counselling Services”.
11. The Corporation is an approved provider for Health Canada’s First Nations and Inuit Health Branch, and provides counselling to individuals and families eligible for coverage under the Non-insured Health Benefits (NIHB) program and the Indian Residential Schools Resolution Health Support Program (IRS).
12. […], the Corporation […][provides] emergency response social work services […] (the “On Call Crisis Social Support Work”).
13. The On Call Crisis Social Support Work […][is] 24/7 on call social service support […]. The Corporation […][provides] crisis debriefing, suicide assessment, welfare checks (including child welfare and physical welfare checks), substance use intervention (including the administration of Naloxone in the case of opioid overdose), and intimate partner violence/domestic violence de-escalation.
14. The On Call Crisis Social Support Work was provided by individuals trained as social service workers and/or who have employment and/or employment history in the community within a social service capacity.
INTERPRETATION REQUESTED
You would like to know the application of the GST/HST to the following:
1. The Clinical Counselling Services; and
2. The On Call Crisis Social Support Work.
INTERPRETATION GIVEN
Generally, all supplies of goods and services made in Canada are taxable unless an exemption from the GST/HST applies. Taxable supplies are supplies made in the course of a commercial activity and may be taxable at the rate of 0% (zero-rated supplies), 5%, 13%, or 15% on the value of the consideration for the supply depending on the province in which the supply is made. Zero-rated supplies are included in Schedule VI. Exempt supplies are not subject to the GST/HST and are included in Schedule V.
Part II of Schedule V sets out the health care services that are exempt from GST/HST. A supply of a health care service rendered by a health care professional that is not included in Part II is generally subject to GST/HST.
Services by social workers
Section 7.2 of Part II of Schedule V exempts certain supplies of services rendered in the practice of the profession of social work. In particular, section 7.2 exempts a supply of a service rendered in the practice of the profession of social work where the service is rendered to an individual within a professional-client relationship between the particular individual who renders the service and the individual and is provided for the prevention, assessment or remediation of, or to assist the individual in coping with, a physical, emotional, behavioural or mental disorder or disability of the individual or of another individual to whom the individual is related or to whom the individual provides care or supervision otherwise than in a professional capacity.
Section 7.2 further requires that either:
(i) if the particular individual is required to be licensed or otherwise certified to practise the profession of social work in the province in which the service is supplied, the particular individual is so licensed or certified, or
(ii) if the particular individual is not required to be licensed or otherwise certified to practise that profession in that province, the particular individual has the qualifications equivalent to those necessary to be licensed or certified to practise that profession in a province in which such a requirement exists.
In addition to meeting all of the requirements in section 7.2 of Part II of Schedule V, as described above, to be exempt from GST/HST, the supply of services rendered in the practice of the profession of social work cannot be a cosmetic service supply and must be a qualifying health care supply pursuant to sections 1.1 and 1.2 of Part II of Schedule V, respectively. (Footnote 1)
Services by psychotherapists
Currently, there is no provision in the ETA that specifically exempts from the GST/HST supplies of psychotherapy services or services rendered by a psychotherapist, even if the psychotherapist is licensed and renders the service in a province that regulates the profession of psychotherapy.
However, where a registered social worker provides supplies of psychotherapy services within the scope of practice of social work, the exemption applicable to services by a social worker in section 7.2 would apply where the conditions discussed above are met.
The Clinical Counselling Services
Individual Therapy, Couples’ Therapy, and Group Therapy
Section 7.2 of Part II of Schedule V exempts a supply of a service rendered in the practice of the profession of social work where, among other requirements, the service is provided for the prevention, assessment or remediation of, or to assist the individual in coping with, a physical, emotional, behavioural, or mental disorder or disability. This exemption applies not only to services rendered to the individual who is affected but also to any other individual who is a relative or caregiver (otherwise than in a professional capacity) of the individual suffering from the disorder.
As such, where the conditions of section 7.2 of Part II of Schedule V are met, counselling and/or therapy provided to individuals, couples, or families by a registered social worker within their scope of practice would be exempt pursuant to that section. Counselling and/or therapy provided to groups other than families by a registered social worker within their scope of practice may also be exempt where a professional-client relationship is established and maintained between the social worker and each individual within the group.
Where these counselling services are provided by a registered psychotherapist, these services would be subject to the GST/HST at the applicable rate as explained above.
The On Call Crisis Social Support Work
You have indicated that the On Call Crisis Social Support Work was provided by “individuals trained as social service workers and/or who have employment and/or employment history in the community within a social service capacity”.
If these individuals are licensed social workers, then these services would likely be exempt under section 7.2 of Part II of Schedule V given that the services are rendered to individuals and provided for the prevention, assessment or remediation of, or to assist the individual in coping with, a physical, emotional, behavioural or mental disorder or disability of the individual or of another individual to whom the individual is related or to whom the individual provides care or supervision otherwise than in a professional capacity.
If these individuals are not licensed social workers registered with the Province of Ontario or another province, or another provider of exempt services listed in Part II of Schedule V (Footnote 2) working within their scope of practice, then the services would be subject to the GST/HST at the applicable rate.
Telehealth services
As stated above, you have indicated that the Corporation provides some services via Telehealth to residents in the province of Manitoba, […].
Where the telehealth services provided fall within the scope of practice of the profession of social work in Manitoba, as determined by the provincial legislative framework, and are rendered to an individual within a professional-client relationship between the particular individual who renders the service and the individual, and where all other requirements of section 7.2 of Part II of Schedule V are met, then these services could be exempt pursuant to that section.
It is important to keep in mind that the tax treatment of a supply will be affected by certain registration requirements where rendered in the practice of the profession of social work by an individual licensed in a different province.
You can contact the Manitoba College of Social Workers for greater certainty. You can also refer to the Manitoba College of Social Workers By-Law and the Temporary Social Worker Policy for detailed information on the regulatory framework (Footnote 3) .
Our understanding of the rules suggests that in Manitoba, the tax treatment of such a supply will depend on how many days the supplier practises the profession of social work in Manitoba or with clients from Manitoba, even virtually via electronic means.
If the supplier practises the profession of social work in Manitoba or with clients from Manitoba between 1-5 days within a registration period, they are not required to be a member of the Manitoba College to practise the profession of social work in Manitoba. In this case, if the supplier is duly licensed to practise the profession of social work in Ontario, supplies of these services rendered in Manitoba or with clients from Manitoba between 1 and 5 days within a registration period would be exempt from GST/HST.
In contrast, if the supplier practises the profession of social work in Manitoba or with clients from Manitoba for more than 5 days within a registration period, the Manitoba College requires that they apply for temporary membership. If they are granted temporary membership from the Manitoba College or if their temporary membership is renewed, supplies of these services would be exempt from GST/HST while the temporary membership applies.
If they are not granted temporary membership (or practise for more than the 90 day limit per registration year or 180 day if the temporary membership is renewed), any supplies of services rendered in Manitoba that exceed either the 5-day or the 90 (180) day limits will not meet the requirements in paragraph 7.2(b) of Part II of Schedule V and will be subject to GST/HST at the applicable rate.
As mentioned above, there is no provision in the ETA that specifically exempts from the GST/HST supplies of psychotherapy services or services rendered by a psychotherapist, even if the psychotherapist is licensed and renders the service in a province that regulates the profession of psychotherapy.
As such, a supply of psychotherapy services provided in Manitoba by an Ontario licensed psychotherapist (or a licensed psychotherapist from any province) would be subject to the GST/HST at the applicable rate, based on the place of supply.
Similarly, where the telehealth services are provided in Manitoba by a licensed psychotherapist, they would also be subject to the GST/HST at the applicable rate based on the place of supply.
For information regarding the place of supply rules, please refer to GST/HST Technical Information Bulletin B-103, Harmonized Sales Tax – Place of supply rules for determining whether a supply is made in a province. (Footnote 4)
Services covered by the NIHB and the IRS
Section 9 of Part II of Schedule V provides a general exemption for supplies (including supplies of psychotherapy services) rendered to an individual to the extent that the service is payable or reimbursed by a provincial health care plan.
As mentioned above, you have indicated that the Corporation is an approved provider for Health Canada’s First Nations and Inuit Health Branch, and provides counselling to individuals and families eligible for coverage under the NIHB program and the IRS.
Given that this program is federally established and funded, payments under these programs would not meet the requirements for exemption under section 9, which requires that consideration for a supply be payable or reimbursed by the government of a province.
This does not affect the tax status of a supply that would otherwise be exempt anyway; an exempt supply of social work services remains an exempt supply, for example, whether payable by a federal program or otherwise.
Services for Indigenous People
The administrative policy of the Canada Revenue Agency (CRA) concerning the application of the GST/HST to Indians (Footnote 5) is outlined in GST/HST Technical Information Bulletin B-039, GST/HST Administrative Policy – Application of the GST/HST to Indians (TIB B-039).
As described in TIB B-039, Indians must generally pay the GST/HST on all taxable supplies of services that are not wholly performed on a reserve. A taxable service may be performed in whole or in part in a virtual manner, such as by telephone or videoconferencing, from a location off a reserve to an Indian located on a reserve at the time the service is performed. In this case, the taxable service is not performed wholly on a reserve and would therefore be subject to the GST/HST.
It should be noted that only individuals who are registered as an Indian under the Indian Act are eligible for relief from GST/HST as described in TIB B-039. These individuals may be issued a Certificate of Indian Status (status card) or a Temporary Confirmation of Registration Document (TCRD) by Indigenous Services Canada.
For additional information on the application of the GST/HST to supplies made to Indians, please refer to GST/HST Info Sheet GI-114, Application of GST/HST to Indian Individuals.
DISCLAIMER
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, the interpretation(s) given in this letter, including any additional information, is not a ruling and does not bind the Canada Revenue Agency (CRA) with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 343-573-6088. Should you have additional questions on the interpretation and application of the GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Sincerely,
Kate Portner Gartke
Senior Rulings Officer
Health Care Sectors
Legislative Policy and Regulatory Affairs
GST/HST Rulings Directorate
FOOTNOTES
1 Section 1.1 of Part II of Schedule V provides that, “For the purposes of this Part, other than section 9, a cosmetic service supply and a supply, in respect of a cosmetic service supply, that is not made for medical or reconstructive purposes are deemed not to be included in this Part.”
A “cosmetic service supply” is defined in section 1 of Part II of Schedule V to mean, “a supply of property or a service that is made for cosmetic purposes and not for medical or reconstructive purposes”.
Section 1.2 of Part II of Schedule V provides that, “For the purposes of this Part, other than sections 9 and 11 to 14, a supply that is not a qualifying health care supply is deemed not to be included in this Part.”
2 See sections 6 and 7 of Part II of Schedule V, which exempt nursing services and regulated health care services, respectively, the latter including optometric services, chiropractic services, physiotherapy services, chiropodic services, podiatric services, osteopathic services, audiological services, speech-language pathology services, occupational therapy services, psychological services, midwifery services, acupuncture services, and naturopathic services, if these services are rendered to an individual by a practitioner of the service.
3 Both documents are available on the Manitoba College of Social Workers website at https://mcsw.ca
4 Available on the Government of Canada website at https://www.canada.ca
5 The CRA recognizes that many First Nations people prefer not to be described as Indians. However, the term Indian is used in this document because it has a legal meaning in the Indian Act.
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