Schedule V

Table of Contents

Part I

Section 2

Administrative Policy

23 March 2017 CBA Commodity Taxes Roundtable, Q.20

no GST/HST should be charged on a cancellation fee paid by a new home builder to the purchaser

Mr. X has agreed to purchase a newly constructed home from its builder and is subsequently paid $100,000 by the builder for the purchase agreement’s cancellation, does s. 221(2) apply to relieve the builder from having to pay GST/HST on the $100,000 if Mr. X is registered? CRA responded:

Generally, when a purchaser, such as Mr. X, enters into an agreement of purchase of sale for the acquisition of a newly constructed house, the purchaser, Mr. X, is acquiring an interest in real property, namely an interest in a residential complex. If Mr. X subsequently receives consideration to transfer that interest to builder (the Vendor), Mr. X would be considered to be making a sale of the interest in the residential complex. …

If Mr. X is not a builder in his own right (for example, at the time of entering into the agreement of purchase and sale, he intended to acquire the house for his personal use), the sale of that interest would generally be exempt under section 2 of Part I of Schedule V to the ETA. Where that is the case, tax would not be payable by the recipient and, therefore, subsection 221(2) would not apply.

If Mr. X, however, is considered to be a builder in his own right (for example, at the time of entering into the agreement of purchase and sale, he did so for the primary purpose of selling the interest or the house itself), tax would be payable by the Vendor calculated on the value of consideration ($100,000) for the supply. If Mr. X is a non-resident or is resident by reason only of subsection 132(2), or the Vendor in the scenario is GST/HST registered, pursuant to paragraph 221(2)(a) or (b) respectively, Mr. X would be relieved of his obligation to collect the tax payable.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Builder individual is a builder on assignment of new house purchase contract if original purpose was to resell house 123
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Real Property purchase contract was real property 106
Tax Topics - Excise Tax Act - Section 221 - Subsection 221(2) s. 221(2) exclusion can apply to an interest in a purchase agreement 186

GI-120 Assignment of a Purchase and Sale Agreement for a New House or Condominium Unit 6 July 2011

Assignment of purchase agreement is assignment of interest in house

This publication addresses the situation where

  • a purchaser (referred to as the first purchaser) enters into a purchase and sale agreement with a builder (Builder A) for the construction and sale of a new house, and
  • the first purchaser subsequently assigns the agreement to an assignee (referred to as the assignee purchaser) before Builder A transfers possession or ownership of the house to the first purchaser and before any individual has occupied the house as a place of residence or lodging.

Generally, upon entering into an agreement for the construction and sale of a new house, the first purchaser is considered to have acquired an interest in the house. For GST/HST purposes, the assignment of the agreement to the assignee purchaser is normally considered to be a sale of the first purchaser's interest in the new house. The sale of an interest in a new house is generally taxable where the person selling the interest is a builder of the house.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 254 - Subsection 254(4) 481

22 December 2008 Interpretation 78066

agreement to purchase an as-yet-to-be-constructed condo was an “interest in” the condo unit – but assignment thereof not exempt if purchaser had resale intention

Mr. X agreed to purchase a residential condominium unit from a builder who would build the condominium complex (the “Builder”). His intention was to sell his right to purchase the unit prior to or at the completion date, and this in fact occurred as an assignment to Mr. Y, who paid to Mr. X at the time of the assignment an amount identified as the assignment price and an amount equal to the deposit previously paid by Mr. X to the Builder. On completion, the Builder charged Mr. Y the balance of the purchase price (i.e., the total purchase price less the deposit paid) plus GST calculated on the total purchase price.

In finding that the assignment was not exempt (under s. 2(a) or otherwise), CRA stated:

By signing a binding purchase and sale agreement, Mr. X acquired an interest in the unit, which is an interest in a residential complex for GST/HST purposes. It is that interest in a residential complex that Mr. X sold to Mr. Y by assigning the purchase and sale agreement to Mr. Y.

For GST/HST purposes, Mr. X is a "builder" of the unit as Mr. X entered into the purchase and sale agreement with the intention of reselling the unit or the interest in the unit.

11 September 2008 Interpretation 99946

assignment of purchase agreement for condo exempt if orginally for personal use

The correspondent paid an assignment fee to an individual (the Seller) for the assignment of the Seller’s interest in an agreement for the purchase from the builder of a residential condominium unit. Such interest was an interest in a residential complex, so that the assignment was exempt under s. 2 if the Seller had entered into the purchase agreement for the property with the primary intention of using it as his or her place of residence.

June 27, 2000 Interpretation 25236

assignment of interest in condo before completion was exempt if assignor not a builder

A agreed to purchase a unit in a condo development under the “PA” from the builder (the Vendor). A then assigned his rights under the purchase agreement, including rights to a parking stall and locker, and the benefit of the deposits he had made, to B in consideration for a stipulated sum.

CRA found that the assignment of A's rights, benefits and obligations under the PA to B is a supply of an interest in a residential complex, which would qualify for exemption from GST under s. 2 of Part I of Sched. V provided A is not considered to be a “builder,” which would be the case “if A entered into the PA with the primary intention of reselling the Condominium (or an interest thereof) in the course of a business or an adventure or concern in the nature of trade.”

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 254 - Subsection 254(2) - Paragraph 254(2)(a) NHS rebate available to assignee of original purchaser 75

Section 4

Section 5

Administrative Policy

17 May 2017 Interpretation 174642

claiming of ITC generated subsequent taxable sale

CRA went on to note that given that LP#1 was a builder who claimed input tax credits on its purchase of the building from the developer, a subsequent sale of the building would not be exempted under s. 5, stating:

Section 5 of Part I of Schedule V exempts the sale of a multiple unit residential complex (that is, the Residence) by a builder of the complex (that is, LP#1) where the builder received an exempt supply of the complex by way of sale or where the builder was required to self-supply under subsection 191(3) with respect to the complex, and that supply was the last supply of the complex made to the builder by way of sale. Generally, this exemption will not apply where the builder has claimed an ITC in respect of the builder’s last acquisition of the complex or in respect of an improvement to the complex.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 191 - Subsection 191(3) headlease structure of a student residence avoided triggering self-supply rule 473
Tax Topics - Excise Tax Act - Section 169 - Subsection 169(1) ultimate exempt use did not deny ITCs 199
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part I - Section 6.11 headlease of MURC not exempt where used by lessee more than 10% in short-term rentals 124

Section 5.2

Administrative Policy

Memorandum 19-5 "Land and Associated Real Property"

Overview and example

41. Section 5.2 of Part I of Schedule V to the Act exempts the sale of land (as well as an interest in the land) that forms part of a residential complex where the land is sold without the building. This exemption is provided under the following conditions:

  • immediately before the land is sold, the land was being leased on an exempt basis as described by paragraph 7(a) of Part I of Schedule V to the Act, i.e., the land was leased for at least one month to an owner or occupant of a residential unit affixed to the land for use by an individual as a place of residence; and
  • if the building and the land were sold together at that time, the sale would have been an exempt sale of a residential complex under any of sections 2 to 5 of Part I of Schedule V.

Example

Several years ago, the Martin family built their family's cottage on land they leased from a property development company for use as a summer residence. The company now sells the half hectare on which the cottage stands to the Martins. This sale of the half hectare is an exempt supply under the terms of section 5.2 of Part I of Schedule V.

Section 6

Administrative Policy

CBAO National Commodity Tax, Customs and Trade Section – 2013 GST/HST Questions for Revenue Canada, Q. 35. ("Property and Services Offer in a Senior Citizen Residence")

available with membership password at http://www.cba.org/CBA/sections_NSCTS/main/GST_HST.aspx

In its 2 May 2012 Tax News Item "Property and Services Offered in a Senior Citizens' Residence," Revenu Quebec indicated that various services would be part of a single supply of residential accommodation in the residence, including meals, monitoring, housekeeping in common areas, snow removal, cable television, weekly housekeeping, laundry, group transportation as well as transportation for medical appointments and assistance with certain activities of daily living. CRA stated that it will accept the same position:

provided such services form part of a single supply the predominant element of which is that of a residential unit made by way of lease, licence or similar arrangement. The types of additional services that may be include are discussed in …GST/HST Notice 224 under "Ancillary property and services."

31 March 2009 Ruling 103912 [revenues from nursing home and assisted-living facility residents]

revenues from nursing home and assisted-living facility residents

OPCO leased nursing assisted-living homes from Lessor.

CRA found that the supplies (including of residential units) made by Opco to the nursing home residents pursuant to "Resident Admission Agreements" were supplies of services which were not exempt under s. 6 of Part I of Sched. V; whereas the supplies made to the assisted-living residents pursuant to "Tenancy Residency Agreements" were exempt under s. 6.

31 March 2009 Ruling RITS 103912

Residents of an assisted living facility paid a single Accommodation Fee for their accommodation and various services. The Accommodation Fee was consideration for a single supply of a residential unit so that it was exempt under s. 6 of Part 1 of Sched. V.

GST/HST Notice 224 September 2007

Examples of ancillary services assimilated to rental supply (under Issue No. 2)

Examples of ancillary property and services include: meals, a laundry service for bed linens and towels; housekeeping services; entertainment and activities for the benefit of all residents including religious services, gardening, musical programs, exercise classes, bingo and shuffleboard; use of a recreation area and lounge rooms; a library at the facility; or any of the following services provided on a 24-hour per day basis: general building security, medic alert system monitoring, building patrol, security camera monitoring, telephone and door reception and responding to general emergencies.

...[A]n operator may provide, together with long-term occupancy of a room, daily services of administering medication and weekly assistance with bathing individuals staying at the facility. These services would not, on their own, be sufficient to alter the characterization of the supply as that of a residential unit.

However, some residential care facilities, such as nursing homes or extended care facilities, provide significant nursing and personal care services to individuals on a regular basis. These services may be essential to the overall supply made by the operator and may alter the fundamental nature of the supply. ...

17 February 2005 Interpretation Case No. 47887

The provision by a corporation to its employees of temporary lodging in a condominium leased to it by a subsidiary would be an exempt supply because there was no charge to the employees.

24 October 2003 Ruling RITS 48006

The provision of a care and service package to residents of a retirement residence represented supplies that were separate from the provision to them of residential accommodation, with the result that such services were taxable supplies.

8 August 2002 Ruling Case No. 31015

A registrant upon completion of construction of a nursing home would not be entitled to the new housing rebate under s. 256.2 (and also would not be required to self-assess under section 191) because the subsequent supplies it made to residents of the facility would not be considered to be described in section 6. The agreement with the residents indicated that they would be provided with accommodation, care, services and programs, and it was not possible for the registrant to supply any one of these elements to the exclusion of the others. Accordingly the registrant would be considered to be making a single supply that was not simply that of accommodation as set out in section 6.

Section 6.1

Administrative Policy

31 March 2009 Ruling 103912 [headleases of nursing homes and assisted-living facilities]

headleases of nursing homes and assisted-living facilities

OPCO constructed long-term care facilities comprising nursing homes and assisted-living facilities (collectively, the "Facilities") and sold them to LESSOR, which completed construction, and leased them back to OPCO.

CRA found that as OPCO's supply made under a Resident Admission Agreement to a nursing home resident is a supply of a service, OPCO does not make any supplies that are exempt under s. 6, so that lease payments for such Facilities are not exempt under s. 6.1

In determining whether the exemption in s. 6.1 applies to any particular lessor's supply, it is only the lessee's supplies of property (i.e., residential units) that must be considered and not supplies of services by it to the residents which must be taken into account in determining whether the head lease is exempt under section 6.1, so that the lease of the assisted-living Facilities would be exempt if the "substantially all" test was satisfied on this basis. If any portion of the Facilities includes real property that does not form part of the residential complex e.g., any part that is leased to a third party for the operation of a hair/barber shop, any lease payment attributable to that part of the Facility is taxable.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part I - Section 6.11 headleases of nursing homes and assisted-living facilities 42

20 October 2003 Headquarter Letter RITS 46713

A portion of a retirement home that was used for a higher level of services was characterized as being used for supplies that were exempt under s. 2 of Part II of Schedule V and not under s. 6 of Part I of Schedule V. Accordingly, a lease of those premises to the operator of the premises was not exempt from GST (under s. 6.1 of Part I of Schedule V), and was subject to tax.

5 March 1998 Headquarter Letter RITS HQR 0000928

Discussion of the requirements for the lease of units in a hotel, which had been partially converted into a nursing home, to be exempt under s. 6 or s. 6.1.

14 February 1997 Interpretation Case No. HQR0000489

lease of extended care facilities to operator

A mutual fund trust that acquires existing nursing homes and extended health-care facilities from arm's length vendors and then leases the nurses homes and extended care facilities to a Canadian corporation on a long-term basis will not be subject to tax on the lease of those parts of the nursing homes and extended care facilities that fall within the definition of residential complex. The part of what otherwise would be a residential building that is leased for business use is not considered to be reasonably necessary for the use and enjoyment of the building as a place of residence.

17 June 1994 940617

A lease of vacant land by O to L will become exempt when L subleases the land to D who acquires possession of the land in order to construct a single unit residential complex on it in the course of his commercial activities.

Section 6.11

Administrative Policy

17 May 2017 Interpretation 174642

headlease of MURC not exempt where used by lessee more than 10% in short-term rentals

Shortly before the occupancy of a newly constructed apartment complex (expected to be predominantly occupied by students), LP#1 purchases the building from the developer with a view to leasing it to another partnership (LP#2) That “headlease” will not be exempt given inter alia that more than 10% of the apartment units will be leased for short-term stays during the regular academic session (and that percentage will increase to 90% or more during the summer). In this regard, CRA stated that s. 6 “does not deal with the situation where the residential complex is supplied to a person under a head lease (such as the Master Lease) for a subsequent supply to another person.” Therefore, LP#2 will be required to pay GST on its lease payments to LP#1.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 191 - Subsection 191(3) headlease structure of a student residence avoided triggering self-supply rule 473
Tax Topics - Excise Tax Act - Section 169 - Subsection 169(1) ultimate exempt use did not deny ITCs 199
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part I - Section 5 claiming of ITC generated subsequent taxable sale 148

6 July 2011 Interpretation Case No. 131657

separate charge by Landlord to Tenant for improvements to residential facility

The Municipality, as Landlord, leases real property including a building containing residential units, common areas, administrative office space and associated external areas and outbuildings to Tenant on an exempt basis under s. 6.11 of Part I of Sched. V, who, in turn, supplies the real property on an exempt basis to Subtenants under s. 6 of Part I of Sched. V. The Landlord will renovate the premises, with a negotiated entitlement to be reimbursed by Tenant (under a MOU) for costs incurred in excess of $XX.

In indicating that the reimbursements likely would be consideration for the supply of a separate service by Landlord, CRA stated:

There is nothing in the MOU that provides that the amount paid by the Tenant to the Landlord are to be treated as rent for purposes of the Lease Agreement, nor is there any suggestion that failure to pay the amount would result in a default under the Lease Agreement.

31 March 2009 Ruling 103912 [headleases of nursing homes and assisted-living facilities]

headleases of nursing homes and assisted-living facilities

OPCO constructed long-term care facilities comprising nursing homes and assisted-living facilities (collectively, the "Facilities") and sold them to LESSOR, which completed construction, and leased them back to OPCO. LESSOR's supplies of the residential complex portion of each Facility is exempt under s. 6.11.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part I - Section 6.1 headleases of nursing homes and assisted-living facilities 199

Section 6.2

Administrative Policy

18 January 2013 Interpretation Case No. 140364

In response to a question as to whether "each occupant of a residence must benefit from a supply of at least 10 meals per week in order that the supply is exempted by virtue of section 6.2," CRA stated (Tax Interpretations translation):

…we are in agreement with your interpretation that the requirement of 10 meals per week attaches to the residence and not to each occupant of the residence. Thus, if for example a residence is occupied by 2 persons who have concluded an agreement to receive 10 meals per week in total, the supply of meals is exempted if the other conditions of section 6.2 are satisfied.

Section 7

Cases

Hidden Valley Golf Resort Assn. v. Canada, [2002] GSTC 42 (FCA)

leasing of serviced premises was exempt

Before going on to find that the leasing by the Appellant of cottage properties was a single supply of exempt residential accommodation under s. 7, Sharlow JA stated:

It is common knowledge that residential leases in apartment complexes frequently include the right to services such as security, water, electricity, cable TV, garbage and snow removal, landscaping, and the right to use recreational facilities such as swimming pools, exercise rooms and tennis courts, without requiring the payment of any amount in excess of the stipulated rent. … The only unusual aspect of the subleases in this case is that the tenants have access to a nine-hole golf course. I am not persuaded that the nature of the recreational facilities in this particular case should put the subtenant in a special category.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply lease was root of transaction 100
Tax Topics - General Concepts - Substance incidence of GST does not turn on nomenclature 75

Administrative Policy

29 August 2011 Ruling Case No. 62030

A trailer situated on a leased site at a trailer park has had its wheels removed, is fully skirted, and a room addition has been constructed, attached to the trailer and permanently affixed to a cement pad. There are year-round connections of hydro, water and sewer facilities, the roads to the park are ploughed, and the unit is fully furnished by the individual and used as a residence. Ruling that the rentals together with on-charges of municipal taxes are exempt under s. 7(a)(i) of Part I of Sched. V. The trailer is considered to come within "any other similar premises" in the definition in s. 123(1) of a residential unit.

4 April 2011 Headquarters Letter Case No. 92799

a purchaser of a block of shares in a co-operative corporation which is the beneficial owner of a recreational vehicle park thereby becomes entitled to be licensed a particular site in the park provided that the purchaser pays his or her portion of the "assessments" for common costs. Such purchase, which is characterized as a single supply of real property by way of license, is not exempt under s. 7(a)(i) of Part I of Sched. V given that, except in exceptional circumstances, a recreational vehicle does not qualify as a residential unit. The payment of the assessments also is not exempt under s. 7(a)(i).

4 April 2011 Headquarter Letter Case No. 122697

the lease to the individual of land located at a seasonal waterfront resort site specifies that the site shall be used for recreational use only. The individual stays in a manufactured trailer on the site for approximately 95% of the period from the beginning of May to Thanksgiving while maintaining a primary residence in the city (with the resort unit being supported on concrete blocks for permanent stability and connected in a permanent way to hydro, gas, water and septic facilities.) Given that the unit is used as the individual's place of residence (albeit not the primary place of residence) it qualifies as a place of residence and the lease is exempt under s. 7(a)(i) of Part I of Sched. V.

4 April 2011 Headquarter Letter Case No. 87088

a lease of land located at a lake resort site became exempt under s. 7(a)(i) when the individual's husband retired and began to use a park model trailer, which was installed in a permanent manner at the site (including connection to hydro, gas, water and septic facilities), as his place of residence from May to October of each year, with the individual spending her weekends and summer periods there. Although an individual may have more than one place of residence, a place of residence would not normally include an abode of a transient nature.

Articles

John Tobin, "Infrastructure and P3 Projects", 2017 Conference Report (Canadian Tax Foundation), 10:1-31

Application of s. 7 to a lease-in lease-out structure re student residence (p. 10:11)

[S]ection 7 of schedule V provides an exception for certain ground leases. Consequently, if a university were to provide a ground lease to Projectco, it would be exempt from HST under section 7 on the basis that Projectco will, in turn, be licensing the use of the property back to the university and the university will grant possession to a student.

Paragraph 7(a)

Subparagraph 7(a)(ii)

Administrative Policy

28 February 2019 CBA Roundtable, Q.22

sublease of land used by sublessee to construct residential homes was exempted under s. 7(a)(ii)

DeveloperCo which holds land under a 99-year headlease, pays the fees of a third-party contractor (Contractor) to develop the land as housing lots, and subleases the lots to Builder who constructs houses thereon, which are sold to the third party buyers through a sale to them of the subleases. ( Polygon, which CRA accepts, effectively found that these sales are taxable, rather than the builder being subject to the self-supply rule under s. 191).

CRA found that because the subleases by DeveloperCo to Builder were exempted under Sched. V, Pt. I, s. 7 rather than s. 6.1 or 6.11, stating:

[B]ecause Builder does not make (or hold the lots for the purposes of making) exempt supplies included in section 6 or 7 of Part I of Schedule V to the ETA, DeveloperCo’s subleases of the lots to Builder are exempt under subparagraph 7(a)(ii) of Part I of Schedule V as opposed to being exempt under section 6.1 of Part I of Schedule V.

Since s. 256.1 only referenced ss. 6.1 and 6.11, DeveloperCo was not entitled to a rebate under s. 256.1 for the HST charged to it on the development costs borne by it – notwithstanding that the transactions generated fully-taxable revenues from the sublease purchasers.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 256.1 - Subsection 256.1(1) a developer was not entitled to a rebate of its HST costs where it subleased its developed housing lots to a home builder for construction and sale 394

4 September 2003 Ruling 46189

rent prepayment allocated to residential rather than commercial portion of building related to future period when condo units were to be held for sale, and was taxable

Land-owner ground-leased currently vacant land to Developer for construction thereon of residential condo units in the upper part of the building (the “Residential Units” and, together with related underground parking units, the “Residential Portion”), to be assigned (i.e, sold) to purchasers for residential use or, failing that, to be rented to such persons, and with the balance (the “Retail Portion”) to be sold or rented for commercial use. No annual Base Rent will be charged to the Developer by the Land-owner for an initial rent-free period (so that the Base Rent payments for the balance of the lease term were set at a higher rate). The developer exercised its option to prepay the entire base rent payable for the lease term through making a single payment equal to the net present value of the stipulated Base Rents.

CRA indicated that the Land-owner is considered under s. 136(2) be making two supplies; of the Retail Portion, which is a taxable supply; and of the Residential Portion, which would be exempt under Sched. V, Pt. 1, s. 7(a)(ii) to the point that the Residential Units first come into existence by way of construction, with an apportionment based on floor space perhaps being appropriate.

However, following that period (“Period 1”), the Land-owner will begin to make taxable supplies of the Residential Units during “Period 2,” which ends when the Residential Unit is assigned or leased (but with this change to taxability only becoming effective at the beginning of the first lease interval at which the Residential unit has come into existence.) Following such assignment (i.e., during "Period 3," the Land-owner goes from making a taxable supply of a Residential Unit to the Developer, to making an exempt supply of the Unit to a Purchaser under s. 6. During Period 2, the s. 7(a)(ii) exemption will not apply to the Base Rents – nor will s. 6.1, since the Developer has acquired the Residential Units for the purpose of making supplies of the Units by way of assignment.

Although the prepayment of base rent is made in Period I, it is attributable to the balance of the lease term after Period 1, so that the prepayment of base rent is not attributable to Period I. Also, in respect of the Residential Portion, the Developer's lease term ends on Unit-by-Unit basis as Residential Units are assigned to Purchasers. As a result, the Developer has no Period 3 for those Units assigned (rather than sub-leased). Since at the time of the base rent prepayment all of the Units were held for supply by way of assignment rather than sub-lease, all of the base rent prepayment is attributable to Period II and thus fully subject to GST.

GST/HST Memorandum 19.2.2 “Residential Real Property” February 1998

Exemption only applicable to the land reasonably necessary for residence

15. An exemption also applies to the supply of land, other than a site in a residential trailer park, by way of lease, licence or similar arrangement for a period of continuous possession or use of at least one month where the recipient is acquiring possession for the purpose of constructing a residential complex on the land in the course of a commercial activity. ...[T]he exemption applies only to an amount of land that is reasonably necessary for the use and enjoyment of the residential unit as a place of residence for individuals. In most such cases, the recipient is required to self-supply on the fair market value of the land and building.

Section 9

Administrative Policy

Forms

Subsection 9(2)

Cases

International Hi-tech Industries Inc. v. The Queen, 2018 TCC 240

sale by corporation not exempted

As a sale of lots by a corporate vendor was not exempted under Sched. V, Pt. I, s. 9(2), the vendor was properly assessed for failure to collect GST.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 152 - Subsection 152(1) - Paragraph 152(1)(b) departure of supplier from its usual prompt invoicing 230
Tax Topics - Excise Tax Act - Regulations - Input Tax Credit Information (GST/HST) Regulations - Section 3 - Paragraph 3(a) - Subparagraph 3(a)(ii) invoice not issued if not sent 220
Tax Topics - Excise Tax Act - Section 169 - Subsection 169(1) no contractual nexus between ITC claimant and supplier 245
Tax Topics - Excise Tax Act - Section 168 - Subsection 168(9) possible deposits subsequently may have been applied by agreement as payments on account 205
Tax Topics - Excise Tax Act - Section 221 - Subsection 221(2) unregistered purchaser 33

Paragraph 9(2)(a)

Administrative Policy

15 January 2015 Ruling 151911r

net rental profit reported for income tax purposes

An individual purchased vacant land (the Property) to hold as investment property jointly with an unrelated individual, with each owning a one-half interest. In a subsequent year the co-owners leased the Property to the neighbouring farmer, which the correspondent stated was to protect against a potential claim of adverse possession. The individual subsequently sold her interest in the Property to the other co-owner and the spouse of the co-owner. For income tax purposes, she reported her share of the rents as rental income and the only expense claimed was her portion of the property taxes. The representative stated that other expenses incurred (such as legal fees for professional services in connection with the lease, travel expenses between her residence and the Property to check up on the Property, etc.) were not claimed for income tax purposes. After ruling that this sale was not exempt under s. 9(2) of Part I of Sched. V, on the basis that immediately before the sale the Property was capital property used primarily in a business carried on by the individual with a reasonable expectation of profit, CRA stated:

[T]he fact that the gross income generated from the lease of the Property was greater than the expenses attributed thereto for most of the years the Property was rented suggests that the business had a reasonable expectation of profit.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Business net rental profit reported for income tax purposes 194

Section 13

Administrative Policy

8 March 2018 CBA Commodity Tax Roundtable, Q.21

repairing a fire-damaged condo qualifies as a service re the occupancy or use of the condo

After a fire in a condominium unit, the contractor performing restoration work charges GST/HST to the condo corporation. Do the restoration services come within Sched. V, Pt. I, s. 13 as a service that “relates to the occupancy or use of the unit” – or is the condo corporation regarded as a bare trustee for and on behalf of all residential unit owners, so that there is a supply of the restoration services directly to each of the owners or the particular owner whose unit sustained the damage? CRA responded:

Generally, a condo corporation’s supply, to a resident, of a service of restoring a residential condominium unit back to its original state where the unit sustained damage due to a fire would relate to the use or occupancy of the unit. As such, the condo corporation’s supply of the service to the resident would be exempt under section 13 of Part I of Schedule V… .

CRA went on to indicate that as the condo corporation thus would be making an exempt supply, it would not be entitled to an input tax credit for the GST/HST charged to it.

Part II

Section 1

Health Care Facility

Administrative Policy

13 September 2011 Ruling Case No. 102589 (similar to 13 September 2011 Ruling Case No. 118500)

CRA stated:

Nursing homes, which have registered nurses on staff to provide 24-hour nursing care to the residents, are the type of facilities that we consider to fall within paragraph (c) of the definition of "health care facility" section 1 of Part II of Schedule V. In contrast, a facility operated to provide only support services and assistance with activities of daily living without nursing care would not meet the criteria of this paragraph.

The registrant's "group homes" for people with developmental disabilities did not so qualify as health care facilities as the residents did not "require continuous nursing and personal care under the direction or supervision of qualified medical and nursing care staff."

31 July 2003 Ruling Case No. 37807

high care portion only of retirement home qualified

A retirement home other than that portion of it that was devoted to residents suffering from Alzheimer's or other dementia did not qualify as a health care facility. "In a health care facility, the provision of care would not be discretionary benefits that are available in addition to accommodation."

15 August 2002 Headquarter Letter 35709

"Assessment centres operated for the purpose of supplying medical reports to respond to questions posed by insurance companies, tribunals, lawyers, Workers' Compensation Boards, employers, etc. ... are not facilities included in the 'health care facility' definition ... [their] examinations and assessments fall outside the ambit of care or treatment because they are performed solely for the purpose of producing a medical report for another person, such as an insurance company."

Paragraph (a)

Administrative Policy

29 January 2016 Ruling 163020

part of facility used for multi-disciplinary preparation of health assessment reports was not for medical care

ACo, which is engaged in the supply of various health care services, provides an “Assessment” service (which is not covered by any provincial health care program). The Assessment includes physical examinations, diagnostic tests, and lifestyle counselling and results in a personalized report of findings (being a compilation of the reports from the different service providers) providing recommendations for dietary change, exercise regime and further testing. The physician who sees the patient does not review the reports from the other service providers. The Assessment is performed in a separate part of ACo’s facilities.

In finding that the part of the facility used for making the Assessments did not qualify under para. (a) as being used for the purpose of providing medical care, CRA stated:

In these cases [ Riverfront and P-248] the examination by a physician or the review of a patient’s medical records by a physician were considered to be medical care for purposes of the definition of “health care facility.” The review of a patient’s medical records would also include a physician reviewing an assessment of a patient completed by another health care professional. The circumstances of these supplies can be differentiated from the supply of [the Assessment] in that the purpose for these supplies is the examination by the physician or the review of a report by the physician. […] [The Assessment] supplied by [ACo], […] is a multi-disciplinary assessment conducted by a number of different service providers including….

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply single supply of multi-disciplinary health assessment 109

Home Care Service

See Also

Cartier House Care Centre Ltd. v. The Queen, 2015 TCC 278

"personal care" included ADL assistance

Each appellant, which was a for-profit operator of a B.C. residential care home (in the case of "CH") or a B.C. assisted living facility (in the case of "CT"), was invoiced periodically, based on an flat hourly rate, by a third-party independent contractor ("HARPS," or "SimpeQ," respectively) for the services of their "care aides" (who performed personal services and provided assistance to residents with the activities of daily living, including bathing, dressing, grooming, transferring, skin, nail and mouth care, meal preparation and feeding, washroom and medication assistance and incontinence management), in the case of CH, "activity aides" (who focused on social activities for the residents), as well as laundry and housekeeping services for both homes. The regional health authority ("FHA") funded "Health Services" including assistance with the activities of daily living including bathing, dressing, grooming, transferring, feeding, incontinence management, and emotional and social support, but not "Hospitality Services" including social and recreational programs, laudry and "homemaking" services.

At the time, Pt. II, s. 1 provided:

"homemaker service" means a household or personal service, such as cleaning, laundering, meal preparation and child care, that is rendered to an individual who, due to age, infirmity or disability, requires assistance.

In response to a Crown submission (at para. 41) that "according to the noscitur a sociis rule of statutory interpretation, the term ‘personal service' would be restricted to services similar in nature to the examples set out in the definition: cleaning, laundering, meal preparation and child care," Paris J stated (at paras. 46-47):

[T]he plain and ordinary meaning of "personal service" would clearly encompass such services assistance with the activities of daily living such as were provided to the residents of Courtyard Terrace and Cartier House, due to their age, infirmity or disability. …

The use of specific examples after a general term in legislation does not restrict the meaning of the general term to cases similar to the specific examples. Rather, the presumption is that, in using the specific examples, Parliament intended to extend the meaning of the general term to things that would ordinarily have been seen as not falling within the general term. This principle of interpretation was discussed by the Supreme Court of Canada in National Bank of Greece v. Katsikonouris, [1990] 2 S.C.R. 1029… .

See summaries under Sched. V, Pt. II, s. 13 and s. 138.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 1 - Institutional Health Care Service accommodation an institutional health care service 200
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 13 personal care services provided by independent contractors were exempted 459
Tax Topics - Excise Tax Act - Section 138 s. 138 did not apply where the allocation of consideration among the components was apparent 234
Tax Topics - Statutory Interpretation - Interpretation/Definition Provisions general phases in definition not limited by following specific enumeration 171
Tax Topics - Statutory Interpretation - Noscitur a Sociis noscitur a sociis did not apply to general phases preceding list 194

Institutional Health Care Service

See Also

Cartier House Care Centre Ltd. v. The Queen, 2015 TCC 278

accommodation an institutional health care service

Paris J found that an independent contractor, who provided personal care services to a B.C. for-profit residential care home, was thereby making an exempt supply of "homemaker services" on the basis inter alia that the regional health authority made payments to the operator of the home for the purpose of the acquisition of such services.

Before rejecting a submission by the Crown that if the same finding had been made respecting amounts paid by a regional health authority to a non-profit operator, so that such amounts were found to have been paid for the purpose of the operator acquiring homemaker services, this purpose would preclude the amounts from being government funding as defined in the Regulations, Paris J stated:

From my reading of Part II of Schedule V, supplies of accommodation and services made to residents of assisted living and residential care facilities would appear to be supplies of "institutional health services" "provided in a health care facility" and therefore exempt supplies by virtue of section 2 of Part II of Schedule V.

See summaries under Public Service Body Rebate (GST/HST) Regulations, s. 2 – government funding, Sched. V, Pt. II, s. 13 and Sched. V, Pt. II, s. 1 – home care services.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 1 - Home Care Service "personal care" included ADL assistance 383
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 13 personal care services provided by independent contractors were exempted 459
Tax Topics - Excise Tax Act - Section 138 s. 138 did not apply where the allocation of consideration among the components was apparent 234
Tax Topics - Statutory Interpretation - Interpretation/Definition Provisions general phases in definition not limited by following specific enumeration 171
Tax Topics - Statutory Interpretation - Noscitur a Sociis noscitur a sociis did not apply to general phases preceding list 194

Administrative Policy

GST/HST Notice 312 Proposed GST/HST Treatment of Supplies of Human Ova and In vitro Embryos May 2019

assimilation of provision of ovum or embryo to single supply at fertility clinic of institutional health care service

Where a patient of a fertility clinic or other health care facility undergoes treatment or other service at the clinic which includes the implantation of a human donor ovum or the transfer of an in vitro embryo, the CRA considers that the supply of the human donor ovum or in vitro embryo made by the clinic to the patient in these circumstances would generally be part of an exempt supply of an institutional health care service.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part I - Section 6 445
Tax Topics - Excise Tax Act - Schedules - Schedule VII - Section 13 356
Tax Topics - General Concepts - Effective Date CRA allows immediate application of the new non-supply rules for human ova or embryos but won’t process rebate claims until passed 156

Excise and GST/HST News No. 103, December 2017

Palliative care training to PSWs does not qualify

Example 2

A registered social worker who is in good standing with their provincial regulatory body is hired by a hospice to give a presentation to its personal support workers on providing assistance to palliative care patients in coping with their illnesses.

The supply made by the social worker is excluded from the exemption in section 7.2 of Part II of Schedule V. The personal support workers provide care to others as part of their profession and the exemption in section 7.2 excludes supplies rendered to individuals who render care to others in a professional capacity.

28 May 2004 Ruling RITS 47263

The provision of services (other than optional services) by the operator of a nursing home to the residents constituted an integrated institutional health care service rather than a supply exempted under s. 6 Part I of Schedule V, given that the primary purpose for which the home was operated was to provide long-term care that involved nursing, personal and supervisory care, meals and support services.

15 August 2002 Headquarter Letter 35709

"The definition 'institutional health care service' is a package of services that are conjugated together to describe an institutional health care service. This element [paragraph (h)] is directly linked to the preceding elements of the definition and in keeping with the context of the other elements, this element also includes supporting services for the care provided by health care professionals. For example, this element would include the services rendered by an orderly or a technician in a hospital trained to carry out certain attendant or technical duties."

14 April 2000 Headquarter Letter 7741

CCRA rejected the position that the operator of a medical clinic supplied institutional health care services to its patients on the basis the health care services rendered by the physicians were described in paragraph (h), i.e., services rendered by persons who received remuneration for the services from the operator. Instead, CCRA maintained its position that

"where a corporation or other company, including a medical clinic, contracts for services and property, including the premises, supplies, staff, etc., that it in turn provides to the physicians with respect to their medical practices, and the clinic is entitled under an agreement with the physician to retain a certain percentage of their ... billings, the clinic is providing management services to the physicians. It is our view that the portion of the physicians' ... income that the clinic retains is a charge to the physicians for the clinics' operating and administrative expenses."

"'Case room' is the official term for a delivery or birthing room for maternity patients."

1 May 1995 Headquarter Letter File 11835-2

fees to independent contractors qualified as exempt remuneration

Managers (who were independent contractors rather than employees) resided at residences for handicapped individuals in order to provide assistance to the handicapped in their daily living by supervising their daily routines, providing counseling, supervising the preparation and organization of meals and providing transportation. CRA indicated that their remuneration respecting their services provided to the handicapped individuals would be exempt under paragraph (h) of the definition of institutional health care services..

Words and Phrases
remuneration

Paragraph (b)

Cases

Dr. Brian Hurd Dentistry Professional Corporation v. The Queen, 2017 TCC 142 (Informal Procedure)

orthodontic appliance was not a "medical prosthesis"

Campbell J found that an incorporated orthodontic practice was making a single supply of exempt orthodontic health services rather than (as argued by it) two supplies comprised of a zero-rated supply of medical equipment (the orthodontic appliance) and of exempt orthodontic services (e.g., adjustment and maintenance services). She then rejected obiter the Crown's argument in the alternative that a separarate supply of the orthodontic appliances would not have been zero-rated but, instead, an exempt supply of a "medical...prosthesis" under Sched. V, Pt. II, s. 1 - "institutional health care service" para. (b), stating (at para 44):

…[I]f I had concluded that the Appellant provided multiple supplies, then … the supply of the orthodontic appliance would be zero-rated pursuant to section 11.1 of Schedule VI, Part II of the Act. … [T]he Act has set out the scheme for an orthodontic appliance entirely separate and apart from the provisions that apply to a prosthesis.

Words and Phrases
medical prosthesis
Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 5 single supply by incorporated orthodontist of health care services 246
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 1 - Institutional Health Care Service - Paragraph (h) single supply of orthodontic services by incorporated orthodontic practice qua health care facility 155
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply single supply of orthodotic service 81
Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part II - Section 11.1 hypothetical separate supply of an orthodontic appliance by an orthodontist would have been zero-rated 207

Paragraph (h)

See Also

Dr. Brian Hurd Dentistry Professional Corporation v. The Queen, 2017 TCC 142 (Informal Procedure)

single supply of orthodontic services by incorporated orthodontic practice qua health care facility

Campbell J found that an incorporated orthodontic practice was making a single supply of exempt orthodontic health services rather than (as argued by it) two supplies comprised of a zero-rated supply of medical equipment (the orthodontic appliance) and of exempt orthodontic services (e.g., adjustment and maintenance services).

On this basis, she found (at para 35):

… The supply of orthodontic treatments were dental services, consisting of a supply of consultative, diagnostic, treatment or other health care services rendered by a medical practitioner to patients and as such are exempt supplies within the parameters of section 5 of Schedule V, Part II. Further, the single supply of orthodontic treatment by the Appellant in its dental clinic was an exempt supply pursuant to section 2 of Schedule V, Part II of the Act because the supply was made by an operator of a health care facility in respect to institutional health care service rendered to a patient of the facility.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 5 single supply by incorporated orthodontist of health care services 246
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply single supply of orthodotic service 81
Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part II - Section 11.1 hypothetical separate supply of an orthodontic appliance by an orthodontist would have been zero-rated 207
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 1 - Institutional Health Care Service - Paragraph (b) orthodontic appliance was not a "medical prosthesis" 152

Practitioner

See Also

Filiatrault c. La Reine, 2017 TCC 232 (Informal Procedure)

Quebec psychotherapist was not a member of the psychologists’ profession

The taxpayer, who had previously practised as a career counsellor, began to practise psychotherapy in 1989. When he was accredited by his professional order in 1995, psychotherapy was not a professional activity that was regulated at the provincial level. However, following 2012 amendments to the Quebec Professional Code (the “Code”), the Ordre des psychologues du Québec recognized the taxpayer’s qualification by issuing a psychotherapist’s permit to him on September 26, 2012.

From 2012 onwards, the Code included psychotherapist permit holders among those permitted to practise psychotherapy. The taxpayer’s patients were referred to him by physicians or colleagues in the health care network, for treatment of various symptoms through psychotherapy services.

After finding (at para. 22) that psychotherapy came within the concept of a supply of psychology in light of s. 187.1 of the Code providing that “psychotherapy is psychological treatment,” and (at para. 30) that psychotherapy also came within the term “qualifying health care supply” as “these services were for ‘treating, relieving or remediating ... a disorder’,” Smith J went on to find that the taxpayer did not qualify as a practitioner, stating (at paras. 40-41):

[E]ven if the services offered by a psychotherapist are psychological in nature, the ETA requires that the person be a “practitioner”. In order to qualify in that respect, the requirement is not only to offer psychological services, but to practise the profession of psychology, which is reserved to psychologists who are members of the Ordre des psychologues du Québec.

Therefore, even if the member of an order specifically listed in section 187.1 of the Code is issued a psychotherapist’s permit, that does not confer on that member the title of psychologist, as required by the definition of “practitioner”

Words and Phrases
psychotherapy psychologist
Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 280 - Subsection 280(1) due diligence defence to the imposition of interest is available 187

Administrative Policy

GST/HST Technical Information Bulletin B-110 Application of the GST/HST to the Practice of Acupuncture April 2017

Acupuncturists in unregulated provinces should contact other provinces’ governing bodies

[S]upplies of acupuncture services made by a R.Ac, Dr.Ac, R.TCMP, or Dr.TCM are generally exempt….

[I]n Manitoba, Saskatchewan, Prince Edward Island, Nova Scotia, New Brunswick, Yukon, the Northwest Territories or Nunavut…the person should contact the regulatory body in any of the regulated provinces to determine if their qualifications are equivalent to those necessary to be licensed or otherwise certified in that province….

24 October 2016 Ruling 154036

Psychological Associate with Ontario College qualified

A self-employed registered Psychological Associate with the College of Psychologists of Ontario is paid a flat per-assessment fee by rehabilitation companies to conduct psycho-vocational assessments and vocational assessments on individuals who are receiving loss of earnings benefits from an insurer as a result of work-related injury or illness. These assessments are used to assist the individual in returning to work by recommending upgrading, retraining options and alternative vocational options.

Before going on to find that these services were exempted under Sched. V, Pt. II, s. 7(j), Headquarters found that the correspondent was a “practitioner,” stating:

[A] member of the College in good standing meets the definition of a "practitioner" for psychological services provided in Ontario for purposes of paragraph 7(j) of Part II of Schedule V. There is no distinction made in the legislation or in the regulations between a Psychologist and a Psychological Associate with respect to scope of practice or with respect to authorized acts.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 1 - Qualifying Health Care Supply vocational and pscho-vocational assessments performed by an Ontario psychological associate were exempt 158

Excise and GST/HST News - No. 97 17 November 2015

Acupuncturists as practitioners

A person is considered to be licensed or certified to practise the profession of acupuncture if he or she is licensed or certified as an acupuncturist or as a Traditional Chinese Medicine (TCM) practitioner by a provincially established regulatory body, if the acupuncture service is supplied in a province that regulates the profession of acupuncture. …

Currently, the profession of acupuncture is regulated under provincial legislation in the provinces of British Columbia, Alberta, Ontario, Quebec and Newfoundland and Labrador. If an acupuncture service is supplied in any of these provinces, the acupuncturist is required to be licensed by the regulatory body for the profession of acupuncture in that province in order to be a “practitioner” for GST/HST purposes (e.g., College of Traditional Chinese Medicine Practitioners and Acupuncturists of Ontario). …

[I]f an acupuncturist makes a supply of an acupuncture service in [other provinces]…the acupuncturist is required to have qualifications equivalent to those qualifications required to be licensed in a province where the profession is regulated… .

Psychotherapy services

Currently, there is no provision in the Act 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. …

[S]upplies of psychotherapy services rendered to an individual by a licensed physician or registered nurse, social worker, psychologist or occupational therapist will be exempt from the GST/HST if the supply meets the requirements in the relevant exemption and the supply is also a qualifying health care supply… .

Qualifying Health Care Supply

Administrative Policy

24 October 2016 Ruling 154036

vocational and pscho-vocational assessments performed by an Ontario psychological associate were exempt

A self-employed registered Psychological Associate with the College of Psychologists of Ontario is paid a flat per-assessment fee by rehabilitation companies to conduct psycho-vocational assessments and vocational assessments on individuals who are receiving loss of earnings benefits from an insurer (the “Third Party”) as a result of work-related injury or illness. These assessments are used to assist the individual in returning to work by recommending upgrading, retraining options and alternative vocational options.

After finding that the correspondent was a “practitioner,” Headquarter found that these services were exempted under Sched. V, Pt. II, s. 7(j), stating:

The supply of psycho-vocational assessment and vocational assessment services rendered to an individual fall within paragraph (c) or (d) of the definition of "qualifying health care supply" as the purpose of the service is to confirm or identify the issues related to an individual's injury or disability for the purpose of vocational rehabilitation planning and the development of the individual's vocational rehabilitation plan.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 1 - Practitioner Psychological Associate with Ontario College qualified 157

16 March 2016 Interpretation 170748-- Services rendered by a psychologist

psychological counselling services provided to an injured athlete including re an upcoming competition generally qualify

The taxpayer’s daughter receives treatment (counselling services) from a psychologist (is licensed by the provincial regulatory body) to cope with the mental stress of sustaining an injury and for confidence building for upcoming competitions. Are these counselling services exempt? CRA responded:

Where the counselling services he renders to your daughter fall within the scope of practice for the profession of psychology, the services will be a psychological service rendered to an individual by a practitioner of psychological services and meet the requirement of the exemption in paragraph 7(j) of Part II of Schedule V.

…[I]t is our view that counselling services rendered by a licensed psychologist for the purpose of assisting an individual in overcoming mental stress associated with sustaining an injury would be a qualifying health care supply pursuant to paragraph (d) of the definition of that term… .in section 1 of Part II of Schedule V. For example, this could include counselling services to assist an individual in mentally preparing for an upcoming competition following an injury, illness, disorder or disability sustained by the individual.

However, counselling services rendered by a licensed psychologist solely for the purpose of confidence building as mental preparation for an upcoming competition that was not associated with an underlying injury, illness, disorder or disability would not generally be a qualifying health care supply. …

16 February 2016 Ruling 165366 Dietetic Services

nutiritional consulting by licensed dietician not excluded

A dietician who is registered with the provincial College of Dietitians entered into a Service Agreement with a registered charity (the “Council”) to provide consultant nutrition services to the Council. After ruling that the supply of such services was exempted under Sch V, Part II, s. 7.1, CRA stated:

You are licensed or otherwise certified to practise the profession of dietetics in [Province X]. Thus, for GST/HST purposes, you are a practitioner of dietetics for services rendered under the Service Agreement.

In addition, as the Council is a charity, the recipient of the dietetic services that you supply is a public sector body. ...

The expression “qualifying health care supply” has been added to section 1 of Part II of Schedule V to the ETA… .

It is our view that the services you supply to the Council under the Service Agreement are not a cosmetic service supply and are a qualifying health care supply.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Regulations - New Harmonized Value-Added Tax System Regulations - Subsection 13(1) notice clause in a services contract referenced in determining the place-of-supply 190
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 7.1 nutritional consulting supplied to registered charity exempted 32

5 February 2016 Interpretation 153241

medical evaluations for insurers now excluded

A medical doctor residing in the U.S. who is registered for GST purposes would, at the request of insurance companies, interview and physically examine a patient in Ontario in an office usually provided by it or other interested parties and then, in the doctor’s home office, review medical documentation, and dictate and edit the report to the insurance company. Billing and other office duties also were performed in the home office. The doctor also, at the request of lawyers for victims of motor vehicle accidents, and slips and falls, would examine and interview the patient in a rented office room in Ontario, and prepare in the home office a report regarding the patient’s diagnosis, restrictions and limitations, and recommendations for treatment. Are the charges for these independent medical evaluations (IMEs) exempt from the GST/HST?

After noting that the IMEs supplied by the doctor before March 21, 2013 were exempt health supplies under s. 5, CRA stated, respecting supplies made after that date:

Section 1.2 of Part II of Schedule V has been added and provides that … a supply that is not a “qualifying health care supply” is … not exempt under any provision in Part II. …

…Specifically, paragraph (d) of the definition of qualifying health care supply includes supplies made for the purpose of assisting an individual (other than financially) in coping with an injury, illness, disorder or disability. This would include services provided directly to the individual to cope with the limitations or effects of an injury.

Supplies of medical examinations, reports and certificates that are made solely for other purposes, such as assisting a third party (e.g. insurance company or lawyer)… would be deemed not to be included in Part II of Schedule V and would be taxable for GST/HST purposes.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 5 pre-2013 medical evauations for insurers generally exempt 274
Tax Topics - Excise Tax Act - Section 142 - Subsection 142(1) - Paragraph 142(1)(g) doctor provided single supply of medical evaluation service to insurer so that all of fee taxable notwithstanding report writing outside Canada 341
Tax Topics - Excise Tax Act - Regulations - New Harmonized Value-Added Tax System Regulations - Subsection 13(1) situs of medical evaluation for insurer based on its address rather than patient's 79

B-109 "Application of the GST/HST to the Practice of Naturopathic Doctors" 31 July 2015

Naturopathy is provincially regulated and therefore the scope of practice, and what constitutes a naturopathic service for GST/HST purposes, varies from province to province. The scope of practice for a naturopathic doctor may include, but is not limited to:

  • physical examinations/assessments (medication reviews, diagnostic testing)
  • botanical medicine
  • clinical nutrition
  • physical medicine (massage, manipulation, hydrotherapy)
  • homeopathic medicine
  • acupuncture
  • intravenous (IV) therapy
  • chelation therapy
  • hyperbaric oxygen therapy
  • lifestyle counselling

Example 4 [file review for opinion]

...The review of a file by a naturopathic doctor for purposes of providing an opinion on the diagnosis, prognosis, or treatment of an individual is a naturopathic service rendered to an individual by a practitioner of naturopathic services. ...

Example 5 [insurance co. report]

A naturopathic doctor performs an assessment and prepares a report required by an insurance company in respect of applications for, or the continuation of an insurance policy. ...

...The purpose of this supply is to assist the insurance company in determining if an individual is eligible for coverage under an insurance policy. Although the individual may ultimately receive medical or rehabilitative benefits under an insurance policy, the purpose of this supply is not to treat or assist the individual but rather to determine eligibility to enter into or continue an insurance policy. The supply is not a qualifying health care supply. ...

Example 13 [dual supply: teaching and naturopathic service]

A naturopathic doctor contracts with a teaching clinic to supervise students at the clinic. Each student interacts one-on-one with a patient for the diagnosis and treatment of a disorder under the direction of the naturopathic doctor. The patient is invoiced by the naturopathic doctor for the service she receives. ...The naturopathic doctor also invoices the clinic for the teaching services he provides.

The GST/HST will not apply to the fee charged to the patient for the service she receives where it is an exempt naturopathic service. Although the naturopathic doctor oversees the services rendered to the patient and may have interaction with the patient, the naturopathic doctor is also making a supply of a teaching service to the clinic. Where no other exempting provision applies, the naturopathic doctor is required to charge and collect the GST/HST... .

Notice 286 Draft GST/HST Policy Statement - "Qualifying Health Care Supplies and the Application of Section 1.2 of Part II of Schedule V to the Excise Tax Act to the Supply of Medical Examinations, Reports and Certificates" October 2014

CRA stated: "It is important to note that a link between a supply and the receipt of health care benefits is not always indicative that the purpose of the supply was to provide health care services... ."

Examples of qualifying health care supplies:

  • Diagnostic MRI at a private clinic on a medical practitioner's written order (Ex. 1)
  • A second diagnostic or treatment opinion provided by a second practitioner to the first (Ex. 2)
  • Medical assessment to provide sick leave certificate (Ex. 4), to assess modifications to an employee's duties or workplace (Ex. 5) or to assess need of disabled child (Ex. 9)

Examples of non-qualifying supplies:

  • Medical exam to assist in an employee recruitment decision (Ex. 3)
  • Medical assessment and report re an individual joining or buying back service in a pension plan (Ex. 6)
  • Medical evaluation required by Immigration Canada (Ex. 7) or for driver's licence (Ex. 10)
  • Mediation services of psychologist in divorce proceedings (Ex. 8)
  • Medical exam for life insurance (Ex. 11), disability (Ex. 12, 18), income replacement (Ex. 19), workplace insurance (Ex. 20, 21) or catastrophic impairment (Ex. 13) coverage
  • Medical assessment of fitness for trial (Ex. 14, 15), or expert medical opinion in litigation (Ex. 17)
  • Medical assessment of individual's capacity to consent to treatment or appointment of attorney (Ex. 16)
  • Medical assessment for insurer to determine appropriateness of proposed treatments (Ex. 22) or related review of records (Ex. 23).

Respecting Ex. 17, CRA states:

In cases where a health care service is supplied together with a medical-legal assessment…[and they] constitute a single supply... the purpose of that single supply would include the purpose for each element of the supply. Where a supply has multiple purposes, that supply would be a qualifying health care supply if any of the purposes is included in the definition of "qualifying health care supply."

Section 2

Cases

Canada v. Riverfront Medical Evaluations Ltd., 2002 FCA 341

Medical reports prepared by the respondent for supply to legal and insurance company clients qualified as an exempt supply.

Administrative Policy

26 April 2001 Ruling 35383

reimbursement to manager of nursing home of payroll not consideration for a taxable supply

Company A (a registered charity) and Company B form a joint venture to establish and operate an interim-care nursing home, with each supplying institutional health care services. Under the joint venture agreement, Company B is responsible for the day-to-day management of the nursing home and receives taxable management fees for its services. The agreement also states that the nursing home employees are employees of Company B, with Company B being reimbursed by the joint venture for their total compensation.

Ruling

The allocation to the payroll expenses to the joint venture participants are not subject to GST as the amounts are not consideration for a taxable supply.

3 November 2000 Ruling 32023

manager receives share of revenues of government-funded nursing home as taxable manger rather than as operator

The manager and a registered charity form a joint venture with respect to an interim care nursing home (fully funded by the province) of the charity under which the charity will contribute the nursing home to the joint venture and the manager will operate the home and in connection therewith incur expenses for which it will be reimbursed by the joint venture. In recognition of the manager’s management services, it will receive a priority distribution out of the surplus revenues.

Rulings that the Priority Distribution and the reimbursements are subject to GST to the extent of the manager’s interest in the joint venture. CRA stated:

The … Priority Distribution is … a payment to [the manager] for performing the day-to-day supervision, management and operation of the Nursing Home [and it] is supplying these services to the participants in the joint venture. …

[The manager] is reimbursed by the joint venture for the wages and salaries it pays to its employees. [The manager] makes a supply to the joint venture of the services of these employees [and] … is supplying these services to its co-participant [the charity]. The reimbursements of the salaries and wages would form part of the consideration for the supply.

13 June 1996 Headquarter Letter File 11865-4

A for-profit entity contracts with a hospital to supply various nursing and personal care services. The nursing services, which are rendered to individuals in the hospital, are exempt under section 6. However, the personal care services are taxable. When subsequently, the operator of the hospital makes a supply of those services, such supply is exempt under section 2.

23 January 1996 Headquarter Letter File 11865-17

After December 31, 1995 a clinic is considered to make a single supply of an institutional health care service, whereas prior to that it was characterized as making a number of supplies, of which application services, program development, specimen handling and washing and freezing activities were considered to be taxable supplies.

Section 4

Administrative Policy

CBAO National Commodity Tax, Customs and Trade Section – 2014 GST/HST Questions for Revenue Canada, Q. 36

ambulance service can be unlicensed
available with membership password at http://www.cba.org/CBA/sections_NSCTS/main/GST_HST.aspx

CRA abides by the court's determination [in Angels Of Flight Canada Inc. v. The Queen, 2009 TCC 279], that an ambulance service is not required to be licensed or certified by a province in order to be exempt pursuant to section 4 of Part II of Schedule V.

Section 5

See Also

Dr. Brian Hurd Dentistry Professional Corporation v. The Queen, 2017 TCC 142 (Informal Procedure)

single supply by incorporated orthodontist of health care services

The appellant was a professional health corporation that provided the services of an orthodontic specialist. In finding that the appellant made one supply of orthodontic treatment to a dental patient or two supplies, consisting of an orthodontic appliance and an orthodontic service, Campbell J stated (at paras 21 and 22):

The orthodontic appliance on its own is not a useful item nor are the maintenance and adjustment services on their own without the appliance. Neither the appliance nor the service on their own can achieve the patient’s goal or objective of correcting or treating their dental issues. …

In addition, the appliance and services were provided for and purchased together under a single contract for a single consideration. Although the orthodontic appliance was individually identified on the contracts for each patient, this was simply identified as 35 percent of the total fee… .

On this basis, she found (at para 35):

… The supply of orthodontic treatments were dental services, consisting of a supply of consultative, diagnostic, treatment or other health care services rendered by a medical practitioner to patients and as such are exempt supplies within the parameters of section 5 of Schedule V, Part II. Further, the single supply of orthodontic treatment by the Appellant in its dental clinic was an exempt supply pursuant to section 2 of Schedule V, Part II of the Act because the supply was made by an operator of a health care facility in respect to institutional health care service rendered to a patient of the facility.

Words and Phrases
treatment
Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 1 - Institutional Health Care Service - Paragraph (h) single supply of orthodontic services by incorporated orthodontic practice qua health care facility 155
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply single supply of orthodotic service 81
Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part II - Section 11.1 hypothetical separate supply of an orthodontic appliance by an orthodontist would have been zero-rated 207
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 1 - Institutional Health Care Service - Paragraph (b) orthodontic appliance was not a "medical prosthesis" 152

Administrative Policy

20 February 2019 Interpretation 175346 F

disproportionate fee-sharing arrangement respected

A professional dentistry corporation (“PC”) agrees with a dentist acting as independent contractor (Mr. D) that all patients treated at PC’s clinic by Mr. D are patients of PC, that PC will do all the invoicing, and that PC will pay to Mr. D 40% of the revenues generated from treatments performed by him (net of specified expenses including the payroll of contributing dental hygienists).

In finding that the 60% retained by the Recipient was not consideration for a taxable supply made by it, CRA stated (TaxInterpretations translation):

The terms of the contract clearly established that during the term of the contract, all patients treated by the [Mr. D] were patients of [PC] and that, consequently, all invoicing was to be done by [PC]. The contract terms did not include any clause for the supply of property or administrative services. Thus, the contract terms do not permit a conclusion that the portion of the net revenues retained by [PC] represented consideration for a supply.

We instead consider that the underlying character of the terms of the contract entailed a division amongst the parties of the [exempt] fees paid for health services rendered to patients.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply fee-sharing arrangement that gave a small share of revenues generated by him to a contract dentist was GST/HST exempt 302

27 April 2018 Ruling 185888

medical escort services could be single supply of physician’s services where physician involved, but not including delegated paramedic services

The Corporation provides medical repatriation services which involve arranging to transport an individual (the patient) from a foreign hospital to a health care facility in the individual’s home country. This would include transport between the medical facilities and airports via ground transportation (ambulance, taxi, or limo), and commercial airline transportation in the company of a medical escort (registered nurses, physicians and advanced cardiac life support trained paramedics). The Corporation charges a daily rate for the medical escort and a fee for the medical equipment required by the patient.

After finding that the repatriation services were a single supply, CRA went on to state:

The activities of monitoring and caring for a patient during transfer would be activities in a health care service rendered to an individual and would fall under the exemption in section 5 when rendered to an individual by a licensed physician. …

There are no provisions … to exempt the supply of paramedical services.

… The fact that a paramedic may perform certain services on the delegated authority of a physician does not change the nature of the supply. …[D]elegated services performed by paramedics are being rendered by the paramedic not the medical practitioner who allowed the delegation.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part VII - Section 15 medical repatriation services not international air ambulance services 191
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply medical escort services were single supply 215
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 6 medical escort services could be single supply of nursing services where nurse etc. involved 200

8 March 2018 CBA Commodity Tax Roundtable, Q.5

Hurd will result in reversal of practice of allowing partial ITCs

Will CRA follow Brian Hurd and deny all ITCs to orthodontists instead of allowing them to calim ITCs on 35% of their inputs, and will it permit orthodontists (and dentists implanting artificial teeth) to follow this decision only on a going-forward basis?

CRA indicated that it agreed with the conclusion reached as inter alia being consistent with the single supply doctrine and given that:

The administrative arrangement, which permits dentists to claim ITCs based on a percentage of general operating expenses, is contradictory to the ITC provisions of the … ETA … . Also, the ETA does not provide for a fixed percentage rate to be applied/used in determining the ITCs claimable on GST/HST paid or payable.

CRA nonetheless stated:

The administrative arrangement will continue to apply where a dentist or dental corporation follows the terms of the arrangement: the dentist identified the two separate supplies, for example, the invoice issued to the patient identifies the consideration for the supply of the orthodontic appliance or artificial tooth separately from the consideration for the supply of the dental service, and the ITC claim relates to mixed-use purchases (to make both taxable and exempt supplies) such as overhead and general operating expenses and certain direct expenses or inputs (for example, personal property such as arch wires used exclusively to fabricate orthodontic appliances). The administrative arrangement does not include ITCs for capital property.

Although CRA will be announcing the replacement of the administrative agreement by application of the Hurd decision, “the current administrative arrangement will continue to apply until further notice and stakeholders will be provided with advance notice so they can prepare accordingly.”

Excise and GST/HST News - No. 101 March 2017

On-call agreement of doctor with facility represents a distinct supply of a right

To meet the requirement to have a medical practitioner on call, a facility will generally enter into an agreement with a medical practitioner. These agreements generally provide that the medical practitioner will be paid a set fee for remaining on call during a given period of time. The agreements also generally provide that the medical practitioner will be paid additional amounts for intervening in patient care if and when called upon to do so during their on-call period.

When such an agreement is entered into, the medical practitioner supplies the facility with the right to call upon him or her to render health care services to the facility’s patients during a given period of time. The CRA considers this to be a distinct supply of a right by the medical practitioner that allows the facility to meet an operational requirement. …

Supply is of IPP rather than health service

[T]he nature of the supply of the right to be called upon is not dependent upon, altered, or extinguished, by a future rendering of health care services by the medical practitioner to the facility’s patients. The supply of such a right does not qualify as an exempt health care service, or part of an exempt health care service, under section 5 of Part II of Schedule V, as the supply of a right is not exempt under that section.

Accordingly, the supply of on-call coverage to the facility, whether or not the medical practitioner is contacted, would be a taxable supply of intangible personal property subject to GST/HST....

8 January 2016 Interpretation 150125

agreement of physician to be on call was a taxable property supply

A hospital wants to retain the services of a medical specialist to treat patients by paying the medical specialist a stipend to keep the medial specialist close to the hospital in order to be available on an on-call basis. Does the GST/HST apply to the “on-call” payment made by the hospital to the medical specialist?

In finding that the on-call fee was not exempted under s. 5 of Part II of Sched. V, and was subject to GST/HST, CRA stated:

… The consideration paid or payable must be directly linked to a supply of a health care service that is in fact rendered by a physician to a particular individual. …

… [T]he hospital acquired a right to call upon the physician to attend the hospital during a given time period. This right has a distinct utility to the hospital and as such…the right is a discrete supply that is separate from any health care services that may be rendered by the physician to patients of the hospital.

…For purposes of the GST/HST, “property” is defined in subsection 123(1) to mean any property, … and includes a right or interest of any kind …. As consideration for a supply of “property”, the hospital on-call fee is not consideration paid or payable for a supply of a service for GST/HST purposes. …

CRA went on to note:

If a physician’s only taxable income is generated from hospital on-call fees and these fees do not exceed the small supplier threshold, the physician would qualify as a small supplier and as such not be required to register and charge GST/HST on this fee.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Property agreement to be available to supply services was a supply of property 107

5 February 2016 Interpretation 153241

pre-2013 medical evauations for insurers generally exempt

A medical doctor residing in the U.S. who is registered for GST purposes would, at the request of insurance companies, interview and physically examine a patient in Ontario in an office usually provided by it or other interested parties and then, in the doctor’s home office, review medical documentation, and dictate and edit the report to the insurance company. Billing and other office duties also were performed in the home office. The doctor also, at the request of lawyers for victims of motor vehicle accidents, and slips and falls, would examine and interview the patient in a rented office room in Ontario, and prepare in the home office a report regarding the patient’s diagnosis, restrictions and limitations, and recommendations for treatment. Are the charges for these independent medical evaluations (IMEs) exempt from the GST/HST?

Before going on to note that in the case of supplies of IMEs made after March 21, 2013, s. 1.2 of Part II of Sched. V was added to exclude supplies whose purpose was not patient care or treatment, so that this amendment rendered IMEs taxable, CRA noted that respecting such supplies made before that date:

A supply rendered by a medical practitioner of examining an individual is a health care service rendered to an individual for purposes of section 5 of Part II of Schedule V. The element of a health care service is present in an IME when the medical practitioner applies his or her medical expertise and makes a decision regarding this information on the individual's requirement for ongoing or future medical treatment. … Accordingly, the supply of an IME by a medical practitioner is exempt under section 5… .

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 1 - Qualifying Health Care Supply medical evaluations for insurers now excluded 294
Tax Topics - Excise Tax Act - Section 142 - Subsection 142(1) - Paragraph 142(1)(g) doctor provided single supply of medical evaluation service to insurer so that all of fee taxable notwithstanding report writing outside Canada 341
Tax Topics - Excise Tax Act - Regulations - New Harmonized Value-Added Tax System Regulations - Subsection 13(1) situs of medical evaluation for insurer based on its address rather than patient's 79

May 2013 ICAA Roundtable, GST Q. 9 (reported in April 2014 Member Advisory)

meaning of cosmetic dentistry

What is cosmetic dentistry? CRA responded:

A dental procedure that is performed solely to improve the appearance of a person's teeth, gums or bite (and have no underlying medical or reconstructive purpose) would be considered a cosmetic service supply. Examples of cosmetic service supplies could include teeth whitening, gum depigmentation, gum lifts, bonding procedures and porcelain veneers (laminates) if these supplies have no medical or reconstructive purpose.

...[U]nless there is no medical or reconstructive purpose, most prosthodontic and orthodontic procedures would be covered by one or more of the exempting provisions of Part II of Schedule V:…

CBAO National Commodity Tax, Customs and Trade Section – 2013 GST/HST Questions for Revenue Canada, Q. 32.

clinic diagnosing for insurer
available with membership password at http://www.cba.org/CBA/sections_NSCTS/main/GST_HST.aspx

Individuals with a potential insurance claim for an injury or illness are sent to a clinic for diagnosis. A medical practitioner diagnoses the individual (at the clinic, the practitioner's office or the individual's home) under a subcontract with clinic and bills the clinic, which in turn bills the individual's insurer.

The supply of the diagnostic services from the clinic to the insurer would be exempt under s. 5.

Section 6

Cases

Hôpital Santa Cabrini v. Canada, 2016 CAF 207

a hospital which contracted for the services of nurses employed by a personnel-services agency was receiving a taxable supply

The appellant (the “Hospital”), which had a shortage of nurses on staff and contracted with three independent personnel-services agencies (the “Agencies”) for the services of nurses employed by them, sought a refund of the GST and QST charged by the Agencies on the ground that such services were for the supply of nursing services under Sched. V, Pt II, s. 6.

Boivin JA noted (at para. 23) that no representative of the Agencies was at the Hospital when the nurses worked there, and the Agencies had no access to patient files, the nurses did not present themselves to the patients as other than Hospital staff and that the Hospital remained the entity responsible for the delivery of care (as required under the Quebec Occupational Health and Safety Act), and stated (at para. 24, TaxInterpretations translation) that in this light:

[I]t was open to the judge to conclude that the purpose of the agreement between the Hospital and the Agencies was the supply of the nurses by the Agencies, that the provision of the care services of the Agency nurses was by the Hospital and that the latter exercised the direction and control of the Agency nurses. In sum, the Agencies supplied a placement service, thereby fulfilling a need of the Hospital for nurses’ services… .

Accordingly, the s. 6 exemption was not available.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Illegality arrangement alleged by hospital would have implicitly contravened provincial health legislation 105
Tax Topics - Income Tax Act - Section 180 - Subsection 180(3) contractual interpretation question subject to Housen standard 54

See Also

Hôpital Santa-Cabrini v.. The Queen, 2015 TCC 264, aff'd 2016 CAF 207

nurses supplied by personnel agency not exempt

The appellant (the “Hospital”), which had a shortage of nurses on staff and contracted with three independent personnel-services agencies (the “Agencies”) for the services of nurses employed by them, sought a refund of the GST and QST charged by the Agencies on the ground that such services were for the supply of nursing services under Sched. V, Pt II, s. 6. Archambault J stated (at para 23, TaxInterpretations translation):

[T]he sole purpose of the agreement between the Agencies and the Hospital is the supply of personnel, for the provision of nursing care and medical services of the Hospital, and it is the Hospital which exercises the direction and control over the work of the Agency employees and no representative of the Agencies is on site to direct or control the supply of the nursing care services.

In finding that the fees of the Agencies were not exempted under s. 6, he further stated (paras. 57, 50):

No health serviced is provided by them. There only are the rights accorded to the Hospital by the Agencies, being the direction and control of the work. These rights constitute property… . As the object of the contract is property, it cannot be a service… .

…[I]f I have erred in this conclusion…I would conclude all the same that the supply made by the Agencies does not constitute an exempt supply because it is not a health service. It instead is a personnel service.

Administrative Policy

27 April 2018 Ruling 185888

medical escort services could be single supply of nursing services where nurse etc. involved

The Corporation provides medical repatriation services which involve arranging to transport an individual (the patient) from a foreign hospital to a health care facility in the individual’s home country. This would include transport between the medical facilities and airports via ground transportation (ambulance, taxi, or limo), and commercial airline transportation in the company of a medical escort (registered nurses, physicians and advanced cardiac life support trained paramedics). The Corporation charges a daily rate for the medical escort and a fee for the medical equipment required by the patient.

After finding that the repatriation services were a single supply, CRA went on to state:

[N]ursing … includes activities such as providing treatment, assessing the health care needs of […][an individual], analyzing the findings of a health assessment, and determining the appropriate service, treatment or equipment. These are activities that a nurse would be engaged in during the transport of a patient. Therefore, supplies of medical escort services made by the Corporation are exempt supplies pursuant to section 6 of Part II of Schedule V when the service is rendered to an individual by a registered nurse, a registered nursing assistant, a licensed or registered practical nurse or a registered psychiatric nurse.

Words and Phrases
nursing
Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part VII - Section 15 medical repatriation services not international air ambulance services 191
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply medical escort services were single supply 215
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 5 medical escort services could be single supply of physician’s services where physician involved, but not including delegated paramedic services 199

Excise and GST/HST News - No. 89 (Summer 2013)

personnel v. nursing services

Where a company supplies nurses to a facility such as a hospital or a long-term care facility, the company's supply must be analyzed separately from any supply made by the operator of the facility. … If the company's responsibility is limited to providing registered or licensed nurses to the facility so that the facility may satisfy its own staffing requirements, and the nurses are subject to the control of the operator of the facility and render services under the direction of the facility in accordance with the facility's responsibility to provide care to a patient or resident of the facility, the company has made a taxable supply of personnel or human resources, and not a supply of exempt nursing services. … However, if the company is responsible for the provision of nursing services to the patients or residents of the facility and is accountable for the quality of nursing care provided, the company may have made an exempt supply of a nursing service rendered by a registered or licensed nurse to an individual, where the service is provided within a nurse-patient relationship.

8 August 2012 Ruling Case No. 128607

foot care

The provision by a registered nurse, who had received specialized foot care training, of providing foot care services to clients in their homes, was exempt.

8 August 2012 Interpretation Case No. 124636

health promotion consulting not nursing

A registered nurse who carries on business as a health promotion consultant, including health teaching or health promotion, communicating with individuals, families, groups, communities and populations, collaborating with care providers, directly or indirectly influencing the practice of care providers and/or policy, developing learning resources for nurses or other care providers and collecting health data, is not providing an exempt service. The requirement that exempt services under s. 6 be rendered to an individual within a nurse-patient relationship is interpreted

as meaning 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.

Section 7

Administrative Policy

GST/HST Technical Information Bulletin B-110 Application of the GST/HST to the Practice of Acupuncture April 2017

Meaning of “acupuncturist”

"Acupuncturist" refers to an individual who is a registered member of a provincial regulatory body for the profession of acupuncture and can legally use the title "Acupuncturist" (R.Ac), "Doctor of Acupuncture" (Dr.Ac), "Traditional Chinese Medicine Practitioner" (R.TCMP), or "Doctor of Traditional Chinese Medicine" (Dr.TCM). An acupuncturist also refers to an individual who practises the profession of acupuncture in an unregulated province or territory and has the qualifications equivalent to the qualifications necessary to be licensed in a regulated province.

Principles applicable to single v. multiple supply of acupuncture supply

[T]o correctly apply the GST/HST, it is necessary to determine whether the different treatment modalities and/or property supplied to a patient constitute a single supply or multiple supplies of a service(s) or property….

[T]he terms of an agreement (that is, the treatment agreed upon and reflected in an invoice) between an acupuncturist and patient establish what the acupuncturist is agreeing to provide and what the patient is expecting to receive for the consideration paid. However, it is important to note that the manner in which the price for a transaction is set out (for example, a single price or separately identified prices on an invoice) does not by itself determine whether there is a single supply or multiple supplies….

If a single supply is being made, then the predominant element of that supply must be established to determine the nature of the supply….

Example of multiple supply of acupuncturist and massage service

Example 2

An acupuncturist in Ontario assesses a patient and determines that the patient requires both acupuncture and massage therapy to treat the patient’s tendonitis. The acupuncturist is also registered with the College of Massage Therapists of Ontario. During the patient’s visit, the patient receives 40 minutes of acupuncture and 20 minutes of massage therapy. The patient is invoiced a separate fee for the acupuncture and massage therapy according to the percentage of time each modality was performed.

Based on the facts above, it is assumed that the acupuncturist is making two separate supplies: one of acupuncture and one of massage therapy….

Professional relationship requirement

For purposes of section 7 of Part II of Schedule V, an acupuncture service rendered to an individual means that there is a professional relationship between the individual receiving the acupuncture service and the acupuncturist for purposes of meeting the individual’s health care needs.

Separate supplies of herbal goods

Sales of products such as dried herbs and herbal goods for medicinal purposes are generally separate supplies made by the acupuncturist and do not form part of an acupuncture service. As such, most sales of these products are subject to the GST/HST. Such products also include botanical medicines, Chinese herbal medicines, and tinctures, ointments, and nutritional supplements, whether or not dispensed by an acupuncturist….

Excise and GST/HST News - No. 97 17 November 2015

Acupuncture services – need for patient relationship

Only services rendered by a practitioner of acupuncture to an individual within a practitioner-patient relationship are exempt from the GST/HST under the exemption for acupuncturists. This means that the practitioner must be a direct care provider of the patient and a relationship involving personal interaction between the practitioner and the patient must have been established for the exemption to apply. …

Overlapping exemptions (e.g., dentist/acupuncturist)

…[I]n some provinces a dentist may perform acupuncture services within the scope of practice for a dentist. In such a case, the exemption for medical practitioners under section 5 of Part II of Schedule V would apply and not the exemption under section 7 of this Part for an acupuncture service.

B-109 "Application of the GST/HST to the Practice of Naturopathic Doctors" 31 July 2015

Example 8 [nutritionist's services part of naturopathic supply]

A naturopathic doctor enters into a contract with a nutritionist to provide nutritional counselling to a patient of the naturopathic doctor. The nutritional counselling is ordered and supervised by the naturopathic doctor following an assessment of the patient. ... The patient is invoiced by the naturopathic doctor for the nutritional counselling based on an hourly rate.

Although the service is performed by the nutritionist, the service forms part of the overall naturopathic service rendered by the naturopathic doctor. The patient is a patient of the naturopathic doctor and the naturopathic doctor is ultimately liable for the provision of care to his or her patients. ...

Other Charges

...A cancellation fee paid by a patient for a missed or cancelled appointment is treated as payment for the intended supply (i.e., treatment or other naturopathic service).

Section 7.1

Administrative Policy

16 February 2016 Ruling 165366 Dietetic Services

nutritional consulting supplied to registered charity exempted

CRA ruled that the provision by a licensed dietician of “consultant nutrition services” to a registered charity (presumably in connection with a redacted charitable undertaking of assisting needy individuals) qualified for exemption.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 1 - Qualifying Health Care Supply nutiritional consulting by licensed dietician not excluded 152
Tax Topics - Excise Tax Act - Regulations - New Harmonized Value-Added Tax System Regulations - Subsection 13(1) notice clause in a services contract referenced in determining the place-of-supply 190

Section 7.2

Administrative Policy

5 July 2011 Headquarters Letter Case No. 125648

After noting that the exemption in s. 14 was applicable to training and support services provided by a for-profit corporation to children with neurological or developmental disorders who required assistance with behavioural difficulties, social skills, verbal and non-verbal communication, personal care and day-to-day functioning, CRA noted that the corporation had a social worker on staff and noted that the exemption in s. 7.2 also potentially was available. It stated:

Section 7.2 applies not only to services rendered to the individual with a disorder or disability, but also to services rendered to an individual who is a relative or caregiver of an individual with a disorder or disability, provided the services fall within the practice of the profession of social work and are rendered within a professional-client relationship. The exemption does not, however, apply to services provided by a social worker to an individual who provides care or supervision to the individual with a disorder or disability in a professional capacity, such as another social worker, a teacher or a personal care aide.

Section 7.4

Administrative Policy

GST/HST Notices - Notice 311, Proposed Exemption of Multidisciplinary Health Care Services, May 2019

total rehab service is taxable if substantially all test not satisfied
Example 2

A corporation operating a rehabilitation clinic for individuals with minor injuries receives a fixed price from the insurer regardless of the mix of services provided. The corporation also makes supplies of the component types of services to other individuals for an hourly fee. The total fee could be reasonably allocated to the component chiropractic, physiotherapy, acupuncture and massage therapy services based on the respective hours and hourly rates. This produced respective percentages, with the result that 82% of the consideration could be reasonably allocated to the chiropractic, physiotherapy and acupuncture, thereby being exempt under s. 7 if separately supplied, whereas the 18% of the fixed fee allocable to the massage therapy (if separately supplied) would be taxable. Such 82% would not be “substantially all” so that s. 7.4 would not apply. – “the supply of the rehabilitation program would be subject to the GST/HST.”

Example 3

Similar to Example 2 except that only 8% of the consideration could be reasonably attributed to the massage therapy services. As 92% (substantially all) of the consideration can reasonably be attributed to the services that would be included in ss. 5 to 7.3 of Part II of Sch. V if they were supplied separately, the supply is exempt under s. 7.4..

Example 4

Similar to Example 3, respecting rehab services reasonably attributable to social work and OT services (exempt under ss. 7.2 and 7) as to 30% and 35%, respectively, and reasonably attributable to kinesiology and massage therapy services (as to the balance).

Section 9

Administrative Policy

10 January 2017 Ruling 165757

medical clinic providing its facilities to doctors in exchange for a percentage of their provincial health-care plan billings was making a single supply of administrative services

The registered Corporation, which operates a medical clinic (the “Clinic”) at which it is authorized by the relevant provincial regulatory body to provide the services at the Clinic, and which leases the office space for the Clinic, rents or owns all of the equipment, provides all of the medical supplies, employs all of the staff including the nurses and technicians, and provides certain drugs, agreed with the Service Providers that it will provide the necessary facilities for the performance of the contracted services and that they will pay XX% of all their billings to the provincial Health Care Plan to the Corporation (which are its only source of revenue). The invoices issued by the Corporation to the Service Providers detail the total Service Provider billings for the time period as per the provincial Health Care Plan, list the medical services and supplies to the Service Provider, and calculate the percentage amount payable to the Corporation. All of the procedures performed on the patients are covered under the Health Care Plan.

After ruling that the Corporation was making taxable supplies to the Services Providers, CRA state that “the fact that the Corporation receives a portion of the [Province X Health Care Plan] fees does not mean that [the Province X Health Care Plan] pays the Corporation,” noted that the Service Providers were making exempt supplies to the Province under Sched. V, Pt. II, s. 9, CRA turned to the supplies made by the Corporation and stated:

The […] Agreement indicates that the [Service Providers] agree to provide the services as described in […] through their profession… .

…The terms of the Agreement, the invoices and the marketing material demonstrate that the Corporation is making a single supply of administrative services to the [Service Providers]. Based on the facts presented, it is our view that the percentage of [the Province X Health Care Plan] fees that are paid by the [Service Providers] to the Corporation constitutes consideration for a taxable supply of administrative services.

14 April 2000 Headquarter Letter 7741

With respect to a medical clinic that retained physicians to provide services to patients, CCRA indicated that notwithstanding that the billings for the services were made by the clinic, it was reasonable to characterize the arrangement as involving the receipt of proceeds by the physicians, with the share of the clinic in the proceeds representing consideration for the provision by it of taxable administration and operational services. Therefore, the portion of the proceeds belonging to the physicians remained exempt pursuant to section 9.

Section 10

Administrative Policy

25 June 2018 Ruling 143194

kinesiology services not exempt

After noting that the practice of kinesiology is not a regulated health care profession in B.C. and kinesiology services were not covered under the Medical Services Plan of B.C., CRA indicated to a member of the B.C. Association of Kinesiologists, who provided various treatments to patients, that “as kinesiology services are not listed in the Health Care Services (GST/HST) Regulations … they are not exempt from GST/HST under section 10 of Part II of Schedule V.”

Section 13

See Also

Cartier House Care Centre Ltd. v. The Queen, 2015 TCC 278

personal care services provided by independent contractors were exempted

Each appellant, which was a for-profit operator of a B.C. residential care home (in the case of "CH") or a B.C. assisted living facility (in the case of "CT"), was invoiced periodically, based on an flat hourly rate, by a third-party independent contractor ("HARPS," or "SimpeQ," respectively) for the services of their "care aides" (who performed personal services and provided assistance to residents with the activities of daily living, including bathing, dressing, grooming, transferring, skin, nail and mouth care, meal preparation and feeding, washroom and medication assistance and incontinence management), in the case of CH, "activity aides" (who focused on social activities for the residents), as well as laundry and housekeeping services for both homes. The regional health authority ("FHA") funded "Health Services" including assistance with the activities of daily living including bathing, dressing, grooming, transferring, feeding, incontinence management, and emotional and social support, but not "Hospitality Services" including social and recreational programs, laudry and "homemaking" services.

After finding that the provision of the services of the care aides qualified as a "homemaker service," Paris J rejected a Crown submission that HARPS and SimpeQ were instead providing personnel services, stating (at para. 56) that "The contracts between SimpeQ and CT and between HARPS and CH clearly provide for the supply of services including care services, hospitality services and housekeeping services." Respecting the requirement in s. 13(1) that the "services be rendered to an individual in the individual's place of residence" and a Crown submission that "the place of residence of the residents was restricted to their individual suites" (para. 57), he stated (at para.58) that:

[B]oth Courtyard Terrace and Cartier House were used solely as places of residence for the residents. Therefore, it seems artificial to distinguish between the residents' units or rooms and the remainder of the premises when determining their place of residence.

In finding (at para. 66) "that FHA was administering a government program in respect of homemaker services," as required by the preamble to s. 13(1)(b)(ii), Paris J stated (at para. 66) that "it is only necessary, then, to show some connection between the B.C. Continuing Care program and the provision of the homemaker services by SimpeQ and HARPS."

And in finding that FHA paid amounts to CT and CH for the purpose of acquiring the homemaker services, he stated (at para. 70):

While the entire cost of the homemaker services that CT contracted SimpeQ to provide and that CH contracted HARPS to provide may not have been borne by FHA in each case, it did pay an amount to each of them for the purpose of acquiring the homemaker services and therefore the requirements of subparagraph 13(b)(ii) of Part II have been met.

See summary under Sched. V, Pt. II, s. 1 – home care service.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 1 - Home Care Service "personal care" included ADL assistance 383
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 1 - Institutional Health Care Service accommodation an institutional health care service 200
Tax Topics - Excise Tax Act - Section 138 s. 138 did not apply where the allocation of consideration among the components was apparent 234
Tax Topics - Statutory Interpretation - Interpretation/Definition Provisions general phases in definition not limited by following specific enumeration 171
Tax Topics - Statutory Interpretation - Noscitur a Sociis noscitur a sociis did not apply to general phases preceding list 194

Section 14

Administrative Policy

5 July 2011 Headquarters Letter Case No. 125648

The exemption in s. 14 was applicable to training and support services provided by a for-profit corporation to children with neurological or developmental disorders who required assistance with behavioural difficulties, social skills, verbal and non-verbal communication, personal care and day-to-day functioning. The services included the provision of counselling, training or coaching, support and respite services to the parents or other caregivers. The corporation was generally compensated though third-party government funding in which a parent of the child received funding from a provincial Ministry. The majority of the corporation's clients were referred by a paediatrician or a child psychiatrist. Favourable rulings were given respecting other similar activities. CRA stated:

We note that specially designed training does not have to be provided on a one-for-one basis in order to fall within section 14.

Part III

Section 1

Elementary or Secondary School Student

Administrative Policy

GST/HST Memorandum 20-1 "School Authorities - Elementary and Secondary Schools" December 2019

Scope of exclusion for kindergarten programs

Example 1

Children in Province A must be 4 years old by December 31 in order to enter their first year of elementary school. By contrast, children in Province B must be 5 years old by December 31 in order to enter their first year of elementary school. The elementary schools in Province A and Province B are school authorities in their respective provinces.

In addition, Province B operates a kindergarten program for children who do not meet the requirement of being 5 years old by December 31. The kindergarten program is not considered to be part of the elementary school program in Province B.

Regardless of the fact that the age requirement for enrollment in a school authority in Province A and Province B differs, children enrolled in an elementary school operated by a school authority and in courses that are at the elementary level of education in Province A or Province B meet the definition of elementary or secondary school student.

However, the kindergarten program does not meet the standards of educational instruction established by the government at the elementary level in Province B. Therefore, the children enrolled in the kindergarten program in Province B do not meet the definition of elementary or secondary school student.

Vocational School

Administrative Policy

GST/HST Memorandum 20-4 “Vocational Schools and Courses” December 2019

Typical attributes of vocational school

4. An organization that qualifies as a vocational school generally exhibits a number of the following characteristics:

  • it is normally a corporation or an unincorporated association of some type (however, in some cases, the organization could be made up of a single individual)
  • it identifies or advertises itself as a school and is known publically as a school
  • it offers courses or programs following a scheduled curriculum under which the courses progress in the depth of learning from semester to semester
  • it has a regularly enrolled student body that forms a class or classes
  • it owns/rents/leases a site from which students are provided correspondence courses or instruction in courses
  • it receives tuition, which is paid by the students (or the parents/guardians), for the provision of the correspondence courses or the service of instruction

“Established primarily” test

7. The CRA will consider an organization to be established primarily to provide correspondence courses, or instruction in courses, that develop or enhance students’ occupational skills if the organization provides documentation showing that the primary purpose (that is, the chief or most important purpose) for the establishment of the organization is to provide correspondence courses, or instruction in courses, that develop or enhance students’ occupational skills.

“Operated primarily” test

12. The second requirement is that the organization be operated primarily to provide correspondence courses, or instruction in courses, that develop or enhance students’ occupational skills. The CRA will consider this requirement to be met if more than 50% of the organization’s total annual revenues are attributable to the provision of courses that enhance occupational skills. All of the organization’s business revenue streams must be included when calculating the percentage attributable to the provision of courses that enhance occupational skills.

  • enhance occupational skills

14. An organization that is commencing operations, or is considering commencing operations, will be considered to be operated primarily for the purposes of meeting the “operated primarily” requirement if its intent is to primarily offer correspondence courses, or instruction in courses, that develop or enhance students’ occupational skills. Documents such as an organization’s business plan may help to determine the organization’s intent.

15. Organizations must review their operations on an annual basis to determine whether they continue to meet the “operated primarily” requirement of the definition of vocational school.

16. For example, if an organization met the “operated primarily” requirement in a fiscal year and its intent is to primarily offer courses that enhance occupational skills, it will continue to be a vocational school in the following fiscal year. However, if the portion of the organization’s total annual revenues attributable to the provision of courses that enhance occupational skills falls to 50% or less during the following year, it may cease to be a vocational school for supplies made after that year.

Development or advancement test

18. Finally, to qualify as a vocational school, an organization must provide correspondence courses, or instruction in courses, that develop or enhance students’ occupational skills. These courses must meet at least one of the following requirements:

  • they must have a direct link to skills that are essential for an individual to become employed in a particular field (that is, to gain employment in that field)
  • they must directly build upon and/or enhance an individual’s skills in their chosen field, such that they can continue to work in that field (that is, to retain employment in that field)

22. Stand-alone courses that are provided over 1 or 2 days to meet provincial health and safety legislation do not, on their own, qualify as courses that enhance occupational skills.

Frequent exclusion of sole proprietors

25. A sole proprietor who provides instruction during private, one-on-one lessons with students while using programs customized for each student is normally not regarded as a vocational school. …

26. A sole proprietor, such as a teacher or a coach, who has a contract with a vocational school to provide a service of instruction as one of the sole proprietor’s business revenue streams is not considered a vocational school for purposes of that contract. This is because the self-employed person supplies the service to the vocational school … .

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part III - Section 6 94
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part III - Section 8 450
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply bifurcation what otherwise might be a single supply of flight training time into a taxable and exempt component 65

Section 10

Administrative Policy

GST/HST Memorandum 18-2 “Provincial Governments” February 2020

Examples of exempt provincial government supplies

16. … [A] number of provisions listed in Part VI of Schedule V to the Act that exempt certain supplies by public sector bodies apply to such supplies when made by a government, such as section 10 of Part VI of Schedule V to the Act, which exempts a supply made by a government of property, like a brochure, or services, such as training, where at least 90% of the brochures or training are provided for free.

Section 2

Administrative Policy

GST/HST Memorandum 20-1 "School Authorities - Elementary and Secondary Schools" December 2019

Test is based on intent

10. ... Since the wording is “provided primarily for” rather than “provided primarily to”, this condition will be satisfied as long as the course is provided with the intent that primarily elementary or secondary school students will be taking the course.

Exclusion for some kindergarten programs

12. It is important to note that although the government of a province may have established educational standards for kindergarten programs offered within the province, those programs may still not form part of the elementary school program. Where an organization operates a kindergarten independently from an elementary school, the kindergarten program may fall under a provincial early childhood learning program that is not part of the elementary school program. Such programs may, however, be exempt under other provisions of the Act, such as section 1 of Part IV of Schedule V, which exempts a supply of child care services the primary purpose of which is to provide care and supervision to children 14 years of age or under for periods normally less than 24 hours per day.

Exemption can extend to on-line instruction

70. The exempt supplies described under sections 2, 7, 8, 11 and 16 of Part III of Schedule V may also be made where a school authority makes an online supply of a service of instructing individuals in courses via the Internet as opposed to a traditional classroom setting where the conditions of the respective section are met. As well, section 18 of Part V of Schedule VI may also apply to zero-rate an online supply of a service of instructing non‑resident individuals.

71. It can, however, be difficult to determine whether a supply made online is the supply of a service (and thus possibly exempt under section 2, 7, 8, 11 or 16 of Part III of Schedule V or zero‑rated under section 18 of Part V of Schedule VI) or of intangible personal property as this determination is based on a number of factors, as well as the specific facts of the particular case. Refer to GST/HST Technical Information Bulletin B-090, GST/HST and Electronic Commerce, for information on determining whether a supply made online is a supply of a service or of intangible personal property.

Section 3

Administrative Policy

GST/HST Memorandum 20-1 "School Authorities - Elementary and Secondary Schools" December 2019

Meaning of extra‑curricular activities

14. The Act does not define the term extra‑curricular activity. For purposes of section 3 of Part III of Schedule V, the Canada Revenue Agency (CRA) views extra‑curricular activities to be activities that do not generally take place during regular school hours, are not part of a school curriculum, and are not requirements to complete any course. The CRA does not stipulate the type of activity that qualifies; however, it must be an activity that is organized under the authority and responsibility of the school authority.

15. For purposes of section 3 of Part III of Schedule V, extra‑curricular activities can also include activities that are supplied to students by a student council or a school club, provided the council or club is part of the school authority (that is, it is not a separate legal entity) and the activities can be said to take place subject to the authority and responsibility of the school authority.

16. An extra‑curricular activity is generally considered to take place under the authority and responsibility of the school authority if persons employed by or under contract with the school authority, or volunteers reporting to the school authority, supervise and control the activity.

17. The exemption under section 3 of Part III of Schedule V does not apply to supplies made by third parties to elementary or secondary school students. Although the exemption under section 3 applies to supplies of food and beverages, it does not apply to supplies of other tangible personal property such as class rings and school sweaters. Such supplies would be subject to the GST/HST unless exempt under another provision of the Act.

Example of school-sponsored dance

Example 3

A school authority organizes a school dance primarily for the students of the school. Students are allowed to bring a guest. … The school authority’s principal provides a budget to the student council, which is part of the school authority, to provide decorations and authorizes the student council to sell the tickets to the students during school hours.

Admission … to the dance is exempt under section 3 … .

Section 4

Administrative Policy

GST/HST Memorandum 20-1 "School Authorities - Elementary and Secondary Schools" December 2019

Example of shop student providing repair services

Example 4

A school authority supplies auto repair services that are performed by students as part of their instruction in an auto‑body course.

As the auto repair services are supplied by a school authority and performed by students in the ordinary course of the instruction of those students, the services are exempt under section 4 of Part III of Schedule V.

Distinction between instruction and admission to a seminar

62. A school authority may offer seminars, activities or other events to its students or members of the general public; however, such events are generally not considered to be a supply of instruction in courses for GST/HST purposes.

63. The supply of instruction in courses is a service for GST/HST purposes and is exempt from the GST/HST if it meets the requirements set out in Part III of Schedule V or zero‑rated if it meets the requirements set out in section 18 of Part V of Schedule VI.

64. By contrast, the supply of an admission to a seminar, activity or event is a supply of intangible personal property for GST/HST purposes and may be subject to the GST/HST. …

68. The following are some of the factors that generally indicate that a given supply is a supply of a service of instruction:

  • The activity involves the provision of systematic instruction.
  • The supplier monitors or supervises the participant’s progress or learning.
  • The supplier assesses the participant’s progress during the course of the activity and provides ongoing support, feedback and guidance to the participant.
  • The supplier may be available to assist the participant with the subject matter at a time and location different from the time and place in which the activity occurs.
  • The supplier assesses the participant’s competency upon completion of the activity by requiring the participant to formally demonstrate the knowledge acquired. If the competency is not achieved, the activity may have to be repeated.
  • The participant is required to invest time and effort outside of the activity in order to complete assignments, read course material, etc.
  • The participant may be required to successfully complete verified prerequisites before taking part in the activity.
  • The participant may be required to successfully complete the activity before being permitted to participate in another activity.
  • The activity is part of a series of activities leading to a formal recognition of skills, such as a diploma, degree or licence.
  • The activity may be part of a program that consists of a series of 2 or more related activities.
  • The activity occurs at set intervals over an extended period of time (for example, weeks or months).
  • The activity does not include the provision of rights or, if there is a provision of rights, they are incidental to or part of the single supply of a service (for example, the right to use a laboratory or a darkroom facility).
  • The subject of the activity is broad (for example, writing).
  • The supplier advertises or promotes the activity as being intended to instruct participants.
  • The activity is promoted together with other activities in a prospectus or calendar prepared by an educational institution.
  • The promotional material indicates that the activity is part of a broader program that may lead to a formal recognition of skills, such as a diploma, degree or licence.
  • The promotional material is aimed at persons who have the prerequisites required to participate in the activity.

Supply of an admission to a seminar, activity or event

69. The following are some of the factors that generally indicate that a given supply is a supply of an admission to a seminar, activity or event:

  • The supplier and the participant engage in minimal individualized interaction.
  • The participant need only attend the activity to receive evidence of successful or satisfactory completion of the activity.
  • The supplier’s purpose with respect to the activity is principally to provide information to, or to facilitate the exchange of information among, participants.
  • The subject of the activity is narrowly‑focused (for example, study skills for first-year students or money management techniques).
  • The activity is discrete from other activities offered by the supplier, with no formal prerequisites for attendance.
  • The participant is not required to take part in the activity as a prerequisite for participating in another activity.
  • The activity is promoted as a stand‑alone activity.
  • The activity is promoted to the general public.
  • The activity is promoted as a seminar, workshop or similar event.
  • The activity occurs during a brief, concentrated period of time (for example, a number of hours, a day or several consecutive days).

Section 5

Administrative Policy

GST/HST Memorandum 20-1 "School Authorities - Elementary and Secondary Schools" December 2019

Supplies of transportation services to other school authorities may be exempt under Sched. V, Pt. VI, s. 2

20. Supplies of transportation services made by a school authority to another school authority are not exempt under section 5 of Part III of Schedule V. Such supplies are therefore subject to the GST/HST when made by a registrant unless exempt under another provision of the Act. For example, where the school authority making the supply is a public institution as defined in the Act, supplies of transportation services made by the public institution to a school authority are exempt under section 2 of Part VI of Schedule V.

Section 6

Administrative Policy

GST/HST Memorandum 20-2 “Public Colleges” December 2019

Example of regulatory body requirement not satisfied

Example 5

Corporation A charges a fee for administering an exam and issuing a certificate in a profession that is recognized by several boards in different provinces. Neither Corporation A nor any of these boards are a regulatory body. The certificate in question is not a professional or trade accreditation or designation that is recognized by any regulatory body.

As the certificate is not in respect of an accreditation or designation that is a professional or trade accreditation or designation that is recognized by any regulatory body, the fee charged for administering the exam and issuing a certificate is not exempt under section 6 of Part III of Schedule V.

GST/HST Memorandum 20-4 “Vocational Schools and Courses” December 2019

Example of non-qualifying body

Example 2

An organization was established to develop and administer a national examination for emergency responders. Although the organization is supplying a service of administering an examination in respect of an accreditation or designation, section 6 of Part III of Schedule V does not apply to the organization because the organization is not a professional or trade association, government, vocational school, university, public college or regulatory body. Therefore, the supply made by the organization of the service of administering the examination is not exempt under section 6 of Part III of Schedule V.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part III - Section 1 - Vocational School 684
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part III - Section 8 450
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply bifurcation what otherwise might be a single supply of flight training time into a taxable and exempt component 65

GST/HST Memorandum 20-9 “Election to Make Exempt Supplies of Educational Services Taxable” December 2019

Engaging ITC or change-of use rules

11. Where an election has been made under section 6 and/or section 8 of Part III of Schedule V, a GST/HST registrant supplier may be eligible to claim an input tax credit (ITC) for the GST/HST paid or payable by the registrant on property or a service based on the extent to which the property or service is acquired by the registrant for consumption, use or supply in the course of the registrant’s commercial activities, where all of the conditions for claiming an ITC are met. Where the GST/HST registrant supplier has made the election, it may be required to apply the change-in-use rules for capital personal property and capital real property.

12. If a supplier revokes a previously made election, it … may be required to apply the change-in-use rules for capital personal property and capital real property.

Election not filed

14. There is no need to submit the election form to the CRA, but it must be retained in the supplier’s books and records while an election is in effect and for 6 years from the end of the year to which an election relates.

Election must be made under both sections if both apply, but single form used

16. If a particular supply meets the requirements for exemption under both section 6 and section 8 of Part III of Schedule V, the supplier must make an election under both sections to ensure that the supply will not be exempt under either of these sections. Although a single form may be used to make the elections, the Act is clear that these are 2 separate exempting provisions that have different criteria and different persons who may elect. Where the criteria of both exempting provisions are met, a person must make both elections so that neither exempting provision will apply.

Other exemptions override election

17. Even where an election is made under section 6 and/or section 8 of Part III of Schedule V, the supply will remain exempt if it meets the requirements of another section of Schedule V. For example, section 7 of Part III of Schedule V exempts “a supply made by a school authority, public college or university of a service of instructing individuals in, or administering examinations in respect of, courses for which credit may be obtained toward a diploma or degree”, and section 1 of Part V.1 of Schedule V provides for a general exemption for supplies made by charities except for those supplies listed in that section.

GST/HST Memorandum 20-3 “Universities” December 2019

Accreditation requirement/exemption application to all students

18. An accreditation or designation is an official authorization that attests to the fact that an individual has met certain pre-determined standards set forth by a regulatory body. Examples include trade accreditations, such as welding tickets, and professional designations, such as P.Eng (Professional Engineer).

19. The supply of a certificate or of a service of instruction or of administering an examination that is exempt under section 6 of Part III of Schedule V is exempt for all students in the course, including those who are not taking the course to obtain, maintain or upgrade an accreditation or designation.

20. Section 6 of Part III of Schedule V does not exempt the supply of a service of instruction or of administering an examination in a course that is not required for accreditation or designation but simply broadens one’s knowledge in a field. In addition, section 6 does not exempt the supply of a service of instruction or of administering an examination in a course that may be occupationally related and required for accreditation or designation by a professional association if there is no regulatory body.

23 April 2019 GST/HST Ruling 186334 - S AND INTERPRETATIONS - Annual licensing fees and public service bodies’ rebate eligibility

jurisprudence exam fee exempt, but not charge for processing exam administered by another body

An incorporated non-profit organization (the “Organization”), perhaps a provincial law society charges a fees for its test of knowledge of jurisprudence. CRA stated:

If the [Organization] is the supplier of the jurisprudence test, that is the [Organization] is administering the examination, then the jurisprudence test fee would be consideration for a “supply of […] a service of administering an examination […] in respect of [a professional or trade accreditation or designation recognized by a regulatory body] where the supply is made by […] the regulatory body”. Where this is the case, the supply of the jurisprudence test would be exempt … .

However, respecting a provincial exam fee, CRA stated:

[T]he [Organization] is not the person supplying the service of administering the [exam]. Therefore, the “provincial exam fee” is consideration for a service of processing an application.

There is no provision that would apply to exempt this supply … .

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 20 law society was an “other body established by a government” 57
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 20 - Paragraph 20(c) consideration for licensing included expired licence fees 43
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 20 - Paragraph 20(b) - Subparagraph 20(b)(i) exempt processing and registration fees of professional society 62
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Debt Security NSF cheque charge exempt as for debt security 82

7 April 2016 Interpretation 167824 Certifications and Examinations

certification not recognized by a regulatory body

A non-profit professional association offers continuing education and credit courses to certain post-secondary institutions. Individuals may apply to the association to be authorized to use a particular professional designation after completing courses. The association offers Exam Y which is not recognized by any regulatory body and issues Certificate Y to individuals who pass the exam.

In finding that the supply of the exam was not exempted, CRA stated:

…[A]n organization which has not been empowered by a legislative statute to regulate a particular profession or trade will not be considered to be a regulatory body for the purposes of section 6 of Part III.

As there is no federal or provincial statute that constitutes or empowers [the Association] to regulate a particular profession or trade, and [the Association] is not empowered to bestow a particular professional or trade accreditation or designation, [the Association] is not a "regulatory body" as defined in section 1 of Part III of Schedule V.

In order for a supply of a certificate or an examination to be exempt under section 6 of Part III of Schedule V, the supply must be made by a professional or trade association, government, vocational school, university, public college or a regulatory body, and it must be in respect of a course, or in respect of an accreditation or designation that leads to or maintains or upgrades a professional or trade accreditation or designation recognized by a regulatory body. …

… Based on the information provided, we are unable to determine whether [the Association] is a professional or trade association.

However, even if [the Association] were a professional or trade association, … neither the [Designation X] certification nor the …[Certification Y] is recognized by any regulatory body. Therefore, section 6 of Part III of Schedule V would not apply to the service of supplying a certificate authorizing the use of [Designation X] or administering the [Certificate Y] examination. As such, both of these services provided by [the Association] will be subject to the GST/HST, unless exempt under some other provision of the ETA.

Section 7

Cases

Alexander College Corp. v. Canada, 2016 FCA 269

private college granting associate degrees qualified

A private for-profit B.C. college with a two-year arts program provided "associate degrees," which were recognized as degrees under the Degree Authorization Act (B.C.). Gleason JA found that the college unambiguously qualified as a university under the s. 123(1) definition, so that its fees were GST-exempt, and so that there was no further requirement (as found by Lyons J below) that it also be recognized as a university under provincial law (which was not the case.)

Gleason JA also noted (at para 27):

…[P]rivate universities are exempt in terms of enumerated supplies but are not entitled to claim either input tax credits or the public service body rebate. Thus, a similar result in the case of private colleges like Alexander College cannot be said to be contrary to the scheme of the ETA.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - University private college providing "associate degrees" qualified as a “university” for GST purposes 178
Tax Topics - Statutory Interpretation - Interpretation/Definition Provisions "means" definition can depart from ordinary meaning 122

See Also

Alexander College Corp. v. The Queen, 2015 TCC 238, rev'd 2016 FCA 269

private college was not a recognized institution, and its "associate" (non-baccalaureate) degrees were not degrees

A private for-profit B.C. college with a two-year arts program provided "associate degrees," which were recognized as degrees under the Degree Authorization Act (B.C.). Lyons J found that it did not qualify as a university (so that its tuition fees were subject to HST) on the grounds that:

  • income tax cases (e.g., Zailo) treated associate degrees as not being real degrees
  • it was prohibited under the Degree Authorization Act from calling itself a university, which suggested that it was not "recognized" as an "institution" by the B.C. government
  • Sched. V, Pt. III, s. 7 also exempts "public colleges," and the definition itself assimilates affiliated colleges to "university," which suggests that "university" is intended to refer to something more than a mere private college.

See summary under s. 123(1) - university.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - University private college was not a recognized institution, and its "associate" (non-baccalaureate) degrees were not degrees 236

Administrative Policy

Excise and GST/HST News - No. 107 February 2020

Old policy on “university”

Under the CRA’s previous policy, educational institutions were required to grant degrees at the bachelor’s level or higher to be a “recognized degree granting institution” within the definition of university under the Excise Tax Act, thereby excluding institutions, such as a college, that grant two-year associate degrees. The only way for an organization that operates a college to be a university for GST/HST purposes was for the college to be affiliated with a degree-granting institution.

New policy on “university”

As a result of … Alexander College … a “recognized degree-granting institution” will now include a college or similar organization that is authorized by a province under provincial legislation or a governmental body in a foreign entity’s home jurisdiction to grant a degree where degree is defined in the applicable legislation to include an academic achievement at the associate level or higher. Therefore, while the academic level of achievement must still be a degree, the CRA no longer requires the degree to be at the baccalaureate level or higher.

Accordingly, where a college or similar organization meets the requirements to be a recognized degree-granting institution explained below, the college or similar organization will be a university for GST/HST purposes ... .

GST/HST Memorandum 20-2 “Public Colleges” December 2019

Example of exempted course taken by non-diploma student

Example 5

Public College P offers a variety of courses to the general public through its Continuing Education Department. Among the courses offered is an intermediate accounting course that is the same credit course offered by Public College P to students enrolled in its accounting program and that must be completed in order to earn a diploma. An individual who wishes to upgrade their accounting skills for employment purposes registers for the intermediate accounting course.

Although the individual is not enrolled in a diploma program at Public College P, the accounting course is a course for which credit may be obtained toward a diploma. As such, Public College P’s supply of instructing the individual in the course is exempt from the GST/HST

GST/HST Memorandum 20-3 “Universities” December 2019

Example of enrolment for personal reasons not tainting exemption

Example 5

University F allows members of the public who meet certain minimum criteria to enroll in courses at the University for reasons that include personal interest and professional development. Among the courses offered is a Canadian literature course that students in University F’s Bachelor of Arts program must complete in order to earn a degree. An individual who is not enrolled in a degree program and who has a personal interest in Canadian literature registers for this course.

Although the individual is not enrolled in a degree program at University F, the Canadian literature course is a course for which credit may be obtained toward a degree. As such, University F’s supply of instructing the individual in the course is exempt from the GST/HST.

Application of single-supply doctrine

39. If the service of instruction and course materials form part of a single supply of a service of instruction and the supply of the service of instruction is an exempt supply, the course materials included in the single supply will not be subject to the GST/HST.

Distinction between instruction and admission to event (before listing of 27 distinguishing factors)

57. The supply of instruction in courses is a service for GST/HST purposes and is exempt from the GST/HST if it meets the requirements set out in Part III of Schedule V or zero-rated if it meets the requirements set out in section 18 of Part V of Schedule VI.

58. By contrast, the supply of an admission to a seminar, activity or event is a supply of intangible personal property for GST/HST purposes and may be subject to the GST/HST.

GST/HST Memorandum 20-1 "School Authorities - Elementary and Secondary Schools" December 2019

Students may not necessarily be taking the courses as part of a diploma program

23. The supply of a service of instructing in credit courses made by a school authority is exempt even if the supply is made to students who are not enrolled in a diploma program. Consequently, the exemption applies to supplies of instruction in courses for which credit toward a diploma may be obtained where those courses are offered by a school authority, either at night as part of a continuing education program or during the day, even if some students are not taking the courses as part of a diploma program.

Section 7.1

Administrative Policy

GST/HST Memorandum 20-3 “Universities” December 2019

Examples: student union counselling services fees

25. Examples of the supplies referred to in section 7.1 of Part III of Schedule V include supplies of student union memberships and counselling services where the consideration for these supplies must be paid by students because they receive a supply that is exempt under section 7 of Part III of Schedule V.

GST/HST Memorandum 20-1 "School Authorities - Elementary and Secondary Schools" December 2019

Memorandum 20-2, "Public Colleges" paras. 23-25 is similar

Can apply to student club memberships or 3rd-party suppliers

25. Examples of the supplies referred to in section 7.1 of Part III of Schedule V include supplies of various student club memberships where the consideration for these supplies must be paid by students because they receive a supply that is exempt under section 7 of Part III of Schedule V.

26. There is no requirement that the supplies under section 7.1 and section 7 of Part III of Schedule V be made by the same supplier. As is the case with the exemption under section 7, the exemption under section 7.1 applies even if the supply is made to students who are not enrolled in a diploma program.

27. The exemption under section 7.1 of Part III of Schedule V does not apply to mandatory fees in respect of a supply of tangible personal property, such as a musical instrument or lab equipment, that is required for use in a course. Such supplies may, however, be exempt under another section of the Act.

Section 8

Administrative Policy

GST/HST Memorandum 20-4 “Vocational Schools and Courses” December 2019

Example of requirement for testing and attestation

Example 6

A vocational school offers a diploma program in computer programming, which is offered on a pass/fail basis, determined by the students’ performance on tests, quizzes, assignments and projects. The program leads to a diploma that attests to the competence of individuals to practise or perform the trade or vocation of software developer. …

In addition to the diploma program, the school offers 3 courses:

  • “Enhancing Your Webpage with Java”, which is also a credit course in the diploma program [exempt]
  • “Programming in C++”, which is offered as an upgrade program and for which students are graded on a mid term assignment and final exam [exempt]
  • “Supporting and Implementing Windows”, which is not offered as part of the diploma program and for which students are evaluated based on class attendance and participation

Certificates are issued to students upon completion of each of the courses. …

… [T]he supply of instruction in “Supporting and Implementing Windows” is not exempt under section 8 of Part III of Schedule V, regardless of the fact that a certificate is issued upon successful completion of the course. This course is not offered as a credit in a diploma program nor is it evaluated on a pass/fail basis, based on the students’ performance on tests, graded materials or projects. As the successful completion of this course is based solely on attendance and class participation, the certificate issued at the end does not attest to the competence of individuals to practise a trade or vocation.

Supply of solo and dual flight time above the Canadian Aviation minimum is taxable

51. The CRA has classified the federally required flight time into the following categories:

  • dual flight time
  • solo flight time
  • build-up flight time

52. The CRA considers an individual to be under instruction and direct supervision while amassing dual and solo flight time hours.

53. Build-up flight time refers to additional flight time that must be completed by an individual, over and above dual and solo flight time, in order to obtain a pilot licence, a rating in respect of that licence, or a flight instructor rating or associated class. The CRA does not consider an individual to be under instruction and direct supervision while amassing build-up flight time hours. …

55. Where a student purchases hours of dual or solo flight time over and above the minimum time requirements in the federal legislation, the supply of the additional hours is not exempt under section 8 … .

56. The supply of build-up flight time relating to any of the above licences or ratings is also not an exempt supply for purposes of section 8 of Part III of Schedule V because students are not under instruction or direct supervision during this time.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part III - Section 1 - Vocational School 684
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part III - Section 6 94
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply bifurcation what otherwise might be a single supply of flight training time into a taxable and exempt component 65

GST/HST Memorandum 20-9 “Election to Make Exempt Supplies of Educational Services Taxable” December 2019

Points made include:

  • Making the election results in the body having a commercial activity and may generate input tax credits, and may also cause the change-of-use rules to apply, thereby generating further credit.
  • However, the change-of-use rules could generate a tax liability if the election subsequently is revoked.
  • There is no need to submit the election form to CRA.
  • If a particular supply otherwise would be exempted both under ss. 6 and 8, the supplier must elect under both sections to ensure that the supply will not be exempt. However, a single election form may be used.
  • If other exemptions apply to the supply (e.g., under Sched. V. Pt. III, s. 7 or Sched. V. Pt. V.1, s. 1,) their exempt status will apply to effectively override the election.

11 March 2016 Excise and GST/HST News - No. 98

distinction between on-line supply of “service of instructing” v. supply of “intangible personal property.”

As discussed more generally in TIB B-090, CRA has developed an informal list of factors that are generally present when an on-line supply is of a “service of instructing” as per Sched. V, Pt. III, s. 8 versus a supply of “intangible personal property.”

Factors generally indicative of a service of instructing include:

  • the provision of systematic instruction, monitoring or supervision, and assessment of progress including feedback as well as assessment of competency upon completion (with the potential of failure),
  • a requirement for the participant to invest time (e.g., homework) outside of the activity,
  • a requirement for successful completion of verified prerequisites before taking a higher level course,
  • the occurrence of the activity over an extended period (e.g., weeks or months), and
  • the promotion of the activity being together with other activities in a calendar prepared by an educational institution and indicating that the activity is part of a broader program which may lead to a formal recognition of skills

Factors generally indicative of a supply of intangible personal property (e.g., admission to a workshop or seminar) include:

  • little individualized interaction with the participant;
  • mere attendance is sufficient for the participant to receive evidence of successful completion of the activity;
  • the activity’s purpose is principally to provide information to, or to facilitate the exchange of information amongst, participants, it is narrowly focused and discrete;
  • there is no formal prerequisites for attendance nor is it a prerequisite for participation in another activity; and
  • it occurs during a brief period such as a few hours or a few consecutive days.
Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Service online provision of instruction v. IPP 168
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Place of Amusement status of a location as a “place of amusement” for purposes of the public sector body exemption may be determined on an event by event basis 341
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part V.1 - Section 1 - Paragraph 1(e) “place of amusement” may be determined on an event by event basis 154

24 July 2013 Ruling Case No. 109069 [contract ballet instructor]

contract ballet instructor

In ruling that a self-employed ballet instructor who contracts out her services to local dance schools is making taxable supplies, CRA stated:

Self-employed sole proprietors…are generally not schools as contemplated under Part III of Schedule V, especially when they contractually provide their services to other learning institutes and not directly to the individual student. … In addition, an instructor who provides private lessons to one individual at a time with a customized program for each client is normally not regarded as a school.

3 July 2013 Interpretation Case No. 146888

language test

An internationally-recognized language test provided to the students of a program training them to teach English as a second language would not qualify as an exempt supply of a course as the "test provides a competency rating but it is not linked to a certificate, diploma, licence or similar document required by an individual to perform a trade or vocation."

23 January 2013 Interpretation Case No. 132321

dance lessons

In the course of a general discussion of the tax status of dance lessons, CRA stated:

For the purposes of this income test, income from non-vocational dance courses (e.g. courses taken for general interest, fitness or recreation) cannot be included in the amount of revenue derived from courses that develop or enhance a student's occupational skills, even if the dance school uses this source of added income as a means to defray the costs of providing courses which are vocational in nature.... For instruction in dance to meet the requirements of section 8 the instruction would generally be part of a full time program which provides an individual with the competence to practise or perform the vocation of a professional dancer or dance instructor. This instruction must further be attested to by a certificate, diploma, licence or similar document.

Articles

Jamie M. Wilks, "Educating and Training Vocational Schools and Other Educational Institutions How to Comply With Complex GST/HST Rules", Sales and Use Tax, Volume XII, No. 3, 2013, p. 638.

Single v. multiple supply (p. 638)

In Sterling Business Academy Inc. v. Canada, [fn 2: Sterling Business Academy Inc. v. Canada, [1998] G.S.T.C. 130 (T.C.C.) ("Sterling")] Sterling Business Academy Inc. ("SBA") charged a single price for enrollment in vocational courses that was not normally broken down between the tuition and the Materials (books and other supplies). The books were required reading and essential for studying the courses. The Tax Court found that the classroom teaching and Materials were all essential parts of the courses and generally purchased for a single consideration, and, therefore, concluded that SBA made bundled supplies of exempt educational services to students…. In Avenue Business Campuses Ltd. v. R., [fn 3: Avenue Business Campuses Ltd. v. R. [2001] G.S.T.C. 125 (T.C.C.) ("Avenue").] the Tax Court found that Avenue Business Campuses Ltd. ("ABC") made separate supplies of Materials and vocational courses (educational services)….

"Trade or vocation" (p. 639)

One of the elements of the exemption in section 8, Part III is that the courses lead to certificates, diplomas, etc. "that attest to the competence of individuals to practise or perform a trade or vocation." There are a number of cases considering whether the students receive instruction in an area that could qualify as "a trade or vocation." These cases have generally been liberal in their interpretation of what constitutes "a trade or vocation." [fn 5: See, for example, Global Infrobrokers Inc. v. R., [2005] G.S.T.C. 176 (T.C.C.), Forever Dance Inc. v. R., [2003] G.S.T.C. 152 (T.C.C.) ("Forever Dance") and Fleming School of Dance Ltd. v. R., [2007] G.S.T.C. 152 (T.C.C.) ("Fleming"), where entrepreneurship and dance courses were accepted as vocational training.]

Supplies may still be exempt if s. 8 election is made (p. 642)

In the case of charities, there appears to be a possible technical glitch with respect to the Taxable Election. Notwithstanding that the Taxable Election is made under section 6 or 8 to tax the courses or educational services, these supplies could still be considered exempt under section 1 of Part V.1 (the general exemption for supplies made by charities). As discussed above with respect to the general exemption for supplies made by public institutions, there is a specific carve-out for educational services falling within the scope (or potential scope) of section 6, 7 or 8 of Part III, Schedule V. The Taxable Election should be made prospectively. In Algonquin College of Applied Arts v. Canada, [fn 18: [1999] G.S.T.C. 71 (T.C.C.).] the Tax Court of Canada rejected post facto tax planning by a public college that sought to retroactively elect for courses to be taxable to access ITC claims.

Section 9

Administrative Policy

22 September 2011 Ruling Case No. 129475

A for-profit corporation (the "Corporation") provides a service for fees to the families of non-resident minor children in consideration for arranging for them to study at a Canadian school district, stay at a Canadian home and participate in eight recreational activities to be arranged by the Corporation. The students are recruited through non-resident commission agents, the Corporation contracts directly with and pays the Canadian host families and pays tuition to the school district for schooling the children pursuant to a memorandum of understanding with the school district. CRA finds that there is a single supply, and as "academic instruction is the dominant element of the supply...all the elemens included in the package have the same tax status as the dominant element," and "the Corporation is making a single supply of a service of instructing an individual in a course." Such supply is exempt under Sched. V, Part III, s. 9(a).

Section 11

Administrative Policy

GST/HST Memorandum 20-6 “Tutoring and Equivalent Services” December 2019

Post-secondary excluded

6. … The exemption under section 9 of Part III of Schedule V does not apply to services of tutoring or instructing individuals in courses offered at the post-secondary level (for example, college-level courses).

Recipient can be other than individual instructed

7. In order for the exemption in section 9 of Part III of Schedule V to apply, a supply of a service of tutoring or instructing must be rendered to an individual, but the recipient of the supply need not be that individual. … For example, the recipient of the supply may be the parent of the individual (the student) being tutored.

Requirement for direct connection between instruction and school credit, or curriculum-designed, course

9. Courses that are approved for credit by a school authority are generally courses offered at the secondary school level. Courses that follow a curriculum designated by a school authority refers to courses for which credits may not be given but where there is a curriculum designated by a school authority. These courses are generally offered at the elementary school level. For example, reading, writing, spelling and math instruction are generally part of a school curriculum for lower grades. Tutoring or instruction in effective reading, writing, spelling and math for the purpose of assisting children in meeting the requirements of their school curriculum will generally meet the requirements of paragraph 9(a) of Part III of Schedule V.

10. The service of tutoring or instructing an individual need not be limited to material contained in a course approved for credit by, or that follows a curriculum designated by, a school authority. The tutoring or instructing of an individual could also include general concepts dealing with the relevant subject matter, or material from lower grades, in order to assist the individual in understanding the material contained in a course approved for credit by, or that follows a curriculum designated by, a school authority. For example, where an individual receives a service of tutoring or instruction in general math concepts to assist with material in a course that follows the provincial math curriculum, that service of tutoring or instruction is exempt under paragraph 9(a) of Part III of Schedule V. In order for the exemption to apply, it must be evident that there is some direct connection between the supply of the service of tutoring or instructing in question and the course approved for credit by, or the curriculum designated by, a school authority.

[CRA then provided examples of general reading proficiency instruction qualifying, but general study skills course not qualifying]

Requirement for customized student interactions

12. Common characteristics of supplies that are not exempt under paragraph 9(a) of Part III of Schedule V include:

  • supplies where the tutor has negligible interaction with the student because the tutoring method is based on self-learning exercises or activities (for example, games) that strengthen a variety of cognitive skills
  • supplies where a program of tutoring provides a series of levels of attainment that every student must complete without consideration of the specific needs of the student in respect of any provincially recognized course offered by a school authority or a curriculum designated by a school authority

[CRA then provided an example of a private corporation (“Corporation A”) providing a course that involved children working through a progression of non-customized math workbooks at their own pace as not qualifying given that there was little assistance from the instructor and there was “no evidence of a relationship between the supply being made by Corporation A and a course approved for credit by, or that follows a curriculum designated by, a school authority.”]

Example of private driving school providing for-credit courses

Example 4

The Ministry of Education of the particular province has authorized school authorities to give 2 credits towards a secondary school certificate of graduation to students who take driving instruction from driving schools approved by the particular province.

Driving School A has been [so] approved … .

Driving School A provides driving instruction to individuals enrolled in a secondary school in the particular province and to individuals who are not enrolled in a secondary school in the particular province. The service of driving instruction provided to the individuals who are eligible to receive the 2 credits towards a certificate of graduation is exempt under paragraph 9(a) of Part III of Schedule V. The service of driving instruction provided to the individuals who are not enrolled in a secondary school in the particular province and who are not eligible to receive 2 credits towards a certificate of graduation is not exempt … .

[CRA provided a similar example (Example 3) respecting a High School authorizing jazz dance classes at a private Dance Academy.]

S. 9(c) - Example 7

[Example 7 involved a three-level ballet course, with only the third level recognized by a private school for a physical education credit, so that level 2 would qualify because it is a prerequisite to entering level 3, but level 1 would not qualify because it is merely a prerequisite to entering a prerequisite course (level 2).]

GST/HST Memorandum 20-7 “Second-language Instruction” December 2019

Limited to English/French as 2nd languages

3. … The exemption does not apply to other courses relating to English or French, such as courses intended to help students improve their command of English or French when it is their first language, nor does it apply to the supply of instruction in languages other than French or English.

Meaning of “program”

6. For the purposes of the exemption under section 11 of Part III of Schedule V, the term program is generally understood to refer to a particular series of courses that:

  • follow a logical sequence
  • fit together in a coherent way

7. The courses that form part of a program generally have a common subject matter or purpose, and the program itself should also have the purpose to develop students’ skills in English or French as a second language.

8. While a program generally consists of a series of courses, it is not necessary that an individual take all of the courses offered as part of that program for the exemption in section 11 of Part III of Schedule V to apply.

[In Example 2, this requirement was satisfied where a continuing education program of a public college provides course in four languages including French, and provides for three levels of French language instruction.]

Established test

22. To determine if a business of a person was established primarily to provide instruction in languages, the CRA will examine the facts surrounding that business to determine the purpose for which the business was established. The CRA will consider factors such as the business’s ongoing activities and operations, as well as its promotional materials (brochures, advertisements, course guides, etc.), which may provide evidence of the purpose for its establishment.

Operated test

23. … The CRA will consider a business to be operated primarily to provide instruction in languages if more than 50% of its total annual revenues are derived from fees/tuition for, or can be attributed to instruction in, language courses. …

26. … [I]f the portion of the business’s total annual revenues that is derived from language course fees/tuition or that can be attributed to instruction in these courses falls to 50% or less during the following fiscal year, the business would no longer be considered to be operated primarily to provide instruction in languages in the next fiscal year.

Words and Phrases
program

27 September 2018 Ruling 187397

a course prepping students to write an English proficiency test was not exempted

The Corporation (which is not a school authority) supplies services of instruction in a preparation course to prepare individuals to write the International English Language Testing System (IELTS) test.

In finding that the preparation courses were not exempted under Sched. V, Pt. III, s. 11, CRA stated:

IELTS preparation courses generally focus on preparing the individual to write the IELTS test. Generally, the preparation course does not qualify as a language course and the service of instruction is not instruction in a second-language. Therefore, the service of instructing individuals in the preparation course for the IELTS test is not a language course that forms part of a program of second-language instruction.

Section 12

Administrative Policy

GST/HST Memorandum 20-5 “School Cafeterias, University and Public College Meal Plans, and Food Service Providers” December 2019

“Primarily to students”

3. The phrase “primarily to students” means that where a school cafeteria supplies food and beverages (other than supplies of prescribed food or beverages or food or beverages supplied through a vending machine) to both students and non‑students, more than 50% of the supplies must be to students of the particular school in order for the exemption to apply. If the supply of food and beverages in the cafeteria is made primarily to students of the school, all supplies of food and beverages made in the cafeteria are exempt except for food or beverages that are prescribed, supplied through a vending machine or supplied for a private party, reception, meeting or similar private event.

“Cafeteria”

4. In elementary or secondary schools that do not have cafeterias, food and beverages may be provided to the students in classrooms, gymnasiums or other designated areas. For the purposes of section 12 of Part III of Schedule V, such spaces are considered to be cafeterias.

Example of “private” meeting - home and school meeting

Example 2

A secondary school’s parent association holds monthly meetings at the school to discuss various school-related topics. The company that supplies lunches to the students of the school also makes lunches available to those attending the parent association’s meetings, which are private meetings. Private meetings are excluded … .

Fast food chain could supply the school cafeteria lunches

5. At some elementary and secondary schools, a supplier, such as a fast‑food chain or a private company, supplies lunches directly to students within the school. The exemption under section 12 … applies to the supplies of such lunches, provided that the supplies are made primarily to students in a location determined to be a school cafeteria.

Words and Phrases
cafeteria

Section 14

Administrative Policy

GST/HST Memorandum 20-5 “School Cafeterias, University and Public College Meal Plans, and Food Service Providers” December 2019

Example of exempt supply to university

Example 4

University ABC offers a qualifying meal plan that provides students with lunch and dinner every day for a 3‑month semester in the university’s cafeteria. Under a contract with a third party, the university pays the third party to provide the food and beverages under the qualifying meal plan to the students of the university. The supply made to the university by the third party is exempt under section 14 of Part III of Schedule V.

Catering exemption

33. Section 14 of Part III of Schedule V includes supplies of catering services made to a school authority, university or public college under a contract to provide food or beverages. The Act does not define catering. However, the CRA considers a caterer to be a person who, at the direction of the customer, supplies prepared meals (including buffet style) or other food or beverages and delivers the order to the premises designated by the customer where the food may be arranged, heated or served by the supplier.

Section 13

Administrative Policy

GST/HST Memorandum 20-5 “School Cafeterias, University and Public College Meal Plans, and Food Service Providers” December 2019

Determination of 10-meals weekly test using average retail meal price

19. The calculation of whether the amount payable for a meal plan is enough for 10 meals a week is a question of fact and is based on the average retail price of a meal at the university’s or public college’s on‑campus cafeterias or restaurants.

20. The CRA considers the average retail price of a meal to mean the average retail price of a meal available to students at the on‑campus restaurants and cafeterias at which the meal plan may be used.

Topping-up option permitted

26. A topping-up option is often offered to students who purchase a qualifying meal plan. The CRA considers top‑ups or the addition of funds to a qualifying meal plan to be additional consideration for the same supply. As such, the tax status of meals under a qualifying meal plan is not impacted by top‑ups or the addition of funds to the qualifying meal plan.

Declining balance cards permitted

27. Some universities or public colleges administer their meal plans through the use of declining balance cards or similar means. A student may access one or more accounts through the card, such as an on‑campus meal plan account, an off‑campus meal plan account, or a mini‑mart or non‑food account used for laundry or bookstore purchases.

28. A meal provided under a meal plan, for which an amount is deducted from a declining balance card account is exempt under section 13 of Part III of Schedule V provided both of the following conditions are met:

  • the plan is a qualifying meal plan
  • the university or public college maintains a separate account for the qualifying meal plan on the declining balance card and advertises its terms and conditions separately

29. Cards issued by a university or public college to students for a qualifying meal plan are not considered to be gift cards ... .

Example of declining-balance card used for three accounts, one of them, exempt

Example 3

Students enrolled at a university pay an amount of $2,800 to the university. The students are issued a declining balance card through which 3 separate accounts can be accessed: an on‑campus qualifying meal plan account of $2,500, an off‑campus meal account of $150 and a mini‑mart account of $150. Each of these accounts is a separate plan.

The on‑campus meal plan account meets all of the requirements to be a qualifying meal plan. The meals are provided to students of the university at on‑campus eating establishments under a meal plan throughout the period of the plan, which is the 34‑week academic year. The university determined that the average retail price of a meal at the university is $7.25. Based on the average retail price per meal at the university, the single amount paid by a student is sufficient to provide the student with at least 10 meals each week for the period of the plan ($7.25 × 10 meals × 34 weeks = $2,465).

The university maintains separate accounts for the 3 separate plans and also advertises the terms and conditions of the 3 plans separately. The university is therefore not required to collect tax in respect of the meals provided under the qualifying meal plan. In addition, the university determines that the off‑campus meal plan and mini‑mart accounts are gift cards. As such, no tax is payable to the university at the time of issuance of the gift card.

Tax status determined at initial time

30. The tax status of meals under a qualifying meal plan is determined at the time the student initially enters into the agreement with the supplier. If unused funds are returned to the student at the end of the term or carried over for use in the future, the tax status of the meals previously provided under the qualifying meal plan will not be impacted.

Excise and GST/HST News – No. 96 under "University and public college meal plans" June 2015

assimilation of supply to agreement
Single consideration

Where a student enters into an agreement for meals to be provided under a meal plan and the agreement specifies that there is a single consideration, but the payment for that consideration may be made on an instalment basis, the CRA accepts that this type of arrangement meets the requirement of "single consideration".

Top-ups

In addition, the CRA considers "top-ups", or the addition of funds to a qualifying meal plan, to be additional consideration for the same supply for GST/HST purposes. As such, the tax status of meals provided under a qualifying meal plan is not impacted by "top-ups" or the addition of funds to the qualifying meal plan.

Refund of balance

The tax status of a supply for GST/HST purposes is to be determined at the time the student initially enters into the agreement with the supplier and will not be affected if, at the end of the plan period, unused funds are refunded or carried over for use in the future.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 133 assimilation of supply to agreement 123

Section 16

Administrative Policy

GST/HST Memorandum 20-2 “Public Colleges” December 2019

Example of recreational course exclusion

Example 7

Public College A offers a program consisting of 3 courses in model train building. These courses do not qualify as exempt supplies under any other section of Part III of Schedule V. The program is subject to review and approval by the board of the public college that was established by the college for the purposes of reviewing its course offerings.

Although there are more than 2 courses and the courses are subject to review by the board of the public college, the courses are not exempt under section 16 of Part III of Schedule V. The courses in this example are specifically excluded from the exemption in section 16 because they fall into the category of “sports, games, hobbies or other recreational pursuits that are designed to be taken primarily for recreational purposes”.

GST/HST Memorandum 20-3 “Universities” December 2019

Meaning of program

46. For the purposes of the exemption under section 16 of Part III of Schedule V, a program is understood to be a particular set of 2 or more courses that is:

  • offered by a university
  • identified as such by that university
  • reviewed and approved by a council, board or committee of that university

47. Workshops, conferences, retreats and seminars are generally not considered to be courses.

Exclusion for recreational pursuits

53. In determining whether a course is recreational in nature, it is important to consider the design of the course being offered rather than the intention of the individual taking the course. Other factors that may be examined include the course’s objectives and subject matter; how the course is marketed; the methods of teaching, evaluating and monitoring course participants; and the instructors’ qualifications.

54. Examples of recreational courses include non-credit courses in subjects such as dancing, skating, cooking or sailing.

55. While a course may not have been designed primarily for recreational purposes, it must still satisfy the other conditions set out in section 16 of Part III of Schedule V, as noted above. That is, in order for the supply of a service of instructing individuals in, or administering examinations in respect of, a course to be exempt, all of the following conditions must be met:

  • the course must be 1 of at least 2 courses that make up a program offered by a university
  • the program must be subject to review and approval by a council, board or committee of the university
  • the council, board or committee that reviews and approves the program must have been established by the university for the purpose of reviewing its course offerings

GST/HST Memorandum 20-1 "School Authorities - Elementary and Secondary Schools" December 2019

Meaning of program

54. A program is more than a miscellaneous collection of courses that relate to a given topic or area or that have been grouped under a particular heading. Rather, a program must consist of 2 or more courses that usually have a common subject matter or purpose and that fit together in a coherent way or in a logical sequence.

55. It is not necessary that all of the courses in a program be offered every year or semester, as long as the program includes 2 or more courses that are available on a periodic basis. It is also not necessary that a program be a recurring program. Provided it is made up of 2 or more courses, a program could, for example, be created to meet a need for a single year.

56. In addition, it is not necessary that an individual take all the courses in a program for the exemption to apply as the exempting provision is for the supply of instruction in a particular set of courses within a program offered by a school authority, not the planned course or program of studies of an individual.

57. The exemption under section 16 of Part III of Schedule V does not necessarily extend to all courses under a program, and each course must be separately evaluated to determine whether the supply of the course meets the conditions set out in this section. In some cases, courses in a program may have different tax statuses as the program may include a combination of qualifying courses and courses designed to be taken primarily for recreational purposes, the supply of which is specifically excluded under section 16.

Exclusion for recreation

58. For the purposes of the exemption under section 16 of Part III of Schedule V, an activity designed to be taken primarily for recreational purposes is understood to be an activity designed to be an enjoyable diversion or pastime. A recreational course may be informative but is mainly directed at satisfying the participant’s interest or desire for enjoyment or at enhancing the participant’s social activities. …

60. Examples of recreational courses include non-credit courses in subjects such as dancing, skating, cooking or sailing.

Words and Phrases
recreation program

Part IV

Section 1

Administrative Policy

GST/HST Memorandum 21-1 “Child Care Services“ December 2019

Examples of scope of child care

3. Child care services could include services provided by:

  • a babysitter
  • a day care centre
  • a pre-school or nursery school
  • a day camp
  • an educational institution for the purpose of providing before and after school care

Example of instructional or recreational aspect not detracting from “child care”

Example 6

A 7-year old boy participates in a 5 day summer dance camp for children aged 7 to 10 provided by a for-profit company. The camp runs from 8 am to 4 pm Monday to Friday. During the camp, the child is introduced to a number of different dance styles, has scheduled time for outdoor free-play and other activities each day, and is provided with a boxed lunch. The company’s staff supervises the campers and also provides the dance instruction.

The company is supplying child care services. Although the day camp involves dance instruction and other recreational activities, the primary purpose of the supply is to provide care and supervision to children 14 years of age and under for periods normally less than 24 hours per day. Therefore, the company is making an exempt supply under section 1 of Part IV of Schedule V.

Enrichment with sporting activities may not detract from “child care”

4. … With respect to any particular program, a degree of basic care and supervision is normally provided although the program may also involve activities and instruction which enrich the program. In determining whether a particular program is child care, some factors that would be considered are the age of the participating children, the qualifications of the individuals operating the program, the extent that progress is measured and goal-orientation is involved, and the time devoted to the program. For example, sports day camps for young children are generally not of an ongoing nature and it is generally recognized that there is a sufficient degree of child care even though the program is enriched by sporting activities with instruction. On the other hand, children, particularly those who are older, may participate in a sports program that is ongoing for a lengthy period of time, the instructors have qualifications or experience in a particular field, progress is regularly monitored and is goal-oriented, and sophisticated training methods are used. In this type of scenario, it is the CRA’s general view that the service provided is one of instruction as opposed to child care.

Example of exempt supervised visitation

Example 12

A court ordered that a parent should only be allowed access to their 2 children, aged 6 and 9, when a non-related person is present. A corporation provides a service where its employee supervises the children during their 4 hour visit with their parent. The employee’s role is to ensure the safety of the children during the visit. Where necessary, the employee can end the visit if it becomes uncomfortable or distressing to the children.

The corporation is making supplies of child care services. The primary purpose of the supply is to provide care and supervision to children 14 years of age or under for periods normally less than 24 hours per day. Therefore, the corporation is making exempt supplies under section 1 of Part IV of Schedule V.

Example of application of single-supply doctrine where single client (cf. various clients)

Example 13

An individual arrives at 6:45 pm to babysit children aged 7, 10, and 15 until midnight while their parents are away from the home.

Although one of the children is not 14 years of age or under, the individual is making a single supply of child care services, the primary purpose of which is to provide care and supervision to children 14 years of age or under for a period of less than 24 hours per day. Therefore, the babysitter is making an exempt supply under section 1 of Part IV of Schedule V.

Example 14

A for-profit company offers an after school program in which it provides child care services. The parents of a 7-year old, the parents of a 10-year old, and the parents of a 15-year old each enrol their child in the program.

The supply to the parents of each child is a separate supply. … The supply of child care services to the parents of the 15-year old is not exempt … .

Example of exempt double-supply of child care service

Example 22

A non-profit organization is a liaison between parents and in-home child care providers. The organization contracts with child care providers who provide child care services. The organization provides various administrative services to the child care providers in exchange for a commission. There is no employment or agency relationship between the organization and the child care providers.

A parent needing child care contacts the organization who finds an appropriate spot with a child care provider. The parent and the organization enter into a separate agreement for the supply of child care services which will be rendered by one of the in-home child care providers. The parents pay all child care services fees to the organization. From the fees paid to it, the organization keeps a 5% commission for the administrative services it provides and pays the remaining amount to the child care provider as consideration for the child care services that the organization acquires.

The supply of child care services from the in-home child care provider to the organization is exempt under section 1 of Part IV of Schedule V. The supply of child care services from the organization to the parents is also exempt under section 1 of Part IV of Schedule V. The supply of the administrative services from the organization to the child care providers provided for the 5% commission is taxable as no exempting provision applies.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply double supply of child care service 111

16 November 2017 Ruling 183644

summer day camp and after-school program qualified as “child care services"

The Corporation, a GST/HST registrant, provides summer day camps and after-school programs (the “children’s programs”) at the Corporation’s martial arts centre for children under 14. The summer camp hours are from 7:30 a.m. to 6:00 p.m. daily. The day is broken up by free time and fun, organized activities, with lunch and two snack times. Various camp options are provided.

Under the after-school program provided during the school year, the children, who are picked up from their schools in the Corporation’s buses, are provided with programming including arts and crafts, sports activities and homework assistance and other daily activities and free time before being picked up by their parents by 6:00 p.m.

After ruling that these two activities were exempt supplies, CRA stated:

The Corporation provides child care services under the [children’s programs]. Although the [children’s programs] are enriched by recreational and athletic activities … the primary purpose of the programs is to provide care and supervision to children 14 years of age and under. Therefore, the Corporation’s supplies made under the […] summer day camps and after-school programs are exempt from GST/HST.

Section 2

See Also

Caithkin Inc. v. The Queen, 2014 TCC 80, aff'd 2015 FCA 118

resupply of foster-care services

The appellant ("Caithkin") worked as an intermediary in the foster-care system, by finding suitable foster homes for various Children's Aid Societies and placing children there and providing related training and supervisory services. The Societies paid the appellant a per-diem rate, out of which the appellant paid the foster homes. Graham J found that Caithkin had not provided an exempt supply under s. 2 of Part IV of Sched. V, as it satisfied only two of the three requirements of s. 2:

  • Caithkin was making a "re-supply" to the Societies of "care, supervision and place of residence services" that it in turn "acquire[d] from the foster parents" (TCC para. 24).
  • Caithkin was providing care, supervision and place of residence supplies "to children," notwithstanding that the recipient of such supply was the Societies (TCC para. 33).
  • However, Caithkin was not providing the services in an establishment that it operated. Caithkin could be said to be providing the foster parents' homes to the children, but it could not reasonably be said to be operating them (TCC para. 37).

In upholding the finding below that Caithkin was making taxable supplies, Rennie JA dismissed the appellant's further argument that "establishment" in s. 2 is not restricted merely to physical locations and included a business organization, stating (at para. 19):

Given its ordinary meaning, the word "in," which informs the word "establishment", denotes a physical place ... . A bundle of services is not a physical place.

Words and Phrases
establishment
Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply resupply of foster-care services 63
Tax Topics - Excise Tax Act - Section 280 - Subsection 280(1) claiming ITCs and exempt supplies at same time 68

Administrative Policy

GST/HST Memorandum 21-2 “Residential Care Services” January 2019

meaning of disability, underprivileged, operated/single supply of residential care
  • “Underprivileged” generally “refers to an individual who, being unable to provide for their own or their dependants’ basic requirements (including food, shelter, clothing, fuel, utilities, household supplies, and special personal needs), is in need of assistance … .
  • “Disability” generally refers to “a long‑term impairment that restricts an individual in carrying out their activities of daily living” and does not extend to merely being elderly or frail person, or temporarily disabled or incapacitated (e.g., from surgery).
  • An establishment is “operated” by a supplier when it has “management and control of the establishment on a day‑to‑day basis” - as to which indicative factors would be, for instance, authority over making operational decisions in the establishment, control of day‑to‑day operations and physical presence.
  • Premises leased or licensed to the supplier under an agreement can qualify; and “an establishment staffed by employees of a supplier would generally also be considered to be an establishment operated by the supplier.”
  • A supply of a service of arranging for a third party to supply the indicated items would not qualify, e.g., a provincial government contracts with a corporation to provide care, supervision, and a place of residence to a young adult with a disability and that corporation, in turn, arranges for a third party to provide the services.
  • Individuals’ provision of foster care is not considered to be a commercial activity and, thus, is not subject to GST/HST.
  • Supplies of services such as assessment, placement, and monitoring services regarding residential foster care are not exempt under Sched. V, Pt. IV, s. 2.
  • A person operating a long‑term residential care facility for residents with a disability who provides care, supervision, a place of residence, social worker services, activities (for example, arts and crafts), and meals will be considered to be making a single supply of a service whose dominant elements are those described in Sched. V, Pt. IV, s. 2, i.e., the provision of care, supervision, and the place of residence.
  • Where tenants under leases of residential units in a residential complex may acquire optional services for additional fees, such as personal grooming, laundry, and cleaning services, there will be considered to be multiple supplies, i.e., of real property and e.g. laundry services.
Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply single supply of residential care 55
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Commercial Activity foster care not a business 21

21 November 2014 Ruling 150099a [residents of Saskatchewan care home requiring assistance with ADL qualify]

residents of Saskatchewan care home requiring assistance with ADL qualify

underline;">: Facts. All of the residents of a Saskatchewan personal care home require assistance with their activities of daily living. 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; administrative areas; and a fenced in courtyard. 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 Agreement between the operator (the "Corporation") and the resident stipulate the obligations of the Corporation, such as accommodation, meals, services and care provided and the obligations of the resident such as resident fees.

Ruling.

[T]he 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… .

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…to operate a personal care home… .

…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. …[E]ach of these residents has an impairment and because of that impairment is restricted in carrying out the activities of daily living. …[T]he impairment of each resident has lasted or is expected to last for at least 12 months.

31 July 2003 Ruling Case No. 37807

Supplies to the residents of a retirement home did not qualify under s. 2 of Part IV of Schedule V. "It is our view that needs and other conditions normally related to aging are not, in and of themselves, determinative factors that the individuals have a disability."

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 1 - Health Care Facility high care portion only of retirement home qualified 49

Section 3

Administrative Policy

GST/HST Memorandum 21-3 Respite Care Services January 2019

Lodging can be provided

2. An exempt supply of a service of providing care and supervision to an individual with limited physical or mental capacity for self-supervision and self-care due to an infirmity or disability can include lodging at an establishment of the supplier.

Meaning of limited physical or mental capacity for self-supervision and self-care due to an infirmity or disability

3. An individual with limited physical or mental capacity for self-supervision and self-care is an individual who, because of their physical or mental health care needs (for example, chronic diseases or functional disabilities), does not have the ability to independently take care of themselves. The reference to self-care must be read together with self-supervision since an individual’s capacity for self-care is influenced by their capacity for self-supervision. For example, the fact that an individual requires assistance with meal preparation and basic activities of daily living alone is not indicative of the individual having limited physical or mental capacity for self-supervision and self-care.

4. The term infirmity is generally understood to mean physical weakness, especially due to age or disease.

5. For purposes of the GST/HST, disability generally refers to a long-term impairment that restricts an individual in carrying out their activities of daily living. The individual’s disability may be congenital or the result of an injury, a neuromuscular disorder (such as muscular dystrophy or multiple sclerosis), or another condition (such as cerebral palsy, paraplegia, amputation, pulmonary disease, heart disease, arthritis, diabetes, or a back disorder).

Supply of a service rendered principally at an establishment of the supplier

6. A supply of a service of providing care and supervision to individuals with limited physical or mental capacity for self-supervision and self-care due to an infirmity or disability must be rendered principally at an establishment of the supplier … . [P]rincipally means primarily. The CRA has defined primarily to mean more than 50%.

7. … The following factors … may be used to determine whether a premises is an establishment of a supplier:

  • who has authority over making operational decisions in the establishment
  • who has control of day-to-day operations of the establishment
  • who has presence in the establishment
  • the types of activities and routine carried on in the establishment …

Example 3: attendance of such an individual at a day program of ABC

… In addition to rendering care and supervision at its establishment Monday to Friday from 9 am to 3 pm, ABC includes day trips twice weekly to places such as museums, bowling alleys, and movie theatres. Since the service of providing care and supervision is rendered principally at ABC’s establishment, the supply made by ABC is an exempt supply under section 3 … .

Example 7: application of single-supply doctrine to care at establishment

A person operates an establishment where individuals with limited physical or mental capacity for self-supervision and self-care due to a disability spend each day between 10 am and 4 pm. An agreement is entered into where the person agrees to provide, primarily at the establishment, care, supervision, lunch, art supplies, and transportation to and from different activities. Throughout the day, healthy snacks are offered to the individuals at no extra cost.

… The provision of care and supervision is the dominant element of the supply … [and] the transaction … constitutes a single supply of a service.

Words and Phrases
disability infirmity

Part V

2

Administrative Policy

P-064, 25 May 1993, "Treatment of Timeshares"

Part V.1

Section 1

Administrative Policy

7 December 2016 Ruling 158637

educational services not excluded

Training services provided by a registered charity to apprentices and supplied to employers or sponsors were exempted under Sched. V, Pt, V.1, s. 1.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 182 - Subsection 182(1) no GST/HST on a fee charged for the cancellation of an exempt supply agreement 156
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply contract cancellation fee not consideration for a supply 113
Tax Topics - Excise Tax Act - Section 232 - Subsection 232(1) choice between supplier refund or recipient rebate 100

Paragraph 1(c)

Administrative Policy

RC4082 "GST/HST Information for Charities," p. 14

Exemption for TPP leased together with real estate

If a charity makes an exempt supply by way of lease of real property to a person together with goods that the charity is supplying by way of lease to the person, the supply of those goods is also exempt. For example, if a charity makes an exempt supply of a meeting room by way of lease together with a supply of audio visual equipment by way of lease, the supply of that equipment is also exempt.

Paragraph 1(d)

Administrative Policy

15 August 2006 Ruling Case No. 56497

A charity which also sold goods thoroughout the year in a gift shop also engaged in a special fund-raising campaign in which those who made donations over a specified amount received a T-shirt which had been purchased by the charity and was not available for sale in its shop. In finding that the supplies of T-shirts by the charity were not exempt, with HST or GST applying on the consideration of $X for each supply of a T-shirt, CRA stated:

...where the charity provides the person making the contribution with property or a service of more than nominal value that served as an inducement to make the contribution, then for ETA purposes, the amount of the contribution is not regarded as a gift but as consideration for the supply of the property or service given in return by the charity. As well, the supply of the property or service made by the charity to the contributor is not a gift made for no consideration.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part V.1 - 3 272

Paragraph 1(e)

Administrative Policy

11 March 2016 Excise and GST/HST News - No. 98

“place of amusement” may be determined on an event by event basis

After noting that the definition of “place of amusement” includes premises at which various listed types of entertaining events are staged or held, as well as any place, structure or device whose purpose is to provide any type of amusement or recreation, CRA indicated that “regardless of the usual purpose of a place or its day-to-day use, a place may, under the first [branch] become a place of amusement at a particular moment in time due to an activity being staged or held there.” For example, a church that charges admissions to see its unique architecture would not thereby be a place of amusement under the first branch – but would become a place of amusement if a concert (other than a non-recurring fund-raiser) were held there for ticket purchasers.

A place would not be a place of amusement under the second branch if its "ordinary day-to-day purpose" was not to provide amusement or recreation.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part III - Section 8 distinction between on-line supply of “service of instructing” v. supply of “intangible personal property.” 261
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Service online provision of instruction v. IPP 168
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Place of Amusement status of a location as a “place of amusement” for purposes of the public sector body exemption may be determined on an event by event basis 341

7 September 2000 Ruling 11830-1B (Case 26962)

The provision of optional "working breakfasts" for a separate charge by a registered charity hosting a conference relating to its objects was exempt; whereas the provision by it at the same conference of an "international night dinner" for a separate charge was taxable. A supply of booth space to exhibitors at the same conference for modest charges also was exempt.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 138 101

Paragraph 1(f)

Cases

Camp Mini-Yo-We Inc. v. Canada, 2006 FCA 413

camp with evangelical purpose nonetheless provided recreational and athletic activities

The appellant, a charity, operated camps at four locations in Ontario which were aimed at children of various age groups. Most of the paid staff were clergy. About 90 minutes per day were devoted to worship and religious teaching, with the balance of the day involving usual summer camp activities. In finding that the fees charged by the appellant were taxable by virtue of coming within para. 1(f), Malone JA stated (at paras. 24-25):

The English version excludes from the exemption any service by a charity, which involves supervision or instruction in any recreational or athletic activity. The appellant’s programme is one that involves the supervision or instruction of religious, athletic and recreational activities and therefore, is caught by the English version of paragraph 1(f). The text does not require that the recreational and athletic activity constitute the major component.

Similarly, the services offered by the appellant fall squarely within the French version of the text: religious instruction in the context of recreational and athletic activities.

In indicating that Camp Kahquuah (summarized here on "place of amusement" grounds, which were not at issue in this case) was incorrectly decided, he stated (at para. 33) that “it should not matter that the taxpayer’s underlying purpose was charitable.”

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 138 no application where already a single supply 38

See Also

Cosmopolitan Music Society of Canada v. The Queen, [1995] GSTC 19 (TCC)

bands/choruses were recreational

The Society, which was a registered charity, had collected and remitted GST on its membership fees and the Minister argued that the GST was not chargeable since the membership fees were an exempt supply. Mogan TCJ described the Society as follows:

["The Society] is an adult recreational society in Edmonton providing an opportunity for adults of varying musical abilities to play in a band or sing in a chorus according to their abilities. The Society is registered as a not-for-profit organization under the corporate laws of the Province of Alberta, and it is a registered charity under the Income Tax Act. The Society has a chorus and five concert bands ranging from beginners to semi-professional in quality. There are approximately 300 members who pay a fee of $250 per season to belong with each session running from September to June. The activities of the Society are directed at giving its members a complete musical experience including the opportunity to perform once or twice a year at the Jubilee Auditorium in Edmonton."

Mogan TCJ held, among other things, that the predecessor provision to paragraph (f) (being paragraph (j) at the time) applied so that the membership dues were subject to GST. He stated:

"paragraph (j) describes 'a membership entitling a person to supervision in any recreational activity.' In my view, those words describe the … Society. The supervision is provided by the conductor of the band or choral group. The services of the conductor are provided by the Society. Participation in a band or the choral group is a recreational activity for each member of the Society. And membership entitles each member to the supervision of the conductor at the weekly practices and the less frequent performances of the band or choral group. Although the … Society is a registered charity, the right of its members to the supervision of a conductor in their recreational activity falls within paragraph 2(j) of Part VI Schedule V. It is the supply of a service which is specifically excluded from the opening words of section 2 Part VI. In my opinion, the membership is a taxable supply and is subject to the GST."

Paragraph 1(g)

Administrative Policy

RC4082 "GST/HST Information for Charities," p. 14

the value of the listed admissions or rights generally are not considered to be significant if they are less than 30% of the cost of the membership.

Paragraph 1(m)

Administrative Policy

RC4082 "GST/HST Information for Charities," p. 14

Effect of s. 211 election

Generally, when you make this election for real property, a supply of the property that would normally be exempt when you made it will now be treated as taxable.

Exception

Certain supplies of the real property will remain exempt even when the election is in effect, such as supplies of long-term residential rental accommodation.

If you are a GST/HST registrant, you will have to collect the GST/HST on all taxable supplies of the real property by way of lease, licence, or similar arrangement. Both registrants and non-registrants would have to collect the GST/HST on taxable supplies of the real property by way of sale unless the purchaser is required to remit the tax directly to the CRA.

Paragraph 1(p)

Administrative Policy

3 March 2017 Ruling 176139r

reflexology, massage and Reiki not excluded

The supply by a charity of pedicures, manicures and facial waxing through a professional esthetician was excluded, whereas the supply of spa services, namely reflexology, massage and Reiki was not excluded

3

Administrative Policy

15 August 2006 Ruling Case No. 56497

A charity which sold goods throughout the year in a gift shop also engaged in a special fund-raising campaign in which those who made donations over a specified amount received a T-shirt which had been purchased by the charity and was not available for sale in its shop. As the T-shirts had a value of over 10% of the contributions, it issued charitable receipts for only the amount of the contributions minus such T-shirt value (see ITTN, No. 26). In finding that the supplies of T-shirts by the charity to the donors were not exempt, with HST or GST applying on the consideration of $X for each supply of a T-shirt, CRA stated:

excluded from exemption under paragraph 3(a) of Part V.1 of Schedule V is a supply by way of sale of any personal property or service made by a charity in the course of a fund-raising activity where: • the charity makes supplies of such property or services in the course of that activity on a regular or continuous basis throughout the year (any period of twelve consecutive months) or a significant portion (30% or more) of the year; or • the agreement for the supply entitles the recipient to receive from the charity property or services on a regular or continuous basis throughout the year or a significant portion of the year. ....as XXXXX supplied the t-shirts to contributors on a weekly basis from XXXXX to early XXXXX, it sold the t-shirts on a regular and continuous basis throughout a significant portion of the year. As a result, XXXXX supplies of the t-shirts to persons making contributions of $XXXXX and $XXXXX were not exempt.

22 March 1999 Headquarters Letter HQR0001233

In order for seminars and workshops to qualify as being for "fund raising" it is not sufficient that one of their purposes be to raise money. Their "underlying purpose" must be to raise money to support the activities of the charity. It was not clear that this test was satisfied and, in any event, the seminars and workshops in question were to be held on a regular basis in the year.

10 May 1999 Interpretation HQR0001756

Where a charity sells admission tickets to professional performances that take place over a four day period, with the tickets being sold on a regular and continuous period for 11 months prior to the performances through a professional ticket agency, this 11-month time frame is long enough to exclude the charity from the fund-raising exemption found in s. 3 of Part V.1 of Sched. V:

Where admissions to a performance are sold in advance, we view the period over which the admissions are sold as the critical period in applying section 3 of Part V.1, rather than the period of the performances.

9 November 1998 Ruling Case No. HQR0001247

A charity which runs a childen's summer camp sells T-shirts at a price above their direct cost to campers during the six- to seven-week period that the property is being used as a summer camp. The T-shirts are sold to raise funds for the charity's activities, as well as for advertising purposes. In finding that these were exempt supplies, CRA stated:

As the sales of the T-shirts do not take place on a regular or continuous basis throughout a significant portion of the year, these sales qualify as being made in the course of an exempt fund-raising activity....

12 February 1998 Ruling HQR0001025

A charity which was sponsoring a tournament sold tickets on a sporadic basis for a period and sold the majority of the tickets once it started advertising. In finding that these were exempt supplies, CRA found that as the pre-advertising sales occurred on a sporadic basis, it was not necessary to comment on whether 19 weeks respresented a significant portion of the year (i.e., the sales after the launch of the advertising campaign did not occur in a significant portion of the year.) RC4082 "GST/HST Information for Charities,":

Examples of supplies that are exempt include: •greeting cards you sell only in the Christmas season; and •chocolate bars you sell in an eight‑week fund‑raising drive. Examples of supplies this exemption does not cover and that you will generally have to collect tax on if you are a GST/HST registrant, include: •goods you sell year‑round in a tuck shop; and •subscriptions to your charity's magazine.

Finance

10 July 1997

Section 3 Fund-Raising Activities Given that the small supplier thresholds for charities are increased significantly under the amendments to sections 148 and 148.1 (see commentary on clauses 9 and 10), many more charities than currently is the case will not be required to be registered to collect GST. As a result, fewer fund-raising activities will fall within the scope of the tax. Section 3 of new Part V.1 is provided for those charities that are large enough to remain registered for the tax. It exempts most supplies made by such charities in the course of fund-raising activities that are not otherwise exempt under section 2 of that Part. Such supplies are exempt under section 3 where they are not made on a regular or continuous basis throughout the year or a significant portion of the year and do not entitle recipients to receive property or services from the charity throughout the year or a significant portion of the year. Also, the existing exclusions from the volunteer exemption will apply to this new exemption provision. This exemption is intended to parallel the approach toward exemptions for fund-raising activities that is taken by many provinces for purposes of their sales taxes. For instance, where a charity operates a retail business year round or supplies admissions to performances held throughout its theatre season from May to October, the supplies will be taxable. However, if, for example, a charity had two fund-raising drives per year during which it sold chocolate bars, the supplies would be exempt. A similar exemption is introduced for public institutions (see commentary on clause 105).

Part VI

Section 1

Municipal Transit Service

Administrative Policy

11 July 2018 Ruling 187784

a government-assisted NPO providing door-to-door transportation services in a rural municipality was supplying municipal transit services

The Cooperative, which is a non-profit organization, was established are to carry on, on a co-operative basis, pre-booked rural public door-to-door service to residents of a municipality and, accordingly, provides pre-booked (at least the day before) daily transportation services to various clients, including clients going to work locally, for per-trip fees charged to the passengers or insurance companies. The Cooperative also offers a contract or charter service to residents where it provides a driver and vehicle for events, usually weddings, for four hours to drive guests home.

The Cooperative receives funding from the province, grants from the municipal department that provides public transit service for the Municipality, grants from the Municipality for providing community-based services in rural communities within the Municipality to subsidize regular vehicle operation and maintenance costs, and a grant for providing transportation services to seniors or persons with disabilities. Although the Cooperative has members and charges membership fees, the only benefit of membership is the right to participate in and vote at the annual general meeting.

Rulings

The Cooperative’s daily transportation services are municipal transit services under Sched. V, Pt. VI, s. 1, so that the supplies of these services are exempt under Sched. V, Pt. VI, s. 24(a). The Cooperative`s contract and charter services are not municipal transit services as so defined and their supply is not exempt.

CRA stated:

[T]he Cooperative was a transit authority … as it was a non-profit organization that received funding from the Province and the Municipality to support the supply of public passenger transportation services, and all or substantially all of the its supplies were supplies of public passenger transportation services provided within the Municipality and its environs.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 24 pre-ordered daily door-to-door service of government-assisted NPO was exempted 107

Para-municipal Organization

Administrative Policy

17 January 2012 Ruling Case No. 131923

A wholly-owned subsidiary (CCo) of a municipality in turn owns all the shares of ACo and BCo. CRA finds that ACo and BCo are not para-municipal organizations because they are not owned or controlled by the municipality. In particular, it is CCo and not the municipality which appoints their directors and approves their budgets.

Transit Authority

Section 2

See Also

Université Laval v. The Queen, 2016 TCC 17

agreement to licence sports complex in futre to City inhabitants was a real property supply

Tardif J found that two agreements under which Quebec City agreed to pay a $10M grant to Laval University for the expansion of its sports complex and the University agreed that the City populace would have access to the complex for 70% of its operating hours constituted a supply by the University in consideration for the $10M.

Respecting the characterization of the supply, Tardif J found (at para. 73) that “the agreements were clear that this is the case of a right of access to the installation, for the [complex] immovable” and (at para. 74) that “in this case, the service is the right to utilize an immovable to be constructed.” Accordingly, under subsection 136(1) “the service in question is deemed to be a taxable supply” which was of an immovable (para. 74). Accordingly, the supply was not exempted as a supply of personal property or a service under Sched. V, Pt VI, s. 2.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Consideration subsidy paid in consideration for future access rights 131
Tax Topics - Excise Tax Act - Section 136 - Subsection 136(1) s. 136 applied to agreement to offer, at a distant date, to license sports complex to unidentified individuals 175
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 25 agreement to licence complex in future was not exempted becasue complex primarily used in commercial activity 136

Section 6

Administrative Policy

6 December 2002 Memorandum RITS 35845

The provision of temporary accommodation at a boarding home for individuals requiring medical treatment off-site represented the single supply of a right to stay at the home which, to the extent that the individuals stayed for more that one month at the home, was exempted under s. 6(a) of Part I of Schedule V.

Section 10

See Also

City of Regina v. The Queen, docket 1991-4570 (TCC)

Grants received by the City of Regina were unconditional rather than being linked to work performed by the City in improving highway connector routes. Accordingly, that activity of the City was engaged in for no consideration and, therefore, represented an exempt supply by virtue of s. 10 of Part VI of Schedule V. As a result, that the City was not entitled to input tax credits on related costs.

Section 12

Paragraph 12(a)

Administrative Policy

3 February 2016 Interpretation 159181 Supplies made by […][a Municipality] to the […] First Nation

overlap with Indian Act exemption

After noting that band management activities (“BEE”) are those activities conducted by bands and band-empowered entities (as defined in B-039) (“BEEs”) “with regard to their normal administration, programs, services and activities that are designed and/or are delivered for the well-being or assistance of band members and are generally similar to those provided by other levels of government,” CRA stated:

…[S]ervices acquired on or off a reserve by the First Nation for …band management activities (“BMA”)] or for real property on a reserve are not subject to the GST/HST.

As a result, if the First Nation acquires the supply of instruction in swimming for its members who are instructed off a reserve, and the First Nation provides documentation stating that the service is being acquired for BMA, it would be relieved of the GST/HST. If a member of the First Nation acquires the supply, the tax relief would not apply.

However, … section 12 of Part VI of Schedule V to the ETA… exempts the supply made by a public sector body, such as a municipality, of a membership in, or services supplied as part of a program that is established and operated by the body and that consists of a series of supervised, instructional classes or activities in athletics, outdoor recreation, music, dance, arts, crafts or other recreational pursuits where the nature of the activities, or the level of skill required, is such that the program can reasonably be expected to be provided primarily to children 14 years of age or under.

Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Federal - Indian Act - Section 87 exemption re band management activities 153

GI-037 "Children's Camps Operated by Public Sector Bodies" December 2014

Overnight recreational, athletic or religious camps

Many PSBs operate camps that involve supervision or instruction in recreational or athletic activities. Where such a camp also involves overnight supervision, the supply of the camp by the PSB is generally taxable regardless of the age of the children attending. Overnight supervision includes supervision by volunteers, such as qualified program leaders.

Children who attend overnight camps may also receive other forms of instruction, such as religious instruction or computer training. In these cases, the supplies of these camps generally remain taxable provided the camps involve recreational or athletic activities.

Day camps

Where a camp operated by a PSB does not involve overnight supervision (that is, a day camp), the supply of the camp will be exempt if the camp is primarily for children 14 years of age or under.

19 July 2013 Ruling Case No. 147778 [definition of "program;" some children over 14]

definition of "program;" some children over 14

Ruling that the provision of sports programs by a private membership-based sports club (the Corporation) would be exempt under Sched. V, Part VI, s. 12(a) notwithstanding that in the case of one of the two programs, some of the children were 15. CRA also indicated that the Corporation "itself may define its own programs provided it is done on a reasonable basis" so that here the decision by the Corporation to treat "the pre-season off-site camps to be part of the same program as the on-site training" was to be respected.

Section 13

Administrative Policy

GI-037 "Children's Camps Operated by Public Sector Bodies" December 2014

Camps for underprivileged

Supplies by PSBs of camps involving supervision in recreational or athletic activities that are intended to be provided primarily to individuals who are underprivileged or who have a disability are exempt from the GST/HST. The supplies of these camps are exempt even if the camps include overnight supervision and regardless of the age of the individuals attending.

Section 17

Administrative Policy

28 February 2019 CBA Roundtable, Q.2

election to render memberships taxable is inferred if GST/HST is charged

All the conditions for exemption of an organization’s memberships under both ss. 17 and 18 of Sched. V, Pt. VI of Schedule VI are met.

  1. If both Forms GST23 and GST24, are not completed but the organization acts as though it had made the elections and charges GST/HST on its memberships, will the CRA accept the elections as having been made?
  2. If the organization completes only one of the GST23 and the GST24 forms, will CRA accept both elections as having been made, so that the organization should charge GST/HST and can claim ITCs?
  3. Both the GST23 and the GST24 purport to allow the election to be revoked, without apparent legislative basis. Can a revocation be legally valid?

CRA responded:

(a) … In general, the CRA would accept that an election was made under section 17 or 18 even though the organization did not complete the required form, if the organization has always acted as though it had made the election in question.

(b) … If a particular supply meets the requirements of both sections 17 and 18, the supplier must make an election under both sections to ensure that the supply will not be exempt under either of these sections.

… [However] sections 17 and 18 are generally mutually exclusive and would not apply to the same supply of a membership. The benefits typically conferred by a professional membership that is exempt under section 18, such as the right to use a certain title or the right to practice certain otherwise restricted acts, would not be allowable benefits under section 17.

(c) … It would be unwieldy to require a supplier to complete a separate form in respect of every supply. Therefore, the Minister has approved a form that will allow a supplier to make an election indefinitely, until the supplier chooses that it no longer wants the election to apply … [by] complet[ing] Section D of the relevant form. … On completion of Section D, the supplier is no longer considered to have made an election in respect of any supplies of memberships as of the effective date of the revocation.

As such, the CRA considers a revocation to be legally valid if Section D on Form GST23 or Form GST24 is duly completed, signed by a person authorized to sign on behalf of the organization, and kept in the organization’s files for six years from the end of the year to which the election relates.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 18 election has global effect until revoked 100

26 April 2013 Ruling 34568 [memberships taxable as members could receive funding]

memberships taxable as members could receive funding

On heavily redacted facts, CRA ruled that supplies of membership in an unregistered federal non-profit organization (a non-share corporation) for a fee to the (voting individual) members were not exempt under s. 17 (or s. 189 of the Act), given that the members were able to receive funding from the corporation and only members were eligible to apply for funding. CRA stated:

When a member receives funding…this constitutes a direct benefit for that member. …[T]he fact that a benefit is available to all members does not necessarily signify that the benefit is "indirect." If, by reason of membership, a member receives a direct benefit (other than any listed in paragraphs (b) to (f)), the supply of the membership is taxable.

15 June 2011 Headquarters Letter Case No. 126726

Before finding that supplies of memberships in a non-share not-for -profit corporation did not qualify for exemption in light of the benefits received by members (in light of facts which were heavily redacted), CRA stated (respecting s. 17(a) of Part VI of Sched. V):

Benefits that are meant to accrue only to members by reason of their membership are generally direct benefits. Generally, activities carried out by a non-profit organization on behalf of a broad public sector so that both members and non-members alike benefit in a roundabout or secondary manner will be considered to be an indirect benefit. On the other hand, where the activities are directly aimed at benefiting only the members of a particular organization, then the activities will generally be considered a direct benefit.

Paragraph 17(e)

Administrative Policy

2 June 2015 Ruling 169081

“insignificant” is less than 30%

The “Organization,” which is a "municipality" under para. (b) of “municipality” in s. 123(1) and, therefore, a "public sector body," charges membership fees to each member. Before finding that, as the members receive significant direct benefits by reason of their membership which exceed the allowable benefits listed in ss. 17(a) to (f), so that the Organization's supplies of memberships are not exempted, CRA referenced s. 17(e) as exempting “the right to receive a discount for property or services sold by the organization when the total value of all the discounts is insignificant (less than 30%) in relation to the membership fee,” and stated:

For example, a $100 membership fee provides members with a $5 discount for each of 10 admissions to the theatre ($50 discount). This membership would be taxable since the total value of the discounts is significant (30% or more) in relation to the membership fee whether or not the discounts are used.

CRA also stated:

A "benefit" is the right to any property or service of value regardless of the extent to which the right is actually exercised by individual members. All possible benefits accruing to members must be taken into consideration in determining the tax status of a membership.

Words and Phrases
significant

Section 18

Administrative Policy

8 August 2019 Internal T.I. 2019-0804641I7 - Professional Dues 8(1)(i)(i)

recognition by statute can include recognition by regulation

Sched V, Pt. VI, s. 18 has similar wording to ITA s. 8(1)(i)(i), which provides for the deductibility of “annual professional membership dues the payment of which was necessary to maintain a professional status recognized by statute.” After the Excise and GST/HST Rulings Directorate queried the view in 2014-0530691E5 that:

a professional status would generally have to be acknowledged in the statute itself to satisfy the “recognized by statute” condition in subparagraph 8(1)(i)(i) … .

the Income Tax Rulings Directorate changed course and concluded:

[F]or purposes of the meaning of the phrase “professional status recognized by statute” … applying a textual, contextual and purposive analysis, a “professional status” can be “recognized by a statute” for purposes of subparagraph 8(1)(i)(i) … even if it is only recognized in the supporting regulations of an act.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(i) - Subparagraph 8(1)(i)(i) “recognized by statute” can include recognition in a statute’s supporting regulations (but not in by-laws) 258

28 February 2019 CBA Roundtable, Q.2

election has global effect until revoked

Regarding the elections under Sched. V, Pt. VI, ss. 18 and 17 for those exemptions not to apply, CRA stated:

In general, the CRA would accept that an election was made under section 17 or 18 even though the organization did not complete the required form, if the organization has always acted as though it had made the election in question.

Unsurprisingly, CRA stated that a fresh election is not required for each membership supply, and explained that the signed election is regarded as having a continuing effect respecting all future supplies until the election is revoked by completing Part D of the form.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 17 election to render memberships taxable is inferred if GST/HST is charged 397

18 October 2017 Ruling 173963r

members of the profession did not require membership in the Association to provide their services

The Association is a non-profit organization that was founded to advance and promote Profession A. Members pay dues and have voting and other rights. The by-laws of the Society reference the concept of a District, meaning a provincial or territorial association of Profession A recognized by the Society as a class of membership. A portion of the Association’s total revenues was remitted to the Society by the Association.

In finding that the supply of memberships by the Association was not exempt under Sched. V, Pt VI, s. 18, CRA noted that it had not been provided, and was unable to find, any evidence that membership in the Association is required to maintain a professional status recognized by statute, noting that a “person may offer or provide services similar to those offered or provided by [Profession A in Province X] even though they are not a member of the Association.”

The Association, in turn, paid fees to the Society. Although these fees appeared to be stated in the Society by-laws to be paid “on behalf of” Society members, CRA found that the fees did not represent Society membership fees that the Association was collecting as agent for the Society given that “the bylaws of the [Society] provide no liability to the individual members to pay membership dues to [Society].”

Locations of other summaries Wordcount
Tax Topics - General Concepts - Agency a provincial professional association did not collect fees from members as agent for the national professional association 239

Section 20

See Also

Ontario College of Teachers v. The Queen, 2014 TCC 130

professional accreditation is more than the mere provision of information and certificates

The appellant ("the College") was the statutorily designated professional governing body of teachers in Ontario. The Minister denied input tax credits that the College claimed in relation to its teacher accreditation process, on the grounds that the supply of teaching credentials was exempt pursuant to s. 20(d) of Part VI of Schedule V which, at the relevant time, read:

[A] supply of a service of providing information in respect of, or any certificate or other document evidencing, the vital statistics, residency, citizenship or right to vote of any person, the registration of any person for any service provided by the government or any other status of any person.

In granting the College's appeal, Jorré J noted (at para. 52) that the substance of what the College was charging for was evaluating and determining a candidate's eligibility as a teacher, and further stated (at paras. 56-57):

What is being done is evaluating a candidacy, and of course there is going to be some sort of record of that, but that is not what the paragraph in issue exempts.

On the face of the provision, what the paragraph would cover is someone asking, for example, for a copy of their birth certificate and paying a fee for it.

The words "in respect of", although broad, were insufficient to expand the kind of supply covered by the wording of s. 20(d) (paras. 62-64).

Administrative Policy

GST/HST Memorandum 18-2 “Provincial Governments” February 2020

Examples of exempt provincial government supplies

17. …[S] ection 20 of Part VI of Schedule V lists a number of supplies of an administrative or regulatory nature that are exempt supplies when made by, among others, a government or a body established by a government. Such supplies by a provincial or territorial government would include the supply of a driver’s licence or a birth certificate or the registration of a mortgage in a property registration system.

23 April 2019 GST/HST Ruling 186334 - S AND INTERPRETATIONS - Annual licensing fees and public service bodies’ rebate eligibility

law society was an “other body established by a government”

An incorporated non-profit organization (the “Organization”) which regulated a profession in a province constituted an “other body established by a government”. CRA stated:

The [Organization] was established through [Act X] and is therefore considered to be an “other body established by government” under Category 1 [of P-247] for the purposes of section 20 of Part VI of Schedule V.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 20 - Paragraph 20(c) consideration for licensing included expired licence fees 43
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 20 - Paragraph 20(b) - Subparagraph 20(b)(i) exempt processing and registration fees of professional society 62
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Debt Security NSF cheque charge exempt as for debt security 82
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part III - Section 6 jurisprudence exam fee exempt, but not charge for processing exam administered by another body 144

20 October 2014 Interpretation 155555

highway overload permits

The issuance by a municipality of overweight load permits respecting vehicles that exceeded a prescribed weight (whose movement on roadways otherwise would be prohibited under the Highway Traffic Act (Saskatchewan)) was an exempt supply under s. 20(c) of Part VI of Schedule V.

31 July 2012 Interpretation Case No. 103548

A developer who applies for a development permit or subdivision approval may be required by the municipality to pay a levy, or construct or pay for the construction of municipal improvements (which potentially may be in excess of those required to support the particular contemplated development), with such improvements becoming municipal property. In the excess capacity situation, fees collected from subsequent developers generally are used by the municipaliy to reimburse this developer's costs. Such a levy would generally be considered to be for an exempt supply under Sched. V, Part VI, s. 20(c) by the municipality of a permit or similar right. The amount payable by a developer to the municipality as its proportionate share of the improvement costs also would generally be regarded as consideration for an exempt supply under s. 20(c).

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 153 - Subsection 153(1) development levy 161

Paragraph 20(b)

Subparagraph 20(b)(i)

Administrative Policy

23 April 2019 GST/HST Ruling 186334 - S AND INTERPRETATIONS - Annual licensing fees and public service bodies’ rebate eligibility

exempt processing and registration fees of professional society

An incorporated non-profit organization (the “Organization”), perhaps a provincial law society, which regulated a profession in a province, made exempt supplies under s. 20(b)(i) respecting the following items, as being consideration for a supply of “a service of filing … a document … in accordance with legislative requirements”:

  • initial registration fee,
  • temporary/restricted licensing fee,
  • change of licence class fee, and
  • reinstatement fee
Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 20 law society was an “other body established by a government” 57
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 20 - Paragraph 20(c) consideration for licensing included expired licence fees 43
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Debt Security NSF cheque charge exempt as for debt security 82
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part III - Section 6 jurisprudence exam fee exempt, but not charge for processing exam administered by another body 144

Paragraph 20(c)

Administrative Policy

23 April 2019 GST/HST Ruling 186334 - S AND INTERPRETATIONS - Annual licensing fees and public service bodies’ rebate eligibility

consideration for licensing included expired licence fees

An incorporated non-profit organization (the “Organization”), perhaps a provincial law society, which regulated a profession in a province, made exempt supplies under s. 20(c) respecting the following items:

  • the annual licensing fee
  • expired licence fee (being “additional consideration for supply of a licence”)
Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 20 law society was an “other body established by a government” 57
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 20 - Paragraph 20(b) - Subparagraph 20(b)(i) exempt processing and registration fees of professional society 62
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Debt Security NSF cheque charge exempt as for debt security 82
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part III - Section 6 jurisprudence exam fee exempt, but not charge for processing exam administered by another body 144

27 May 2016 Interpretation 130865—Permit Fees and Municipal Development Charges

fees of land developer to a regional municipality to obtain preliminary permit-related approvals, not exempt

The final building or service permit to a land developer is issued by the local municipality, but in many situations the permit cannot be issued without the approval of the land development agreement by the regional municipality. Are the supplies, which are made by the regional municipality, elements of a single supply of a permit exempted under Sch V, Pt VI, s. 20(c)?

In rejecting a single supply submission, CRA stated:

[T]he provision of property and/or services by two or more suppliers generally indicates that multiple supplies are being made, even if the various supplies are provided together. …

[A] requirement that the fees related to the review and approval of a land development agreement be paid in full to the regional municipality prior to the issuance of a permit by a local municipality is not evidence, in and of itself, that the services provided by the regional municipality in connection with those fees are elements of a single supply. Further, many of the fees identified are payment for a separate supply, e.g., approval of a plan amendment or a condominium conversion.

… The review by the regional municipality of the land development agreement is a separate activity from the issuance of a permit by a local municipality.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 21 regional municipality land-development approvals not exempted 166
Tax Topics - Excise Tax Act - Section 189.1 regional municipal land development approvals not exempted 123

Section 21

Cases

Canada v. 407 ETR Concession Company Limited, 2017 FCA 220

Ontario government charges to the 407 Highway operator for OPP patrol services were for an HST-exempt supply of a “municipal service”

The appellant, which was a private company operating an Ontario toll highway (the “407 ETR”), paid fees to the Ontario government for the provision to it of OPP policing services, comprising both enforcement of the provisions of the Highway Traffic Act and the same services that municipal police forces are required to provide under subsection 4(2) of the Police Services Act, namely, crime prevention, law enforcement, assistance to victims of crime, maintenance of public order and emergency response. In affirming the finding below that such services were exempted under Sched. V, Pt. VI, s. 21, Webb JA stated (at paras 14, 16):

[T]he plain meaning of these words [‘municipal service”] would suggest that whether a particular service is a municipal service would be determined based on a finding of what type of services would normally be provided by a municipality. The word municipal is simply used as an adjective to delineate the type of service that will qualify as an exempt supply.

The Crown … submitted that “municipal service” is only intended to apply to a service provided by a federal or provincial government when that government is acting as a municipal authority. However, in my view, this would require additional language to be added to section 21. Section 21 … does not provide that a “municipal service” will only be a service provided by a government acting as a municipal authority.

Webb JA then stated (at paras 23, 24 and 25):

[The Crown’s] argument is essentially that a municipal service can only be a service that a municipality (and not the federal or provincial government) is obligated to provide. …

Applying this interpretation to the national park example would mean that for any residents of a national park, for whom no municipality is obligated to provide services, the services provided by the federal government would not be “municipal services” for the purpose of section 21, even though such services would normally be provided by a municipality. …

In my view, this result is not the result that Parliament intended and does not take into account that section 21 applies to services provided by a government or a municipality. …

Words and Phrases
municipal service

Brandon (City) v. Canada, 2010 FCA 244

s. 21 inapplicable because private company was not contractually obligated to provide its wastewater to the City plant

The City of Brandon (the City), the Province of Manitoba and Maple Leaf Meats Inc. (Maple Leaf) agreed that the latter would establish a hog processing plant (the Plant) within the City. The Plant would produce wastewater in quantities that could not be accommodated by the City’s existing wastewater treatment facilities. As a result, it was agreed that the City would construct a new wastewater treatment facility, at no cost to Maple Leaf, to process the wastewater produced by the Plant. The operating costs (plus a fee for overhead and administration) would initially be borne by the City, to be charged back to Maple Leaf on a cost recovery basis. If Maple Leaf sold the Plant before it went into operation, it agreed to repay the City the entire cost of construction of the Facility. At any time during the term of the Agreement, Maple Leaf could elect to take over the operation of the Facility provided it could reasonably substantiate that it could operate the facility more cheaply or efficiently than the City while maintaining the same standards.

Before going on to find that the operation of the wastewater facility by the City to treat the wastewater from the Plant was exempted under s. 22, Pelletier JA found that its operation was not exempted under s. 21 given that (para. 32) “Nothing in the Agreement required Maple Leaf to provide the City with any amount of effluent at any time” and:

As a practical matter, it would have made no sense for Maple Leaf not to use those services but the fact remains that the City did not choose to include in its contract with Maple Leaf a clause which required it to make use of the Facility.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 22 s. 22 extended to operation of a wastewater facility by City for private company 241
Tax Topics - Statutory Interpretation - French and English Version French version brought out the secondary meaning of “maintain” in ungrammatical English version 221

See Also

407 ETR Concession Company Limited v. The Queen, 2016 TCC 213, aff'd 2017 FCA 220

Ontario government charges to the 407 Highway operator for OPP patrol services were for a “municipal service”

The appellant, which was a private company operating an Ontario toll highway (the “407 ETR”), paid fees to the Ontario government for the provision to it of OPP policing services, comprising both enforcement of the provisions of the Highway Traffic Act and the same services that municipal police forces are required to provide under subsection 4(2) of the Police Services Act, namely, crime prevention, law enforcement, assistance to victims of crime, maintenance of public order and emergency response. Before finding that the services were exempt under section 21 of Part VI of Schedule V, D’Arcy J. noted (at paras. 70, 72):

[I]nterpreting “a municipal service”, as that phrase is used in section 21, to mean a service that is in the nature of service as typically provided by municipalities satisfies Parliament’s intention that the service may be supplied by either a government or a municipality.

…[S]ection 21…is intended to exempt supplies of services that are made by a government authority (federal, provincial or municipal) that the owner or occupant of land has no option but to receive and that would normally be financed by taxes charged by the provider of the services (i.e., the federal, provincial or municipal government). The section is intended to cover such services regardless of whether they are provided by a municipality, the federal government or a province.

As “policing services are one of the core services provided by a municipality” (para. 74) and “the policing services provided by the OPP to the Appellant were of the same nature as services typically provided by municipalities” (para. 78), the exemption applied.

Words and Phrases
municipal service

Administrative Policy

27 May 2016 Interpretation 130865—Permit Fees and Municipal Development Charges

regional municipality land-development approvals not exempted

The final building or service permit to a land developer is issued by the local municipality, but in many situations the permit cannot be issued without the approval of the land development agreement by the regional municipality. In finding that the supplies made by the regional municipality are not exempted under Pt VI, s. 21, CRA stated:

A key condition of section 21… is that the service is "one which the owner or occupant has no option but to receive". We interpret this condition as meaning (in part) standard municipal services that are provided collectively to all owners or occupants of real property… .

… [T]he requirements of land owners to comply with laws and regulations pertaining to land development, and the responsibilities of municipalities to review, examine and inspect land development agreements are not indicative of municipalities making a supply of a municipal service for which owners or occupants of real property have no option but to receive for purposes of section 21 of Part VI of Schedule V.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 20 - Paragraph 20(c) fees of land developer to a regional municipality to obtain preliminary permit-related approvals, not exempt 209
Tax Topics - Excise Tax Act - Section 189.1 regional municipal land development approvals not exempted 123

Section 21.1

Administrative Policy

6 October 2011 Ruling Case No. 122497

In order to ensure fire safety service to municipal residents, a municipality pays a contractor to repair a privately owned bridge. The municipality seeks reimbursement from the property owners for this cost through a local improvement charge. The supply of such repair services by the municipality to the property owners is exempt under s. 21 or 21.1.

Section 22

Cases

Brandon (City) v. Canada, 2010 FCA 244

s. 22 extended to operation of a wastewater facility by City for private company

The City of Brandon (the City), the Province of Manitoba and Maple Leaf Meats Inc. (Maple Leaf) agreed that the latter would establish a hog processing plant (the Plant) within the City. The Plant would produce wastewater in quantities that could not be accommodated by the City’s existing wastewater treatment facilities. As a result, it was agreed that the City would construct a new wastewater treatment facility, at no cost to Maple Leaf, to process the wastewater produced by the Plant. The operating costs (plus a fee for overhead and administration) would initially be borne by the City, to be charged back to Maple Leaf on a cost recovery basis.

Pelletier JA first noted (at para. 39) that “no matter how one reads the sentence [in s. 22 of the English version], it is ungrammatical and ambiguous,” but then stated (at paras. 41, 44-45), before finding that the supply made by the City was exempted under s. 22:

The primary sense of the verb [“entrenir”] is sufficiently broad to include and, in my view, does include, the operation of a thing or a system. …

As for the meaning of the verbs “to maintain” and “entretenir”, there is an overlap between the two versions, with the French verb emphasizing a meaning which is present in English, though not as the primary meaning. … As a result, I would conclude … that section 22 is broad enough to include the “operation” of the wastewater disposal facility by the City.

Words and Phrases
maintain
Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 21 s. 21 inapplicable because private company was not contractually obligated to provide its wastewater to the City plant 287
Tax Topics - Statutory Interpretation - French and English Version French version brought out the secondary meaning of “maintain” in ungrammatical English version 221

Administrative Policy

29 June 2018 Ruling 125593r

treatment of other municipality’s excess sewage was not exempted

Two registered municipalities (the City and XYZ) agreed that each will charge the other for the receipt and treatment of the other municipality’s wastewater at their respective treatment facilities. CRA first noted that City of Brandon had found that the wording of s. 22 “is broad enough to include the ‘operation’ of a water distribution, sewerage or drainage system.” However, before going on to rule that such supplies made by the City were not exempted under s. 22, CRA stated:

[T]he agreement between the City and [XYZ] is for the acceptance, treatment and disposal of [XYZ’s] wastewater at the City’s municipal wastewater treatment facilities. The City is not supplying to [XYZ] a service of operating a wastewater treatment facility.

Section 24

See Also

Calgary (City) v. Canada, [2012] 1 S.C.R. 689, 2012 SCC 20

The City of Calgary unsuccessfully submitted that its activities of acquiring public transit asset and making them available for use in its transit system constituted a separate taxable supply made to the Province of Alberta (which provided funding therefor) rather than being part of its making of exempt municipal transit services to the public. Furthermore, even if the Province could be regarded as being a second recipient (in addition to the Calgary public) of the municipal transit services made by the City, this did not detract from this supply being included as an exempt supply in Schedule V, Part VI, s. 24, as this provision "does not indicate that the supply must be made exclusively to members of the public" (para. 65).

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Business "undertaking" included constructing transit system 66
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Recipient mere provision of earmarked funding did not render the Province a recipient 256
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply alleged separate supply: a preparatory component 277

Administrative Policy

GST/HST Memorandum 28.3 Passenger Transportation Services July 2019

Examples of transit authority not satisfying the substantially all test (para. 35)

Example 5

A transit authority sells transit passes to another transit authority for the purpose of resale. Each transit pass exclusively entitles an individual to use municipal transit services provided by the first transit authority. The supplies made by the first transit authority to the second transit authority would not be exempt under section 24, as section 24 does not apply to supplies made to transit authorities. However, the supplies would be exempt under paragraph 24.1(a), as all of the conditions for the exemption to apply have been satisfied.

Example 6

A local transit authority regularly provides municipal transit services. It also provides charter services to schools for special field trips, and transportation services to tour companies for sightseeing tours of the city. The supply of a charter service or a service that is part of a tour is specifically excluded from the definition of municipal transit service. Therefore, the supply to schools and tour companies of the services described above would not be exempt under section 24 even though the supply is made by a transit authority.

11 July 2018 Ruling 187784

pre-ordered daily door-to-door service of government-assisted NPO was exempted

A non-profit organization which provided daily pre-booked door-to-door transportation services to members of the rural public within a municipality for fares was ruled to be providing a GST/HST exempt municipal transit services under Sched. V, Pt. VI, s. 1 given inter alia that it received funding from the Province and the Municipality to support the supply of public passenger transportation services, and all or substantially all of the its supplies were supplies of “public passenger transportation services” (not a defined term) provided within the Municipality and its environs. However, its contract or charter service where it provided a driver and vehicle for events, usually weddings, was taxable.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 1 - Municipal Transit Service a government-assisted NPO providing door-to-door transportation services in a rural municipality was supplying municipal transit services 279

Section 25

See Also

Université Laval v. The Queen, 2016 TCC 17

agreement to licence complex in future was not exempted becasue complex primarily used in commercial activity

Tardif J found that two agreements under which Quebec City agreed to pay a $10M grant to Laval University for the expansion of its sports complex and the University agreed that the City populace would have access to the complex for 70% of its operating hours constituted a supply by the University in consideration for the $10M.

He then found that ETA s. 136(1) deemed this to be a supply of immovable property (which therefore was a taxable supply) rather than a potentially exempt supply of movable property or a service. Accordingly, the supply was not exempted as a supply of personal property or a service under Sched. V, Pt VI, s. 2. Furthermore, the exemption in Sched. V, Pt VI, s. 25 did not apply as it was acknowledged that over 50% of the complex was used in commercial activity.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Consideration subsidy paid in consideration for future access rights 131
Tax Topics - Excise Tax Act - Section 136 - Subsection 136(1) s. 136 applied to agreement to offer, at a distant date, to license sports complex to unidentified individuals 175
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 2 agreement to licence sports complex in futre to City inhabitants was a real property supply 149

Municipality of Lorraineville v. The Queen, [2004] GSTC 36, 2003 TCC 895 (Informal Procedure)

The sale of serviced lots by a municipality, with a separate (as to 94% of the total consideration) municipal infrastructure charge was found to entail two supplies (the sale of land, and the provision of infrastructure services) given that land could have been sold independently of the installation or repair of sewer and water systems and given that the breakdown between the two charges appeared clearly in the sale contract.