Section 259

The residents in a nursing home

have heavy care needs and require a two-person transfer, are totally incontinent and are either cognitively impaired or have dementia. In addition, many residents require restorative aid and/or complex wound care which is provided by specialized nursing staff. The nursing staff spends several hours each day assisting each resident with the activities of daily living (i.e., transfer, toileting, feeding, and mobility) whether rendering the services themselves or supervising other staff members in the delivery of these services.

Before finding that the charitable operator was not making a facility supply, CRA stated:

The medically necessary process of health care for a resident at the Facility is such that the nursing staff and other health care professionals are responsible for the delivery of the key services, actions, operations and events that reflect the objectives outlined in the Letters Patent for the Facility and not the Attending Physician. The Attending Physician may be required under the Attending Physician's Agreement and the Long-Term Care Homes Act and Long-term Care Homes Program Manual to perform certain duties and meet certain responsibilities (i.e., visit with each resident every week, provide an on-call service, review the results from all diagnostic tests ordered, counter-sign all orders, perform semi annual reviews of the care plan and other services). However, the Facility, or part of the Facility was not established for the medical or surgical treatment of an individual. The underlying purpose for residents and/or their legal guardians to seek residence at the Facility is to receive 24-hour nursing care and supervision within a secure setting and not medical care provided by a physician.

A registered charity (the “Corporation”) operates a long-term care home that provides extensive care for individuals who have been approved following an assessment process for admission by their regional Community Care Access Centre as being in need of nursing care and medical attention. The Corporation has been licensed by the Province of Ontario’s Ministry of Health and Long-Term Care (MOHLTC) pursuant to the Long-Term Care Homes Act, 2007 to operate the home, and the MOHLTC is the main source of funding of the operations of the home. Health care services provided at the home include:

- 24-hour nursing services and assistance with daily living

- daily physician’s services and visit for each resident

Physician services are provided on an ongoing, continual basis in that physicians regularly visit and provide 24-hour on-call services. All residents of the home have a physician on-call at all times.

CRA ruled that the Corporation is a facility operator making facility supplies at a qualifying facility (i.e., the home) so that it is eligible for the 83% federal public service body rebate as well as the 87% Ontario PSB rebate. In its explanation, CRA briefly described satisfaction of the “qualifying funding” requirement in s. 259(2.1) as well as the facility accreditation requirement in s. 259(2.1)(c) (here, by the MOHLTC) and, similarly to 138196, provided an extended discussion of Elim Housing, noting that in that case:

• physicians visited residents frequently (e.g., roughly on a bi-weekly basis); …
• registered nurses were at the facility at all times, and nurses were in regular communication with physicians for prescription or advice;
• the facility received funding for 2.8 hours of care per resident per day …;
• the care provided was of a different type than ordinary assistance with activities of daily living that a more robust individual might require.

CRA then stated:

After comparing the services and the care provided by the Corporation at [X] to its residents with the elements described in Elim, we are of the view that facility supplies are provided at [X] by the Corporation.

A registered charity (the “Corporation”) operates a nursing home, or long-term care facility (the Facility) that provides extensive care for individuals who are unable to manage their own basic requirements. The Corporation has a Long-Term Care Home Licence, issued by the Province of Ontario’s Ministry of Health and Long-Term Care (MOHLTC) pursuant to the Long-Term Care Homes Act, 2007, for the Facility. The Facility only has residents who have been assessed by a physician retained by the Province as being unable to live independently. They require ongoing medical support to assist them in their living and health care needs. All residents require medical and/or nursing care 24 hours per day. There are a specified number of physicians who are either present or on call 24 hours per day, and also extensive nursing services provided.

CRA ruled that the Corporation is a facility operator making facility supplies at a qualifying facility (i.e., the Facility) so that it is eligible for the 83% federal public service body rebate as well as the 87% Ontario PSB rebate. In its explanation, CRA briefly described satisfaction of the “qualifying funding" requirement in s. 259(2.1) as well as the facility accreditation requirement in s. 259(2.1)(c) (here, by the MOHLTC), and focused on the “facility supply” requirement, stating:

Elim Housing … made the determination that Elim was entitled to claim the 83% PSB rebate as a facility operator operating a qualifying facility based on the presence of the following elements which indicated Elim to be making facility supplies:

• all of the residents had conditions that required “complex care” …;

• the residents were extremely dependent on care either by reason of mental or physical impairment …;

• residents were under the care of a physician, who was either associated with the facility or had a pre-existing relationship with the resident;

• a tailored care plan was created for each resident, documented and implemented: …

• physicians visited residents frequently (e.g., roughly on a bi-weekly basis);

• physicians were at, or on-call to attend, the facility at all times;

• physicians provided substantial medical care (e.g., addressed medical concerns, participated in medication reviews, attended interdisciplinary meetings);

• registered nurses were at the facility at all times, and nurses were in regular communication with physicians for prescription or advice;

• the facility received funding for 2.8 hours of care per resident per day (the calculation was based on scheduled staffing hours);

• the care provided was of a different type than ordinary assistance with activities of daily living that a more robust individual might require.

After comparing the services and the care provided at the Facility to its residents to the elements described in Elim, we are of the view that facility supplies are provided at the Facility by the Corporation.

The "Society") is a registered charity which provides long-term residential care for seniors with complex care needs. CRA was asked whether the care services rendered by are assistants to residents, including bathing, grooming, dressing, feeding, transporting and mobility assistance, were "therapeutic health care services" for purposes of s. 259(1)(a)(iii)(D). CRA stated that in order for care services to so qualify,

there must be an identification or diagnosis of a particular injury, illness, disability or other health issue (i.e., what we will call a "health condition") of an individual and it must be reasonable to conclude that the service in question is rendered with the objective of treating that health condition or its symptoms.

Although most of the mooted services here instead entailed assistance with activities of daily living, CRA noted that "there may be situations in which a service of assisting a resident with an activity that an average person would often perform on their own may be considered a therapeutic health care service." To illustrate, CRA offered the following examples:

(i) Turning or repositioning and the direction of a physician to deal with bed sores;

(ii) Application of topical cream or ointment at the direction of a registered nurse to treat a wound;

(iii) Range of motion exercises in accordance with a treatment plan of a licensed physiotherapist to address stiffness in the shoulder area during recovery from a minor fracture;

(iv) Taking a resident for walks while recuperating from surgery at the recommendation of a physician recommends periodic walks to prevent blood clots and improve gastrointestinal and urinary tract function.

A division of a registered charity which had been designated as a hospital authority by the Minister, and which had been claiming the public services body rebate at a 50% rate in respect of GST incurred in operating an Ontario nursing home (where most of the residents suffered from Alzeimer's or other cognitive deficiencies), was not entitled to claim the rebate at the higher 83% rate that would have been available if it had qualified as operating a "qualifying facility" for use in making "facility supplies," given that "the vast majority of care services provided at the Home are rendered by the nursing and support staff, with minimal instruction, management or supervision by a physician." This interpretation of the requirement for "active direction or supervision" or "active involvement" of a physician (or certain substitutes) accorded with the purpose of the higher rebate:

...it was not the intent of the Department of Finance to make the 83% PSB rebate available to nursing homes and similar long-term care operations that do not make supplies of health care services similar to those traditionally provided in hospitals....These [latter] types of facilities include, for example, those that offer a high level of therapeutic care, cancer clinics, day surgery clinics and community health centres that render primary care services.

If a local authority is determined to be a municipality, it has the benefit of municipal status for all GST/HST purposes. For example, a paramunicipal organization can apply to be determined to be a municipality. ....

If a person is designated to be a municipality for particular exempt municipal services that it supplies, the person is considered to be a municipality only for the purposes of the public service bodies' rebate and only for those particular exempt municipal services. The designation does not apply to the organization as a whole.

The designation allows the person to apply for a rebate of the GST/HST using the municipality rebate factor, but only for the tax paid or payable on purchases used in the course of supplying the exempt municipal services for which the organization was designated.

The Ontario Rebate for Electricity Consumers Act, 2016 (Ontario Rebate Act), provides financial assistance to certain Ontario electricity recipients by means of an 8% reduction in the amount payable for electricity. The 8% rebate amount is shown as a separate line item that reduces the total amount payable for electricity after the HST has been calculated and applied. How does the rebate impact input tax credits and public service body rebate claims?

After ruling that the rebate “has no impact on claiming ITCs or the PSB rebates of the provincial part of the HST,” CRA stated:

The Ontario rebate is financial assistance provided by the province to eligible recipients of electricity and serves to reduce the total amount payable by the recipients. The rebate is not a reduction in consideration for the supply of electricity, nor is it a reduction to the HST payable in respect of the supply of electricity. The Ontario rebate does not alter the value of the ITC that is claimable by a registrant who uses the electricity consumed in its commercial activities.

Furthermore, the Ontario rebate does not impact on the calculation of the non-creditable HST charged in respect of the electricity for the claim period, and therefore does not affect the amount of the PSB rebate.

Rebate calculated individually

14. Non-creditable tax charged is calculated on a property by property, service by service basis.