Section 146

Administrative Policy

3 April 2019 GST/HST Ruling 188947 - Tax status of supplies made by a municipality

additional building inspection charges of municipality were taxable

The granting by a municipality of a building permit is exempted under Sched. V, Pt. VI, s. 20(c), which references inter alia the supply of a permit and of processing an application therefor. CRA noted that s. 146 renders governmental testing or inspection services taxable unless specifically exempted, and ruled that the exemption for a building permit did not extend to additional charges for additional inspections of the building work or additional reviews of plans or changed plans or additional charges for overtime building inspections.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part V - Section 20 - Paragraph 20(c) exemption for building permits does not extend to charges for extra inspections or reviews or overtime 241
Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part V - Section 20 - Paragraph 20(c) - Subparagraph 20(1)(c)(ii) fees for Municipality reviewing liquor licence application, including any public consultation charges, were exempt 86

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

Examples of application of s. 146

18. Section 146 deems certain listed supplies made for consideration by a government, or a body established by a government, among others, to be made in the course of a commercial activity unless the supply is specifically exempt from the GST/HST under another provision of the Act. Examples of such supplies when made for consideration would include a supply by a government of a service of inspecting property, such as a building or an elevator, to verify that it meets particular standards of quality; a supply by a government to a consumer of a hunting or fishing licence; or a supply by a government of a right to enter a provincial or territorial park.

Paragraph 146(e)

Administrative Policy

25 May 2021 GST/HST Ruling 204710 - Amounts paid to a municipality pursuant to a licence agreement

grant of right to use municipal lands was a taxable supply

A registrant (Aco) provides to numerous municipalities a program of installing something (“X” – description redacted) in various of the municipalities’ public spaces, at no cost to each such Municipality. Under an agreement with the Municipality, the parties agree that the Municipality has conferred upon ACo certain rights to use municipal lands in connection with X, and Aco agrees to make certain payments to the Municipality. Under the program, X is sponsored by local small businesses that will not only pay for the program in its entirety, but also allow for such small revenue stream to the Municipality.

Before concluding that the amounts paid to the Municipality were consideration for a taxable supply, CRA noted that:

  • S. 146(e) deemed a supply of a right to enter, to have access to or to use property of the municipality, when made for consideration by the municipality, to be made in the course of a commercial activity, except where the supply was an exempt supply.
  • S. 20(l) of Sched. V, Pt. VI, excluded application of the exemption in s. 20(c) for supplies of licences by a municipality of rights to enter or access its property.
  • The exemption in Sched. V, Pt. VI, s. 25 for supplies of real property made by various public service bodies did not extend to supplies of real property by a municipality.
Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 20 - Paragraph 20(l) licences of real estate by a municipality are GST/HST-taxable 180