Input Tax Credit Allocation Methods (GST/HST) Regulations

A dual bank/insurer is an insurer

7. … Under section 1 of the Regulations, a bank is defined for purposes of the Regulations in respect of a fiscal year to not include an insurer. Therefore, if a person is a bank as defined in subsection 123(1) at any time in a fiscal year and is also an insurer as defined in section 1 of the Regulations, then that person will be an insurer and not a bank throughout that fiscal year for purposes of the Regulations (that is, for purposes of determining the prescribed classes, prescribed amounts and prescribed percentages that may apply).

Foreign insurer that does not carry on an insurance business in Canada is not an insurer

8. An insurer is defined in subsection 123(1) to mean “a person who is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada an insurance business or under the laws of another jurisdiction to carry on in that other jurisdiction an insurance business”. Under section 1 of the Regulations, an insurer is defined for purposes of the Regulations in respect of a fiscal year to mean an insurer as defined in subsection 123(1) that also carries on at any time in the fiscal year an insurance business as the person’s principal business in Canada. As a result, a person, such as a foreign bank, that is authorized to carry on an insurance business in its home jurisdiction but does not carry on an insurance business in Canada will not be an insurer for purposes of the Regulations although it might be an insurer as defined in subsection 123(1).