Statement on GST / HST Measure in 2013 Federal Budget

As Registrants may already know, the recent Federal Budget tabled by Finance Minister Jim Flaherty announced a measure that applies to the provision of certain psychological services. The measure is intended to ensure that the government’s policy of exempting health services from the GST / HST is limited to services that are manifestly addressing the provision of health care. In particular, the government’s measure is designed to ensure that non-health services are not exempted from the GST / HST. In technical language, the term ‘supplies’ is often used when describing ‘services’.

It is important to note that there is no change with respect to the application of the GST / HST exemption for basic health services provided by psychologists and other health professionals. The goal of these services is to protect, maintain, restore the health of persons, and the provision of palliative services. These constitute most of the services provided by health professionals.

Some Registrants also provide professional services for other purposes. These services are often subject to the GST / HST. Examples of such services provided by some psychologist are (1) assessments and reports undertaken with the goal or purpose of providing information and opinions related to a matter before the court or other legal matter; and proceeding or assessments and reports undertaken with the goal or purpose of providing information and opinions related to eligibility for insurance or similar benefits. The recent measure announced in the federal Budget tightens the rules on these services. The effective date of the application of the measure is March 22.

Since the tabling of the Federal Budget, CRHSP has received inquiries about the application of the measure. This statement responds in part to those inquiries and concerns that many Registrants may have. This statement is intended to provide only general information. It should not be regarded as providing accounting, financial or taxation advice. Registrants should individually consider whether they could benefit from specialized accounting, financial and taxation advice from a qualified professional. When doing so, verify that the professional has specific GST / HST expertise, especially with respect to health professionals and services.

It is expected that the Canada Revenue Agency will be issuing Interpretation documents that will provide additional information. CRHSP will monitor this issue and if warranted provide an updated statement.

Prior to the recent Federal Budget, CRHSP had initiated discussions with Grant Thornton on the development of an updated Accounting and Taxation workshop. In light of the measure announced in the Budget, CRHSP is accelerating this process.

Link to Canadian Revenue Agency NOTICE 286: 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