24 July 2017 Ruling 138196

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.

After ruling that an Ontario nursing home (the “Facility”) that was operated by a registered charity (the “Corporation”) qualified for the federal 93% PSB rebate as well as the Ontario 87% PSB rebate on the basis of its similarities to the facility in Elim Housing, CRA stated:

Generally, subsection 259(14) means that where the Corporation incurs 90% or more of the GST/HST for a property or a service acquired in its capacity as a facility operator (e.g., for use in making facility supplies), all of that GST/HST is deemed to have been incurred in that capacity. As such, the Corporation could claim a PSB rebate for that property or service at the rate of 83% for the GST and the federal part of the HST and, as a resident only in Ontario, at 87% for the provincial part of the HST. For example, if the Corporation incurs GST/HST on its utilities, and the Corporation determines it incurs 93% of the GST/HST in its activities as a facility operator for making facility supplies, the Corporation may claim 100% of the GST/HST it pays on the utilities using the 83% (and 87%) PSB rebate rates.