Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 210585
Business Number: […]
Dear [Client]:
Subject: GST/HST RULING
Application of the GST/HST to the supply made by a minor hockey association of registering a participant in a minor hockey program.
Thank you for your letter of [mm/dd/yyyy], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to the supply made by the […][minor hockey association] (the Association) to registrants of its minor hockey program. We apologize for the delay in our response.
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
We understand
1. You have stated that the Association is a non-profit-organization as that as that term is defined in subsection 123(1). The Association is registered for purposes of the GST/HST.
2. The Association offers a recreational program (the Program) that provides supervised activities involving athletics. The Program is open to all young children who are interested in playing and learning hockey.
3. The Association’s Policies and Procedures Manual for 2020 - 2021 (the Manual) includes the Association’s mission statement. It states,
“[…]”
4. The Program consists of the following age groups. You have provided us with the number of registrants for each age group for the 2019/20 season:
[…][You included a table detailing the number and percentage of program registrants by Age group.]
5. You have confirmed that this registration is typical for any given year that the Program is offered. You have also confirmed that the Program offered by the Association includes all age groups.
6. The Association’s primary source of revenue is player registration fees for the Program. All players register for the Program directly with the Association and all registration fees are payable to the Association. The Association pays for all expenses associated with the delivery of the Program.
7. The Manual states the following on the subject of registration fees charged by the Association for participation in the Program,
[…]
Items to be included in the cost of registration fees shall include:
• […] Player Insurance
• Ice Costs
• Jersey Fund
• Socks
• Pictures
• Administration
8. There is no overnight supervision provided by the Association during any part of the Program.
9. The Program is not offered specifically to underprivileged or disabled individuals.
RULING REQUESTED
You would like to know if the Association is required to charge the GST/HST on the registration fee in respect of the Program offered by the Association.
RULING GIVEN
Based on the facts set out above, we rule that that the supply made by the Association in respect of the Program offered by the Association is an exempt supply pursuant to section 12 of Part VI of Schedule V to the ETA. The Association is not required to charge the GST/HST on the registration fees in respect of the Association’s Program.
EXPLANATION
In general, supplies of property and services made by a non-profit organization are taxable for GST/HST purposes unless the supply is an exempt supply under a provision in Schedule V. Section 12 of Part VI of Schedule V exempts the following:
A supply made by a non-profit organization of a membership in, or services supplied as part of, a program established and operated by the non-profit organization that consists of a series of supervised instructional classes or activities involving athletics, outdoor recreation, music, dance, arts, crafts or other hobbies or recreational pursuits where
a) it may reasonably be expected, given the nature of the classes or activities or the degree of relevant skill or ability required for participation in them, that the program will be provided primarily to children 14 years of age or under, except where the program involves overnight supervision throughout a substantial portion of the program; or
b) the program is provided primarily for underprivileged individuals or individuals with a disability.
A supply will be exempt under section 12 of Part VI of Schedule V where:
* The supplier is a public sector body (which is defined to include a non-profit organization);
* The supply is of a membership in a program or services supplied as part of a program;
* The program is established and operated by the public sector body;
* The program consists of a series of supervised instructional classes or activities involving athletics, outdoor recreation, music, dance, arts, crafts or other hobbies or recreational pursuits;
* One of the following circumstances applies:
* The program is provided primarily to children 14 years of age or under and it does not involve overnight supervision throughout a substantial part of the program; or
* The program is provided primarily to underprivileged individuals or individuals with a disability.
The Association is a non-profit organization and a public service body that is making a supply of a membership in, or services supplied as part of, the Program. The Association has outlined their Program both in their Policies and Procedures Manual and in writing. From the information provided we have confirmed that the Program established and operated by the Association consists of a series of supervised instructional activities involving athletics, i.e., hockey. We have also confirmed that the Association directly supplies the Program to the participants in the program. This is evidenced by the following:
* The Program is conducted at the Association’s facilities by volunteer instructor/coaches who are engaged by the Association.
* The board of the Association establishes and approves the registration fees and schedules for the programs, advertises the programs, and incurs expenses in respect of the programs.
* Participants in the programs register with the Association using the Association’s registration forms.
* All program fees are payable to the Association.
The Association has provided registration data that indicates the number of registered participants in the Program under the age of 15 is 78% of the total registration in the Program. The registration data provided together with the mission of the Association, which promotes “…[…]…”, supports the requirement in section 12 of Part VI of Schedule V to the ETA that the Program is organized so that it may reasonably be expected, given the nature of the activities or the degree of relevant skill or ability required for participation in them, that the program will be provided primarily to children 14 years of age or under.
Finally, the Association has confirmed in writing that there is no overnight supervision provided by the Association during any part of the Program and that the Program is not offered specifically to underprivileged or disabled individuals.
For these reasons we have concluded that the supply made by the Association in respect of the Program offered by the Association is an exempt supply pursuant to section 12 of Part VI of Schedule V to the ETA.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) is bound by the ruling given in this letter provided that: none of the issues discussed in the ruling are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 343-573-6071. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Trent MacDonald
Public Service Bodies and Rebates Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
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