Tax Court of Canada


Goods and Services Tax


Registrant making self-supply of addition to facility required to include HST return on self-supply

Registrant owned and operated 56-bed facility nursing home. Of those beds 45 were operated for Nova Scotia Department of Health (department), 10 for Department of Veteran Affairs; and one respite bed. In 2007, department sought proposals regarding provision of long-term nursing care. Registrant made proposal of providing 20 additional beds and proposal was accepted. As result registrant constructed 20-bed addition to its facility with 2010 occupancy. Under Excise Tax Act, registrant was considered to have made self-supply of addition to facility and was required to include in its Harmonized Sales Tax (HST) return (output) tax on self-supply. Registrant alleged HST on self-supply should be equal to applicable rate of tax multiplied by fair market value of property. Registrant filed its return for 2010 accordingly. In period and prior reporting periods, registrant claimed input tax credits (ITCs) with respect to construction of addition to facility. Cumulatively, ITCs claimed were greater than amount of output tax reported on self-supply. Minister of National Revenue (Minister) alleged registrant could not receive overall net tax refund of HST with respect to addition because s. 191.1 of Act applied (section prevented overall net tax refund on self-supply by increasing value of addition for purpose of computing tax on self-supply). Registrant appealed. Appeal dismissed. Section 191.1 applied to matter at hand: there was self-supply of residential complex; builder of addition received payments from government of Nova Scotia. However, critical question was whether, at time of self-supply, registrant could expect to receive amount of money from government of Nova Scotia for purpose of making residential units in addition available to individuals. While residents contributed to accommodation costs depending on their income, funding by province was such that province was making significant contribution to cost of residential accommodation in new facility. There was question that at time of self-supply, registrant could expect to receive amounts of money from government of Nova Scotia. Language in statute was simply that there had to be payment for state purpose, nothing more. Requirements of s. 191.1 were met so long as part of amounts received were for purpose of making residential units available.

High-Crest Enterprises Limited v. The Queen (2017), 2017 CarswellNat 5886, 2017 TCC 210, Gaston Jorré J. (T.C.C. [General Procedure]).


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