Tax & Trade Blog

The Tax Court of Canada recently released its decision in Windsor Elms Village for Continuing Care Society v. The King (2023 TCC 58), which dealt with the application of the GST/HST self-supply rules to a long-term care facility for seniors. The decision illustrates the complexity of the self-supply rules under the Excise Tax Act (“ETA”), especially in the context of mixed use or exempt use real estate transactions.

Tax assessments are difficult to appeal in Canada because the Canada Revenue Agency (“CRA”) is allowed to make factual ‘assumptions’ which the taxpayer must disprove – or lose its case!

Two recent Federal Court of Appeal (FCA) decisions have seemingly expanded these powers to assumptions of “mixed fact and law” – although the second FCA seemingly walks back the first.

Justice John Owen of the Tax Court of Canada has rendered one of the most important and potentially far-reaching decisions in 33 years of GST.  While Fiera Foods Company v. The King, 2023 TCC 140 is about some other things, the Tax Court’s keen observations about GST “Information Requirements” is its most important part:  they require sufficient evidence to be obtained prior to claiming input tax credits (“ITCs”), but do not specify or require the “form” of that evidence.

On September 14, 2023 the Prime Minister announced upcoming legislation to remove the Goods and Services Tax (GST) on the construction of new apartment buildings. 

The announcement also called on the provinces participating in the Harmonized Sales Tax (HST), or that impose their own provincial sales tax, to match the federal government’s rebate.  In a twitter post the Ontario Minister of Finance has already indicated they will “work closely with Ottawa to do the same when it comes to Ontario’s portion of the HST.”

While the government of Canada appears focused on the political hot potato that is our residential housing industry, announcing new rules for rental houses are coming,  the CRA is headed in the other direction, apparently targeting residential home-owners that have recently sold their homes, on the basis that the degree to which they fixed them up prior to sale caused the homes to become “new homes” and subject to full GST/HST on their fair market value.