By Ryan M. Prendergast

Proposed Amendments to Excise Tax Act and GST/HST Exemptions for COVID-19 Rapid Tests

The Canada Revenue Agency (CRA) has published “News 111 Excise and GST/HST News – No. 111” (“News 111”), which reiterates some of the proposed amendments to the Excise Tax Act first mentioned in Budget 2022. As described in Charity & NFP Law Bulletin No. 510 and restated in News 111, Budget 2022 proposes to expand the eligibility for the 83% hospital GST/HST rebate to cover charities and not-for-profits (NFPs) that deliver health care services when there is the active involvement of, or recommendations of, either a physician or a nurse practitioner, regardless of geographic location. Previously this rebate was restricted to charities and NFPs that delivered health care services with active involvement of or recommendation of a physician, though in geographically remote communities this could also include the active involvement of a nurse practitioner. These expanded measures in Budget 2022 would generally apply to rebate claim periods ending after April 7, 2022.

News 111 also provides that while supplies of rapid COVID-19 test kits are generally zero-rated, several exemptions for supplies by charities and other public sector bodies could apply. For example, supplies of rapid COVID-19 test kits may be exempt from GST/HST when sold by a charity or non-profit organization if the test kit is sold for an amount that does not exceed its direct cost, when sold by a charity or non-profit organization when 90% or more of the sales of such test kits made by the supplier are free of charge, and when the supply of donated rapid COVID-19 test kits is by a registered charity if the supply is not zero-rated.

New Landing Page on CRA Website for Federal/Provincial/Territorial Charity Regulators

The CRA has added a page to their Charities and giving website which provides information about the Federal/Provincial/Territorial Network of Charity Regulators (FPT network). The FPT network was established in 2004 and provides a forum to improve the intergovernmental regulation of charities. It is made up of officials from federal, provincial, and territorial governments, generally representing government areas responsible for the charitable sector.

The FPT Network has several goals, including:

• identifying emerging issues that affect charities across jurisdictions;
• developing coordinated regulation between federal, provincial, and territorial governments;
• reducing the administrative burden on charities; and
• understanding and communicating the needs, challenges, and strengths of the Charities Directorate’s regulatory approach.

​Read the June 2022 Charity & NFP Law Update