Canada Revenue Agency provides list of exempt and taxable health care service providers 


June 2011

Tax Bulletin

The Canada Revenue Agency (CRA) has attempted to clarify which health care professionals it considers to be engaged in exempt activities and which health care professionals it considers to be engaged in taxable activities for goods and services tax (GST) or harmonized sales tax (HST) purposes. 1 The lists provide by the CRA are not all-inclusive. However, they do give a general idea as to the thinking of the CRA.

The CRA will enforce the GST/HST rules according to the recent administrative guidelines. If the health care professionals that are listed are in the CRA's taxable list are not charging GST/HST, they may be audited and assessed. There is an increased likelihood that health care professionals will be in the CRA national priority list for audits this year and in the coming years. In the HST provinces, (Nova Scotia (15% HST), Ontario, Newfoundland/Labrador, New Brunswick (13% HST), British Columbia (12% HST)), the assessments may add up to large amounts.

The CRA's position is:

General Rule: Any basic health care service rendered to an individual by a health care professional that is specifically identified in Part II of Schedule V to the Excise Tax Act (the ETA) is exempt.

Exception to General Rule: Any health care service provided by other therapists and health care workers is taxable.

Exemption to Exception: Certain services provided by the health care professional or health care worker may be exempt when provided to an individual in an exempt health care setting. For example, supplies made by the operator of a nursing home services rendered by nursing care aides are exempt when they form part of an exempt institutional health care service rendered to a resident of the nursing home.

In addition, otherwise taxable services may be exempt when rendered by a listed exempt health care provider. For example, provincially licensed physiotherapists can perform exempt physiotherapy services. Acupuncture services are normally taxable. However, if physiotherapists are entitled under the provincial law that regulates physiotherapy services to perform acupuncture on their clients in the course of providing physiotherapy services, then such physiotherapy services incorporating acupuncture would be exempted.

(A)    Health Care Service Providers That Provide Exempt Health Care Services

According to the CRA, the following services by the following provincially regulated (licensed or otherwise certified) health care professionals rendered to individuals/patients are specifically identified in Part II of Schedule V to the ETA as exempt:

  • physicians;
  • dentists and orthodontists;
  • registered nurses, registered nursing assistants, licensed or registered practical nurses;
  • registered psychiatric nurses;
  • optometrists;
  • chiropractors;
  • physiotherapists;
  • chiropodists;
  • audiologists;
  • speech-language pathologists;
  • occupational therapists;
  • psychologists;
  • podiatrists;
  • midwives;
  • dieticians;
  • social workers; and
  • dental hygienists.

        ***Please note: this is not an exhaustive list

(B) Health Care Service Providers That Provide Taxable Health Care Services

If a health care professional or health care worker cannot be found in Part II of Schedule V to the ETA, their services are likely taxable. Examples of therapists and other health care workers whose services are generally considered by the CRA to be taxable for GST/HST purposes are:

  • assistance such as physiotherapy and occupational therapy assistants;
  • social service workers (this is a separate profession from social workers);
  • laboratory technicians;
  • nursing care aides;
  • polysomnographic technologists;
  • acupuncturists;
  • kinesiologists;
  • massage therapists;
  • naturopaths;
  • reflexologists;
  • homeopaths;
  • reiki therapists;
  • sports therapists;
  • rolfing therapists;
  • traditional Chinese medicine providers;
  • phlebotomists;
  • personal support workers.

        ***Please note: this is not an exhaustive list

There are many other exemptions to the General Rule. Therefore, health care professionals that are not sure whether they are required to charge GST/HST should contact a GST/HST lawyer or professional or contact the CRA for a GST/HST ruling or interpretation.

by Jamie Wilks

1 Excise and GST/HST News No. 80 (Spring 2011)

a cautionary note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2011