Rebates for Public Bodies

B.C. provides partial rebates of the provincial portion of the HST for eligible public service bodies to ensure that, on average, these entities pay no additional tax due to harmonization. The rebates are designed to mitigate the impact of the HST while providing certainty for eligible entities.

Public service bodies include municipalities and other eligible local government entities, eligible school authorities, universities, public colleges, and hospital authorities, and eligible registered charities and qualifying non–profit organizations.

Municipalities and other eligible local government entities are able to claim a 100 per cent rebate of the 5 per cent federal portion of the HST (which replaces the GST in B.C.) and a 75 per cent rebate of the 7 per cent provincial portion of the HST.

Eligible universities and public colleges are those that qualify for the federal rebate for universities and public colleges. All entities that are eligible for the federal rebate are also eligible for the provincial rebate.

Eligible universities and public colleges are able to claim a 67 per cent rebate of the 5 per cent federal portion of the HST (which replaces the GST in B.C.) and a 75 per cent rebate of the 7 per cent provincial portion of the HST.

B.C. provides a rebate of 58 per cent of the provincial portion of the HST for eligible hospital authorities. As the tax rate drops, the rebate will be reduced to correspond with the lower HST rate of 6% on July 1, 2012 and 5% on July 1, 2014.

Eligible entities are health authorities and other organizations that qualify for the federal rebate for hospital authorities. All entities that are eligible for the federal rebate are also eligible for the provincial rebate.

B.C. provides a rebate of 58 per cent of the provincial portion of the HST for eligible facility operators and external suppliers. Facility operators and external suppliers that qualify for the federal GST/HST rebate for these entities will also be eligible for a provincial HST rebate for their eligible activities.

Eligible hospital authorities, facility operators and external suppliers are able to claim an 83 per cent rebate of the 5 per cent federal portion of the HST (which replaces the GST in B.C.) and a 58 per cent rebate of the 7 per cent provincial portion of the HST.

B.C. is providing a rebate of 57 per cent of the provincial portion of the HST for eligible registered charities and qualifying non–profit organizations.

Eligible charities and non–profit organizations are those that qualify for the federal rebate for registered charities and qualifying non–profit organizations. All entities that are eligible for the federal rebate are also eligible for the provincial rebate.

Eligible registered charities and qualifying non–profit organizations are able to claim a 50 per cent rebate of the 5 per cent federal portion of the HST (which replaces the GST in B.C.) and a 57 per cent rebate of the 7 per cent provincial portion of the HST.

The rebate rates were set to ensure that, on average, eligible entities will not pay any more in provincial HST than they paid in PST. The rates reflect that the HST applies to a broader range of goods and services than the PST and also that these entities currently pay PST on most goods and certain services.

The rebate rates differ among sectors because the rates are affected by the particular expenditure patterns of a sector. Different sectors buy different mixes of goods and services and therefore pay different amounts of tax, both under the PST and under the HST. The rebate rate is based on the change in tax burden, or the estimated additional tax that would have been paid by a sector without a rebate (relative to the total provincial HST that would have been paid without a rebate).

The rebates do not ensure that every entity pays exactly the same amount of tax as it did prior to harmonization. The impact on any particular entity, or any particular subgroup of entities within a sector, depends on the specific mix of goods and services purchased by the entity or group.

The same methodology was used to set the rebate rate for each sector:  municipalities, school authorities, universities and public colleges, hospital authorities, and registered charities and qualifying non–profit organizations.

The provincial rebates are administered by the Canada Revenue Agency together with the federal rebate, in a manner consistent with the administration of the federal GST /HST rebate.

The additional tax that would have been paid by the entities in each sector without a rebate was estimated by subtracting the total amount of PST paid from the estimated total amount of provincial HST that would have been paid without a rebate (B.C. HST minus B.C. PST = additional tax due to harmonization). The estimated additional tax was then divided by the estimated total provincial HST that would have been paid without a rebate to determine the appropriate rebate percentage.

The percentage rebate for municipalities was set based on Statistics Canada data and Canada Revenue Agency GST rebate data. The percentage rebates for all other sectors were set based data provided by Statistics Canada.

To illustrate, if a sector paid a total of $1 million in PST and would have paid a total of $2 million in provincial HST without a rebate, the additional tax due to harmonization before the rebate is $1 million. To determine the rebate rate, the additional tax is divided by the total estimated provincial HST before any rebate ($1,000,000 / $2,000,000 = 50 per cent). Therefore, the rebate rate for this sector is 50 per cent of provincial HST paid. This rebate rate returns $1 million to the sector, ensuring that, on average, no additional tax is paid due to harmonization.

The rebate rate for each sector was set to ensure that – on average – eligible entities in that sector will pay no additional tax due to harmonization.

If you have any questions or wish to make a technical enquiry on the GST/HST by telephone, please contact the Canada Revenue Agency at 1‐800‐959‐5525.