Supplies of paid parking made by most pubic sector bodies including municipalities, universities, public colleges, school authorities and hospital authorities, are generally taxable. However, supplies of parking made by registered charities (other than municipalities, universities, public colleges, schools or hospitals) have been exempt from GST/HST. Many hospitals have relied on this exemption in structuring paid parking arrangements through their hospital foundations.
The 2013 Federal Budget proposes to remove this exemption for supplies of paid parking made by way of lease, licence or similar arrangement in the course of a business carried on by a charity set up or used by a municipality, university, public college, school or a hospital to operate a parking facility. Once passed, this change is intended to ensure consistent tax treatment of supplies of paid parking made directly by hospitals and supplies made by charities set up or used by hospitals to supply their parking. This measure will apply to supplies made after March 21, 2013.
Therefore, hospitals that operate parking facilities through a registered charity (i.e. hospital foundation) that does not currently collect or remit GST/HST on parking charges must promptly examine their business practices and agreements to ensure compliance with the Excise Tax Act on a go-forward basis.
We are pleased to provide more information on this legal change related to parking facilities and to assist with review and amendment of your business arrangements.
We include also links to more detailed overviews of the 2013 Federal Budget below by Miller Thomson tax lawyers: