The appellants, which were Nova Scotia health authorities operating hospitals, through the administrator of a health care plan, reimbursed their employees for their costs including HST of acupuncture, massage therapy, naturopathy, or homeopathy services. The appellants took the position that they were deemed by s. 175 to have received these care services themselves and claimed public service body (PSB) rebates accordingly.
After indicating (at para. 27) that the only “notable difference” between this case and Westcoast Energy was that in Westcoast Energy the “appellant sought to use the deeming effect of subsection 175(1) as a basis for claiming input tax credits rather than the public service body rebate,” Wong J went on to find that here s. 175(1) did not apply, stating (at paras. 30 – 31):
Here, the Services are of a particularly personal and individual nature, designed to be consumed by the person purchasing the supply. …
[I]t is difficult to reasonably conclude that the Services were used by the appellants’ employees in the course of their employment activities, as I would expect them to access these types of services on their personal time. … [T]he connection between the use of the Services and the employee’s employment activities is even more tenuous when the employee’s family member receives the supply. In these circumstances, it cannot be concluded that the Services are for consumption or use in relation to the appellants’ activities.