Casual legal: The CRA's municipal determination

DISCLAIMER: This article is meant to provide information only and is not intended to provide legal advice. You should seek the advice of legal counsel to address your specific set of circumstances. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this article to be outdated. 

By Hannah Schmakeit 

Reynolds Mirth Richards Farmer LLP 

Alberta Municipalities Casual Legal Service Provider  

Under the Excise Tax Act (RSC 1985, c E-15, the “Act’), municipalities receive certain GST/HST exemptions and certain rebates. However, a variety of other types of municipal entities apply to the Minister of National Revenue to be considered a municipality for the purposes of the Act and receive similar GST/HST exemptions and certain rebates as municipalities. The Minister then evaluates each application on a case-by-case basis and has discretion to determine what qualifies and what doesn’t. 

To be granted this municipal determination for the purposes of the Act, the municipal entity must be: 

• established by one or more municipalities, or by a province at the request of one or more municipalities;
• owned or controlled by one or more municipalities; and
• providing municipal services to the residents and owners of property of a local geographic area and those services would be the type that a municipality would normally provide. 

Each of these criteria have their own indicia and legal tests to establish themselves, so it can quickly get complicated. For example, a community centre board simply being established by and solely owned by a municipality in Alberta is not enough to get determined to be a municipality for the Act’s purposes. The Canadian Revenue Agency (the “CRA”) will investigate into the operations (through requesting copies of bylaws, agreements, and other documents of the entity) of the entity to determine if they’re providing municipal services to the right group of people. 

The CRA’s publication RC4049(E) Rev. 25 provides a lot of helpful information and guidance regarding all the specifics of when an entity may or may not qualify for municipal determination. For assistance with any stage of the municipal determination application, please reach out to our team. 

To access Alberta Municipalities Casual Legal Helpline, Alberta Municipalities members can call toll-free to 1.800.661.7673 or email casuallegal [at] abmunis.ca (casuallegal[at]abmunis[dot]ca) and reach the municipal legal experts at Reynolds Mirth Richards and Farmer LLP. For more information on the Casual Legal Service, please contact riskcontrol [at] abmunis.ca (riskcontrol[at]abmunis[dot]ca), or call 310.MUNI (6864) to speak to Alberta Municipalities Risk Management staff. Any Regular or Associate member of Alberta Municipalities can access the Casual Legal Service.