On March 24, Canadian Underwriter Magazine wrote an article titled “Feds propose to slap GST tax on currently exempt insurance-related services”, causing a bit of concern and confusion among brokers. Given the number of inquiries IBAO has fielded from brokers and members of the industry press, it is quite clear that this is an issue that has garnered the attention of Brokers across Ontario.
The concerns raised are contrary to opinions we’ve received from our independent experts on our research regarding the HST. At this time, IBAO does not believe that brokers’ commissions will be taxable under the GST. That being said, we are seriously reviewing this and have already engaged our independent tax experts at BDO Dunwoody for their opinion.
What seems to have led to the debate was CRA’s GST/HST Notice 250 released in February and Price Waterhouse Coopers Paper released earlier this month.
On Friday, we noted that the Ministry of Finance has already posted a notice on their website that the CRA is reviewing and updating the technical guidance it has provided in notice 250 and invited stakeholder commentary. In the release posted on the Federal Minister of Finance’s website, Minister Flaherty said, “The proposed changes contained in the Notice of Ways and Means Motion tabled in the House of Commons on March 22, 2010 are designed to confirm our long-standing policy intent and restore the situation that existed prior to the court decisions. We are not imposing new taxes.”
IBAO will be working closely with our tax experts, IBAC and other stakeholders, and if required, actively participate in the proposed consultation process to ensure clarity on the issue for Brokers in Ontario.