In times of COVID, PPE is a necessity of life

  • September 30, 2020

The CBA’s Commodity Tax, Customs and Trade Section says personal protective equipment should be added to the list of things considered necessary to life – and exempt from GST and HST under the Excise Tax Act.

In a letter to the Finance Minister, the Section noted that GST and HST currently applies to PPE such as face and surgical masks, plastic face shields, protective eyewear, garments and gloves, at regular rates. While institutions such as hospitals and some public entities have been able to claim partial rebates, health-care providers, first-responders, nursing homes, schools and other purchasers are not entitled to claim full input tax credits when they purchase PPE.

“Vulnerable people, including seniors and immune-compromised individuals, should not have to pay unrecoverable GST/HST on a necessity of life,” the Section writes. “In fact, nobody should have to pay GST/HST and other sales taxes on PPE as it is purchased to protect the health of the users and those they encounter.”

The Section also suggests zero-rating other commodities including rubbing alcohol, disinfectant wipes, hand sanitizer and other products which, while not considered necessities of life, are vital to stopping the spread of the coronavirus.

The Section recommends adding the following in Part II to Schedule VI of the Excise Tax Act:

A supply of personal protective equipment designed or fitted to be worn by or for use by an individual and recommended in writing by a federal, provincial, municipal or other chief medical officer to protect persons from contracting or infecting others with the novel coronavirus (COVID-19) or similar diseases.

It notes that “a flexible and revisable policy statement could also identify different types of PPE as zero-rated.”