With the February 11, 2010 release of GST/HST Notice No. 250, it’s clear that a range of intermediation services became subject to the GST and HST effective December 14, 2009, the date of a brief announcement by the Department of Finance. Many of the examples given by the Canada Revenue Agency of taxable supplies are a complete surprise to the financial sector, which is now scrabbling to deal with what has effectively been a retroactive application. All mutual fund commissions, certain finance commissions, and a yet-to-be defined range of equity brokerage fees are affected.
All Canadian directors should be paying attention to these developments. Whether you work directly in the financial services sector or rely on it for capital, this ruling has the potential to affect your board.
What should directors do?
Canadian directors should maintain open channels of communication with their bankers and other financial-service providers to stay abreast of exactly how this CRA ruling may affect their boards. Directors should also disseminate whatever insight they gain from this communication to their executives and management teams. The more information that everyone has, the better equipped everyone will be should this ruling result in actions needed at the board level.
To learn more, please review Mike Firth's article, which was first printed in the CCH GST Monitor.