As most RCC members will be aware, on May 28, 2015, the Federal Government introduced a Notice of Ways and Means to eliminate the GST/HST on feminine hygiene products, effective July 1, 2015. This followed on a motion which received the unanimous support of the House of Commons earlier in May.

Compliance Obligations

Parliament has risen for the summer and is highly unlikely to return before the next federal election, scheduled for October 19, 2015. This raises the question of the status of the May 28 announcement.

Although feminine hygiene products are, strictly-speaking, still taxable under the Excise Tax Act, the Canada Revenue Agency (CRA) will administer the law based on the Ways and Means Motion (i.e., as if the law has been amended to remove the tax). This is standard practice for Ways and Means Motions. Moreover, given the unanimous political support for this measure, it is inconceivable that a future government would fail to pass the measure into law.

What that means is that you may legally (and should practically) stop collecting GST /HST on feminine hygiene products as of July 1, 2015. If you do collect the GST/HST on any of these items after June 30 (if for example, there has been inadequate time to reprogram point of sale devices), then you must continue to remit the tax collected to CRA.

CRA has provided Q&A on the issue at the following links:
English
French

Definition of Feminine Hygiene Products

Feminine hygiene products are defined as sanitary napkins, tampons, sanitary belts, menstrual cups, or other similar products. To determine whether goods would qualify for relief under the proposed measure, you may call the CRA Business Enquiries line at 1-800-959-5525 for general enquiries, or call a GST/HST rulings centre at 1-800-959-8287 for technical enquiries, or to request a written GST/HST ruling or interpretation. Not included are products such as deodorants, douches, sprays, syringes and feminine wipes.

Related Provincial Issues

On June 18, the Government of Quebec indicated its intention to follow the federal lead and eliminate the Quebec Sales Tax (QST) on feminine hygiene products.

On June 24, the Government of Saskatchewan announced the decision to remove the PST from these items.

Given the changes in the five GST-harmonized provinces, Quebec and Saskatchewan and the existing tax-free status in British Columbia and Alberta, Manitoba will be the only province still taxing feminine hygiene products after June 30, 2015.

It should be noted that to-date, Ontario and Nova Scotia have relied upon instant point-of-sale-rebates to remove their portion of the HST from feminine hygiene products. In future, point-of-sale rebates will not be required in any harmonized province, as the law will have changed to zero-rate these items.

If you have any questions or concerns, please don’t hesitate to contact: Karl Littler, Vice President Government Relations and Strategic Issues at: [email protected] or 416-467-3783