Flaherty Somewhat Clarifies GST/HST On Financial Services
Mortgage planners can take a very slight sigh of relief. Finance Minister Jim Flaherty said the Finance Department has “no intention of changing tax policy” on financial services.
In response to whether GST/HST would be applied to services like mortgage brokering, Flaherty said:
“We are not imposing new taxes.”
“We will have the tools in the first Budget Implementation Act to make sure we get back to the status quo before the court cases, so people can rest assured that the tax treatment of defined financial services will not change.”
Jim Murphy, head of the Canadian Association of Accredited Mortgage Professionals (CAAMP), said: “It gives us some assurance.”
Nonetheless, it could be weeks before we know, for sure, how CRA’s financial services tax interpretation plays out. There are too many conflicting reports at the moment. For example, legal analysts from one of Canada’s top business law firms, Stikeman Elliot LLP, wrote on February 26:
“The CRA confirmed to [us] during a phone conversation that facilitatory services offered by an intermediary in the financial services industry, such as mortgage brokerage services, are likely to be taxable under the new regime.”