Canada Revenue Agency (CRA’s) Ruling - GST/HST Exemption of ACTA’s Registered Counselling Therapists with master’s degree training

Background:

The Canadian Federal Government enacted legislation on June 20, 2024, requiring certain psychotherapists and counselling therapists to no longer collect the GST/HST on their services under the condition they are regulated or “meet equivalent qualifications of regulations.”

Alberta Counselling Therapists / Psychotherapists Remain Unregulated:

As Alberta has not yet completed regulation for counselling therapy/psychotherapy profession under the Health Professions Act, extra steps and CRA rulings were required to ensure Albertans could receive tax-free counselling/psychotherapy services.

CRA ACTA Ruling

Active ACTA Registrants
This is a CRA ruling for Counselling Therapists who are actively registered with ACTA; to meet the CRA requirements, individuals must remain active registrants or register with ACTA.

(CRA) Ruling For ACTA Registered Counselling Therapists: GST/HST exemption on psychotherapy/counselling therapy services

We thank CRA’s GST/HST Ruling Department and the College of Registered Psychotherapists of Ontario’s (CRPO’s) assistance in supporting ACTA to confirm with the CRA that members of the Association of Counselling Therapy of Alberta (ACTA) who are registered as counselling therapists in ACTA meet the definition of “practitioner” for purposes of the goods and services tax/harmonized sales tax (GST/HST) exemption for supplies of psychotherapy services.

CRA’s review of ACTA members was more complex because ACTA was preparing to become the regulatory college and registered counselling therapists who a) meet the current CRPO registration requirements and have completed a Master’s degree in counselling, as well as members who b) meet the CRPO’s initial grandparenting requirements, which were in force from 2015 to 2017 based on portfolios of evidence for substantial equivalency and do not have a master’s degree in counselling. 

The CRA made two separate rulings for ACTA’s registered Counselling Therapists working in provinces that do not yet regulate the profession of Counselling Therapist/Psychotherapist based on CRPO’s review.

CRPO Review of ACTA’s Registered Counselling Therapists

“When CRPO was a new regulator (2015-2017), it had a grandparenting registration route to transition previously unregulated practitioners into the College. ACTA’s registration requirements are similar to CRPO’s initial grandparenting registration requirements. Some ACTA members have a master’s degree that is equivalent to CRPO’s post-grandparenting education requirement.”


CRA GST/HST Rulings for ACTA Counselling Therapists

January 14, 2025

1.CRA Exempt Practitioner:

ACTA Registered Counselling Therapist who completed a master's degree in counselling equivalent to CRPO’s post-grandparenting education requirement.

  • Must immediately stop charging GST on psychotherapy/counselling therapy services.

*If you have a master’s degree with an educational focus (courses, and training) on counselling and/or psychotherapy, you meet the requirements and must stop charging GST on psychotherapy/counselling services. On the other hand, if you took a master’s degree in a different profession (i.e. leadership or management) and your psychotherapy/counselling training is at an undergraduate level, then you are not eligible to stop charging GST until you are officially regulated under the Health Professions Act as a counselling therapist or psychotherapist.

2. CRA Non-Exempt Practitioner:

ACTA Registered Counselling Therapists without a master’s degree in counselling who meet ACTA’s and CRPO’s initial grandparenting requirements, which were in force from 2015 to 2017 based on portfolios of evidence for substantial equivalency and do not have a master’s degree in counselling.

  • Must continue to charge GST on all services until they are officially regulated under the Health Professions Act.

* The GST/HST exemption legislation is for the current registration standards of regulated psychotherapists/counselling therapists. Since the CRPO’s grandparenting route has closed, this ruling could not include grandparenting criteria. However, once grandparented counselling therapists /psychotherapists become regulated professionals under the Alberta statute, they will meet the CRA’s GST/HST exemption criteria.


Urgency to Complete Regulation of Counselling Therapy in Alberta

ACTA is once more reminded of the pressing need to finalize regulation under the HPA for professionals who must be transitioned into the future regulatory college through a grandparenting process. We remain committed to supporting the advancement of regulation and advocating for the completion of this regulation ensuring it includes a robust and fair grandparenting framework to support Alberta’s vital workforce. 

What does this mean for ACTA Counselling Therapists with a Master’s Degree in Counselling?

  1. Stop charging GST on psychotherapy services, which include clinical assessments, counselling for individuals, groups, couples or families, psychotherapeutic interventions, clinical supervision or consultation, and clinical reports.

  2. You may need to continue charging GST on services not eligible for GST exemption. It is recommended that you consult your accountant about whether any of your services are non-exempt and still subject to GST (for example, teaching). Your accountant can consider other factors when advising you whether you need to remain registered for GST. They can also advise on the implications for input tax credits for your business.


    *It is important to note that, generally, to be exempt from GST/HST, services provided by health care professionals must be made for the purpose of the protection, maintenance or restoration of the health of a person or for palliative care (with some noted exceptions). A full discussion is available in the GST/HST Policy Statement here “Qualifying Health Care Supplies and the Application of the GST/HST to Supplies of Medical Examinations, Assessments, Reports and Certificates/”

  3. Communicate these changes to your clients! This is an exciting update that is a direct benefit to clients. They will no longer have to pay GST on psychotherapy services, which can make these services more accessible to those in need.

  4. Renew your ACTA Membership; this CRA exemption ruling is for ACTA’s active CT registrants with a master of counselling degree. ACTA will provide you with a letter if you are being audited. Otherwise, no letter is required.

ACTA will continue to meet CRA’s requirements to help facilitate GST Exemption in unregulated provinces.

  1. ACTA will ensure registration criteria are consistently maintained with CRPO’s registration criteria and CRA’s guidelines;

  2. ACTA will maintain an updated letter of registration review from CRPO; and

  3. ACTA will maintain a list accessible to the CRA of active ACTA members who are registered as counselling therapists and who have completed the CRPO’s post-grandparenting education requirements (e.g., a postgraduate Master's degree in Counselling).

ACTA Disclaimer

Each practitioner and business owner is responsible for understanding and complying with the laws relevant to their business operations. Please note that ACTA does not offer tax advice. We strongly recommend consulting a qualified accountant, lawyer, or the CRA for professional guidance to determine your GST account and requirements with CRA. 

ACTA’s Dedication to Public Interest

ACTA remains steadfast in its commitment to working in the best interest of the public by facilitating CRA’s ruling and GST exemption on psychotherapy services and continuing to advance regulation under the HPA. This ruling reflects the hard work and dedication invested over the past several years by the profession,  ACTA Board, and staff. We value your trust and will continue to uphold the highest standards in our work.