Changes To Tax Treatment On Some RCM Coins That Have Been Modified

Thank you for the useful, and quite thorough information.

This will only be a very minor annoyance , compared to the TAXATION coming down the road.
With a 300 Billion Dollar Deficit and more on the way , Canada could easily have a 20 per cent
VAT in a few years . Watch ......

Unfortunately it does not seem to be the case with other provinces. If a customer live in a HST province like Ontario, coins that are subject to HST in Ontario will be subject to HST no matter what province the dealer is in.

For example, the Bill Reid Special Wrap rolls are subject to HST in Ontario. If bought in Manitoba, at Gatewest Coins, Ontario customers still have to pay HST.

The only provinces where coin collectors can save some taxes is provinces is where there is a split in PST and GST. That mean BC, Saskatchewan and Manitoba. Quebec I am not sure of because they have something called QST.

So for BC customers they would have to pay only 5% GST and not 7% PST if bought in other provinces. Under the previous tax regulations, BC customers were both GST and PST tax exempt if bought out of province.

This is not strictly true for BC. In BC Provincial Sales Tax is charged when the selling price exceeds the bullion value of the coin. This means that a 1oz silver maple with a face value of $5 does not trigger PST if sold at the current value (as of today approx $43.50 CDN). The intent is to differentiate between investment instruments and collectibles. As we know, certain bullion products carry premiums significantly higher than bullion value... certain privy marks, Australian Swans, certain Chinese Pandas etc. I have never been able to determine where the line is drawn but usually, if it is struck in "Proof" or "Specimen" then you can expect to pay PST.



Regarding paying PST. Generally speaking the seller has to have a presence in a province (or at the very least a provincial tax number) to be required to collect and submit taxes in a given province. So for BC, Gatewest - based in Manitoba and Colonial Acres - based in Ontario generally only collect the federal tax (GST). The odd thing about provinces that have given up their Provincial tax in favour of the Provincial/Federal Harmonized sales tax or HST have to pay the full tax as it is considered a federally collected tax and all sellers can use their Federal Tax number to collect & submit. In BC, to date, we would pay 7% on NCLT from the mint but not the 5% GST whereas we would pay neither when purchasing from Gatewest or Colonial (I have bought from both). Note were Gatewest/Albern or Colonial to open a branch in BC, then they would be required to charge BC PST on sales even from Manitoba & Ontario.

This may be a good thing for the future direction of the Mint. If they were using the financial services loophole to sell trinkets as currency then maybe they can start a side business manufacturing carousels, murano glass or diamond encrusted articles etc. and have the core get back to coins. It could allow a re-invigoration in the art of coin design and manufacture. It will be interesting to see if all of the painting & plating (Bill Reid Silver ounce or the treatments the "big coin" series or annual SD sets have been subject to over the past few years) is sufficient to trigger the GST. If so, given RCM margins, it could trigger a further decline in sales. I, for one, won't mourn the loss of murano glass or selective paint/plate on otherwise decent coins... and if it gets the RCM to stop their current practice of applying decals to silver coins (Bill Reid Silver Oz) then I am all for it.



When Revenue Canada releases a ruling it applies immediately to all sales made from that point on... So I would answer your question as Yes!. The exemption for subscriptions can only be because the "sale" occurred before the ruling was delivered.

As to the COVID sourced tax implications for the future. I agree that we are in for a new reality for the next 10-20 years. The supplementary payments made to Canadians over the last 6 months and presumably for the next 6+ months will need to be paid for and the most recent example of massive and un-funded government spending were the 2 world wars of 75 and 100+ years ago. If you want to speculate on taxation levels for the future... look to the tax practices of the late 1940's through late 1960's. The government will need to balance the need to raise revenue via taxation against the suppression that various taxation models have on economic growth against the expectation that Canadians have for continued government funding of certain programs. It is going to be a rough decade; NCLT is truly an un-necessary commodity... It is a hobby and some would say a luxury. It is not a financial instrument (That is bullion) nor is it a basic necessity of life (Food/housing etc.) As such, luxuries are often targeted by governments for higher tax levels to generate higher revenues from the disposable income of the citizenry. Just look at the tax rate applied to passenger vehicle sales in BC... There is a sliding scale 7% PST for purchases < $55K scaling to 20% for sales > $150K. There are a few interesting artifacts to this... Ever wonder why there are so few Ford F250's in BC... Because the 3/4 ton truck is deemed a passenger/private vehicle and hits the 10% Provincial tax rate. The F350 as a 1 ton truck is a non-passenger/work vehicle and qualifies for the 7% provincial tax rate. Saving $2-3K in tax can sure allow you to add options.

In the future for BC, nothing is changed for .9999 pure silver/gold coins that are "unadorned": 7% PST and no 5% GST from the RCM. With the changes to "adorned" coins, BC customers will pay 7% PST and 5% GST for total of 12%.
BC customers will only pay 5% GST for "adorned" coin if purchased from out of province dealers.

In short, BC customers will either save 5% or 7%, depending on the type of coin if bought from an out of province dealer rather than the RCM.

Correct.




There is no 5% GST on .9999 Pure Silver/Gold coins bought from either the RCM or any out of province dealer under the old tax regulation. And there is no change in the new tax regulation for.9999 Pure Silver/Gold sold from the RCM or any province EXCEPT for adorned coins or if the silver/gold content drops below .9999.

I already ordered a set of 2020 colorized proof coins. I think it was a couple months ago and they are expected delivery in October. I wonder if I'll get a surprise extra tax charge on that?