Maximizing the Public Service Body Rebate for a Daycare

The client

A licensed, for-profit daycare centre in Ontario participating in CWELCC, operating out of a large leased commercial facility.

The challenge

The daycare provided exempt childcare services and did not charge HST to parents. The owner assumed they simply had to absorb the 13% HST paid on commercial rent, utilities, supplies, and facility maintenance as a sunk cost. With commercial rent at $15,000/month ($1,950 HST) and other expenses totalling $10,000/month ($1,300 HST), the daycare was losing nearly $40,000 a year to unrecoverable HST.

The solution

We identified that, as a facility licensed under the Child Care and Early Years Act, the business qualified for the Public Service Body Rebate — even as a for-profit corporation.

• Expense categorization: restructured bookkeeping to accurately track and isolate HST paid on all eligible facility and operating expenses
• Rebate application: prepared and filed Form GST66 for the current fiscal year, plus retroactive claims for the previous two years that the prior accountant had missed

The result

The PSB Rebate allowed the daycare to recover 82% of the provincial portion of HST paid on eligible expenses. We recovered over $25,000 in retroactive HST rebates for prior years — an immediate cash injection. Going forward, the daycare recovers approximately $12,500 annually through the PSB rebate, directly improving the bottom-line margin.