Our building contractor told us the CRA ruled that he (all builders) must charge us GST on invoices even on gst exempt items (insurance policy). Does that make sense?

We are paying for all materials/services invoices (thru the the builder's company) nvoices plus 16% mgmt fee. The invoice for the $8000 building insurance policy is gst free but he said he still has to collect 5% GST because builders are not GST exempt therefore they have to charge GST on usually exempt items.