Principal Issues: 1. Does the reduction of the amount of tuition fees paid for children of a teacher of a private school represent a taxable benefit. 2. Salary is foregone in lieu of reduced tuition. Whether the teacher is entitled to a charitable donation tax credit for the foregone salary. 3. Reduced tuition is levied because of the teacher's financial situation. Whether the teacher should be treated in the same manner as other families who receive reduced tuition and are not taxed on the saving.
Position: 1. Yes. 2. Question of fact. 3. Yes.
Reasons: 1. ITA 6(1)(a). 2. The amount of salary foregone would not be considered a charitable donation unless it was included in total employment income on a T4, and then only if it otherwise qualified as a charitable donation. 3. On the basis that the reduced tuition is received because of the teacher's financial situation and not because of the teacher's employment, it should be treated the same for income tax purposes as it is for the other families.