Citation: 2007TCC632
Date: 20071018
Docket: 2007-565(IT)I
BETWEEN:
MAREK D. TARKOWSKI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Webb J.
[1] The Appellant
claimed a tuition credit in relation to tuition fees that were paid in 2003 and
2004 for music lessons that were taken by the Appellant’s son. The credits were
transferred to the Appellant under section 118.9 of the Income Tax Act
(“Act”).
[2] The issue in this
case is whether the tuition fees that were paid were in relation to a
post-secondary school level course taken at an educational institution that
provided courses at this level.
[3] Subsection 118.5(1)
of the Act provides in part as follows:
(1) For the purpose of computing the tax payable under this Part
by an individual for a taxation year, there may be deducted,
(a) where the
individual was during the year a student enrolled at an educational institution in Canada that is
(i) a university, college or other
educational institution providing courses at a post-secondary school level ...
an amount equal to the product obtained when the appropriate percentage
for the year is multiplied by the amount of any fees for the individual’s
tuition paid in respect of the year to the educational institution if the total
of those fees exceeds $100, except to the extent that those fees
(ii.1) are paid to an educational institution
described in subparagraph (i) in respect of courses that are not at the
post-secondary school level,
[4] Therefore in order
for the Appellant’s son to claim the tuition credit (and thereby create a
tuition credit that could be transferred to the Appellant) the Appellant’s son
would have to have been enrolled at an educational institution in Canada that
was providing courses at a post-secondary level and the amounts paid would have
to have been paid for these courses.
[5] The Appellant’s son
was taking music lessons at the Mississauga School of Music. In 2003 the
lessons that the son was taking were at the Grade 3 Theory level and in 2004
they were at the Grade 9 Piano level and at the Grades 3 and 4 Harmony level.
Grades 3 and 4 Harmony courses are at a higher level than the Grade 8 Piano and
Grade 2 Theory courses. The levels are established by the Royal Conservatory of
Music. The Appellant’s son received a Grade 12 credit in music from his
high school, Michael Power St. Joseph High School, as a result of his having completed Grade 8 Piano
performance and Grade 2 Theory.
[6] The Respondent
raised two main issues in relation to this matter. The Respondent raised the
issue of whether this course was at the post-secondary school level and whether
the Mississauga School of Music was an
educational institution for the purposes of subsection 118.5(1) of the Act.
[7] In paragraph 12 of
the Reply it is stated that:
During the 2003 and 2004 taxation years the Son was a student at
Mississauga School of Music (“MSM”).
[8] The Son referred to
above is Mateusz Tarkowski who is the son of the Appellant.
[9] Therefore since one
of the assumptions was that Mateusz Tarkowski was a student at Mississauga
School of Music I find that he was enrolled as a student at the Mississauga
School of Music.
[10] The Mississauga
School of Music was a school that was teaching the courses referred to above. In
Hillman v. The Queen, 2006 TCC 578 Rip J. (as he then was) made the
following comments:
[12] Although I have already
determined that BAR/BRI is not an educational institution in Canada, it
may serve some purpose to consider whether it is an education institution. In
Friedland v. R.,
Rowe D.J.T.C.C., after noting that there does not appear to be a universal
definition of "educational institution", attempted to establish the
parameters of the definition as it pertains to the Act:
The
Oxford English Dictionary defines "education" as:
3. the systematic instruction, schooling or training
given to the young in preparation for the work of life; by extension similar
instruction or training obtained in adult age. Also, the whole course of
scholastic instruction which a person has received. Often with limiting words
denoting the nature or the predominant subject of the instruction or kind of
life for which it prepares, as classical, legal, medical, technical,
commercial, art education.
and
"institution" as:
7. an establishment, organization, or association,
instituted for the promotion of some object, esp. one of public or general
utility, religious, charitable, educational, etc., e.g. a church, school,
college, hospital, asylum, reformatory, mission or the like; [...] The name is
often popularly applied to the building of the appropriated to the work of a
benevolent or educational institution.
[13] Black's
Law Dictionary, 6th Edition, defines "educational institution" as
follows:
A school, seminary, college, university, or other
educational establishment, not necessarily a chartered institution. As used in
zoning ordinance, the term may include not only buildings, but also all grounds
necessary for the accomplishment of the full scope of educational instruction,
including those things essential to mental, moral, and physical development.
[11] Mateusz Tarkowski was taking Grade 3 and Grade 4
Harmony and Grade 9 Piano lessons at the Mississauga School of Music at
the school’s premises. He was tutored at the school by a teacher.
[12] Therefore it seems
clear that the Mississauga School of Music was an educational institution as it
was providing Mateusz Tarkowski with an education in music. The method of
teaching was by tutoring but this is simply the method by which the courses
were taught. The fact that the Mississauga School of Music itself did not have
examinations did not mean that they were not providing him with an education or
that he was not taking courses.
[13] In the Canadian
Oxford Dictionary, second edition, “course” is defined as “a series of
lectures, lessons, etc., in a particular subject”. Courses can be taught that
do not have examinations at the end. There can still be “systematic
instruction, schooling or training”, without examinations. As a result I find
that the Mississauga School of Music is an educational institution.
[14] The next issue is
whether or not the courses that Mateusz Tarkowski was taking were courses
at a post-secondary school level. Mateusz Tarkowski did not graduate from high
school until after 2004. Courses at the post‑secondary school level would
be courses that would be at a higher level than would be taught at a secondary
school. It is the status of the course that is being taken that determines
whether or not it is a post-secondary level course and not the status of the
individual taking the course. Since Mateusz Tarkowski received a Grade 12
high school credit for Grade 8 Piano and Grade 2 Theory and since Grade 12
high school was his last year of high school, any courses taken at a higher
level of music and theory than those for which he received his Grade 12
credit must be at a post-secondary school level. The Grade 9 Piano and Grades 3
and 4 Harmony courses must have been post-secondary courses as a Grade 12 high
school credit was a prerequisite to taking these courses. Music courses are
courses that are taught at universities. In Setchell v. The Queen, 2006 TCC 37,
[2006] 2 C.T.C. 2259, 2006 DTC 2279 Woods J. noted that:
the SAP courses did not require completion of secondary school as a
requirement.
[15] In this case however
the Grade 9 Piano and Grades 3 and 4 Harmony courses that
Mateusz Tarkowski was taking did require the completion of the secondary
school level of music. Since these courses required the completion of the high
school level music courses these courses were at the post-secondary school
level. As a result I find that the Mississauga School of Music was providing
courses at the post-secondary school level and that the amounts in issue that
were paid for tuition for 2003 and 2004 were paid for tuition for post‑secondary
school level courses.
[16] Counsel for the
Respondent had also raised the issue of the age of Mateusz Tarkowski as he
was born in 1989 and therefore would have been 14 ‑ 15 years
old in 2003 and 2004. However, as a result of subparagraph 118.5(1)(a)(ii.2)
of the Act, the age of the person taking the course is only relevant for
individuals taking courses described in subparagraph 118.5(1)(a)(ii) of
the Act. The age of the person taking the course is not relevant in
relation to individuals taking courses described in subparagraph 118.5(1)(a)(i)
of the Act, which are the courses that are the subject of this appeal.
[17] The appeal is
allowed and the reassessments are vacated. The Appellant is entitled to his
costs as determined in accordance with the Tax Court of Canada Rules
(Informal Procedure).
Signed at Halifax,
Nova Scotia, this 18th day of October 2007.
“Wyman W. Webb”
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