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Citation:2005TCC138
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Date:20050218
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Docket: 2004-3004(IT)I
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BETWEEN:
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GEOFFREY DEAN,
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Appellant,
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And
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
Beaubier, J.
[1] This appeal pursuant to the
Informal Procedure was heard at Calgary, Alberta, on February 10,
2005. The Appellant was the only witness.
[2] Paragraphs 2 to 9 inclusive of the
Reply to the Notice of Appeal set out the particulars in dispute.
They read:
2. In
computing his tax liability for the 2002 Taxation Year, the
Appellant claimed, in the computation of non-refundable tax
credits and tax payable, the amount of $28,525 as a tuition
credit and the amount of $2,000 as an education credit in respect
of a course taken by the Appellant at the Nelson Marlborough
Institute of Technology in New Zealand (hereinafter
"Nelson").
3. The 2002
Taxation Year income tax return was initially assessed on June 5,
2003.
4. In
assessing the Appellant for the 2002 Taxation Year, the Minister
disallowed the tuition credit and the education credit claimed by
the Appellant. The Minister considered that:
(a) the Appellant
was not in attendance at a university outside of Canada in a
course leading to a degree and therefore not entitled to the
tuition credit; and
(b) the Appellant
was not enrolled in a qualifying educational program as a
full-time student at a designated educational institution and
therefore not entitled to the education tax credit.
5. The
Appellant filed a Notice of Objection to the assessment,
postmarked July 17, 2003.
6.
The Minister confirmed the assessment by means of a Notification
of Confirmation dated April 28, 2004.
7.
In so assessing the Appellant's 2002 Taxation Year and in
confirming the assessment, the Minister relied on the same facts
as follows:
(a) the Appellant
attended Nelson as a full-time student in the 2002 Taxation
Year;
(b) the Appellant
was enrolled in a course at Nelson of greater than 13 consecutive
weeks in duration;
(c) the Appellant
was enrolled in at Nelson to obtain his commercial helicopter
license;
(d) Nelson is not a
university;
(e) Nelson is not a
degree-granting institution; and
(f) the
Appellant was not enrolled in a course leading to a degree issued
by Nelson in the 2002 Taxation Year.
B.
ISSUES TO BE DECIDED
8. The issue
is whether the Appellant is entitled to claim the tuition credit
and education credit in the computation of his non-refundable tax
credits and tax payable in the 2002 Taxation year.
C. STATUTORY
PROVISIONS, GROUNDS RELIED ON
ANDRELIEF SOUGHT
9. He relies
on sections 118.5 and 118.6 and subsection 248(1) of the
Income Tax Act, R.S.C. 1985, c. 1 (5th Supp)
(the "Act") as amended for the 2002 Taxation Year.
[3] Assumptions (a) to (c) in
paragraph 7 are correct. However Nelson does grant a degree:
Bachelor of Commerce. The courses the Appellant took in 2002 -
2003 do lead to that degree if the Appellant elects to apply them
to credits for that degree, (Exhibit A-1, Programme Regulations,
Para. 3.14.3). (e) and (f) are wrong because Nelson granted a
degree at that time and the Appellant was enrolled in a course
leading to a degree at Nelson.
[4] The Appellant did not receive his
Diploma in Aviation Science (Helicopter) or his Bachelor of
Commerce, which his courses lead to. Rather, when he had
sufficient courses and obtained his commercial helicopter pilot's
licence, he quit and got a job as a helicopter pilot.
[5] He got a job as a helicopter pilot
at Rocky Mountain House, Alberta, at which he works 7 months each
year. He works in the oil fields for the remaining 5 months per
year. He is now 24 years old.
[6] Paragraph 118.5(1)(b) of
the Income Tax Act sets out the criteria which the
Appellant must satisfy to succeed in part. It reads:
118.5(1) Tuition Credit - For the purpose
of computing the tax payable under this Part by an individual for
a taxation year, there may be deducted, ...
(b) [university outside Canada] - where the
individual was during the year a student in full-time attendance
at a university outside Canada in a course leading to a degree,
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
university, except any such fees
(i) paid in
respect of a course of less than 13 consecutive weeks
duration,
(ii) paid on the
individual's behalf by the individual's employer to the extent
that the amount of the fees is not included in computing the
individual's income, or
(iii) paid on the
individual's behalf by the employer of the individual's parent,
to the extent that the amount of the fees is not included in
computing the income of the parent by reason of subparagraph
6(1)(b)(ix); and ...
[7] Thus, the remaining question which
the Appellant must satisfy to succeed is whether Nelson was a
university.
[8] Mogan, J. dealt with this problem
in Gilbert v. R, 1998 T.C.J. No. 1091 and [1999] 2 C.T.C.
2127. At paragraph 14 he stated:
The word "university" is not defined in the Act, but
the Respondent has provided me with three dictionary definitions
of the word, all of which have as a condition the granting of a
degree. The Dictionary of Canadian Law defines university as
follows:
The chief distinguishing characteristic between a university
and other institutions of learning is the power and authority
possessed by an institution of learning to grant titles or
degrees.
In Webster's Third New International Dictionary (an
American publication), the word "university" is defined
as:
A body of persons gathered at a particular place for the
disseminating and assimilating of knowledge in advanced fields of
study; an institution of higher learning providing facilities for
teaching and research and authorized to grant academic
degrees.
And lastly, in Black's Law Dictionary, it is described
as:
An institution of higher learning, consisting of an assemblage
of colleges united under one corporate organization and
government, affording instruction in the arts and sciences and
the learned professions, and conferring degrees.
[9] The Respondent filed an affidavit
by one of its officer's indicating that various publications do
not list Nelson as a designated educational institution for the
purpose of Section 118.6. However Nelson's own literature filed
by the Appellant in Exhibit A-1 states that it grants the
Bachelor of Commerce degree and that the Appellant's courses are
creditable towards the Bachelor of Commerce. The Court accepts
that literature supported by the Appellant's testimony as
evidence of the truth that at the time in question the Appellant
was in full-time attendance at a university outside Canada in a
course leading to a degree.
[10] On the basis of the affidavit filed by
the Respondent, the Appellant's claim under Section 118.6 is
denied because Nelson was not a designated educational
institution pursuant to the Income Tax Act during the
period in question.
[11] However, it was a university and the
Appellant's claim under 118.5(1)(b) is allowed and this
matter is referred back to the Minister of National Revenue for
reconsideration and reassessment accordingly. The Appellant is
granted his disbursements incurred in prosecuting this appeal
including those for postage, copying, phone calls and travel from
Rocky Mountain House to Calgary for the hearing; they are fixed
at $350.
Signed at Saskatoon, Saskatchewan this 18th day of
February 2005.
Beaubier, J.
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