Citation: 2010TCC88
Date: 20100216
Docket: 2009-1939(IT)I
BETWEEN:
CAMERON HUMPHREYS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Sheridan, J.
[1] The Appellant,
Cameron Humphreys, is appealing the disallowance of tuition credits and an
education and textbook credit under sections 118.5 and 118.6, respectively, of
the Income Tax Act. The Minister of National Revenue denied his claims
on the basis that Mr. Humphreys had not satisfied the criteria in those
provisions.
[2] In order to
succeed in his appeal, Mr. Humphreys has the onus of proving either that, under
paragraph 118.5(1)(b) of the Act, he was “… a student in full‑time
attendance at a university outside Canada in a course leading to a degree …”;
or that, under paragraph 118.5(1)(c), he … “resided throughout the year
in Canada near the boundary between Canada and the United States” and that he:
(i) was at any
time in the year a student enrolled at an educational institution in the United
States that is a university, college or other educational institution providing
courses at a post-secondary school level, and
(ii) commuted
to that educational institution in the United States,
[3] The same
criteria applies for claiming an education credit through the operation of
subsection 118.6(2) and paragraph 118.6(1)(c) of the Act.
[4] From September
2007 to April 2008, Mr. Humphreys was in full-time attendance at the Divers
Institute of Technology in Seattle, Washington. He achieved an academic grade average of
90.73% and later, received certification as an “Unrestricted
Surface Supplied Diver” from the Diver Certification Board of Canada.
[5] Turning,
first, to paragraph 118.5(1)(b) of the Act, Mr. Humphreys’
situation does not come within the criteria of that provision. While the Divers
Institute was “accredited” by certain organizations in Canada and the United States
in 2007, it did not offer courses “leading to a degree” as that term has been
interpreted in the jurisprudence[3]. The evidence is clear that the Divers Institute
issued only diplomas.
[6] I am persuaded,
however, that Mr. Humphreys has satisfied the requirements for tuition and
education credits under paragraphs 118.5(1)(c) and 118.6(1)(c),
respectively.
[7] In 2007, Mr.
Humphreys was resident in Brentwood Bay,
British Columbia. He was enrolled in and
commuted to the Divers Institute which meets the requirements of “an
educational institution providing courses at a post-secondary school level”
under paragraph 118.5(1)(c) and the definition of a “designated
educational institution” under paragraph 118.6(1)(c) of the Act.
The only question is whether Mr. Humphreys resided “near the boundary between Canada and the United States”
and “commuted” to the Divers Institute.
[8] The Minister’s
position is that it cannot be said that Mr. Humphreys resided “near” the
Canada-US border or that he “commuted” to Seattle because it took him more than
four hours to drive from Brentwood Bay to Seattle. In support of this contention, counsel for the
Respondent referred the Court to a decision of Dussault, J., Van de
Water v. Minister of National Revenue[4],
in which he held that a student who commuted from his home in Pierrefonds, a
suburb of Montreal located 80 kilometers from the Canada‑US border, to a
college in Plattsburg, New York did not reside “near” the boundary between the
two countries.
[9] In reaching this
conclusion, Dussault, J. first noted that the word “near” is not defined in the
Income Tax Act and then went on to consider its ordinary dictionary
meanings before turning to the definition in Black's Law Dictionary[5]:
…
Proximate;
close-by; about; adjacent; contiguous; abutting. The word as applied to space
is a relative term without positive or precise meaning, depending for its
signification on the subject-matter in relation to which it is used and the
circumstances under which it becomes necessary to apply it to surrounding
objects. Closely akin or related by blood; as, a near relative. Close to one's
interests and affections, etc; touching or affecting intimately, as one's near
affairs, friends. Not far distant in time, place or degree; not remote;
adjoining.
[10] Mr. Justice
Dussault then considered the purpose of paragraph 118.5(1)(c) as
follows:
Obviously, words are to be interpreted and given a meaning depending on
the subject matter and the context in which they are used. We are dealing here
with a specific relief granted by Parliament to individuals living in a border
town or a border zone. The relief is granted so that those individuals could
have access to educational institutions situated on the other side of the
border but perhaps less distant than the ones situated in Canada and this,
without being penalized vis-à-vis individuals attending institutions
situated in Canada to which relief is granted by paragraph 118.5(1)(a) of the
Act. By its very nature, paragraph 118.5(1)(c) is to be seen as an exception.
The adverb "near" should then be construed according to its
plain and natural meaning given the context in which it is used. Most of all,
it is not to be given a meaning not reasonably compatible with the object
sought. Applying it to the particular circumstances of the present case, I am
of the opinion that an individual residing some 75 to 80 kilometres from the U.S.
border is not residing "... near the boundary between Canada and the United
States ...". I do not think that the place of residence of the appellant,
namely Pierrefonds, Québec, qualifies as such a place of residence because it
lacks the element of proximity, contiguity or vicinity to the border zone that,
I feel, was contemplated in enacting that particular provision of the Act.
Having arrived to that conclusion, I can also draw some comfort from
the Act read as a whole. I would indicate here that a 40 kilometre test is used
to determine if an individual can claim moving expenses under section 62 of the
Act. The underlying assumption in that case, I suppose, is that the new place
of work is far enough from the old residence as to warrant the deduction of
moving expenses to the new residence: or, to put it in another way, is not near
enough.
[11] I do not read Van
de Water as standing for the proposition that any distance greater than 80
kilometers is, by definition, not “near” the boundary between Canada and the United States.
The word “near”, as noted in the Black’s definition, is “a relative
term”, the interpretation of which will depend on the particular circumstances
of each case. What may be “not near enough” in the confined spaces of urban Quebec may be
very “near” indeed in the watery expanses of the Pacific coast. It seems to me
that by choosing to use the word “near” in these provisions, rather than
specifying a particular distance, Parliament intended to recognize the great
diversity of Canada’s geography and demographics.
[12] To qualify for
the deduction under paragraphs 118.5(1)(c) and 118.6(1)(c), the
taxpayer must show that he resided “near” the boundary between Canada and the
United States and, by implication, that the educational institution is close
enough to be within commuting distance to his residence.
[13] In
the present case, there is no question that Seattle was within commuting distance for Mr. Humphreys
because that is, in fact, what he did through the 2007-08 academic year. As for
whether he resided “near” the international boundary, Mr. Humphreys’ weekly
commute from his residence to the Divers Institute in Seattle, Washington took
over four hours, a journey which included a ferry ride from Vancouver Island. Mr.
Humphreys represented himself in a very clear and well-organized manner but not
anticipating the applicability of these provisions, did not present any
evidence as to how far Brentwood Bay is from the boundary between Canada and the United States.
However, I take judicial notice of the fact that as the international boundary
snakes its way through the many islands in the Strait of Juan de Fuca, it runs,
relative to other communities in those waters, quite “near” Brentwood Bay.
Furthermore, as an itinerant judge whose jurisdiction spans the entire country,
I am well placed to know that there is not necessarily a direct correlation
between the time spent travelling between two points and their physical
proximity. Thus, when considered in the context of the vast northwest coast of North America, the
evidence supports the conclusion that Mr. Humphreys resided “near” the
Canada-United States border.
[14] The
appeal is allowed and the matter referred back to the Minister of National
Revenue for reconsideration and reassessment on the basis that Mr. Humphreys
is entitled to tuition and education credits, as claimed, in the 2007 taxation
year.
Signed at Montréal, Quebec, this 16th day of February, 2010.
“G. A. Sheridan”
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