Toronto, Ontario
--- Upon commencing on Friday, March 28, 2014
at 3:00 p.m.
[This version has been edited by the judge
for style and clarity.]
[1] JUSTICE JORRÉ: Good
afternoon.
[2] I will now give my reasons
for judgment in the appeal of the Ontario College of Teachers.
[3] The College appeals from an
assessment of GST in relation to the calendar month of August 2005.
[4] The issue turns on the
meaning of paragraph 20(d) of Part VI of Schedule V of the Excise Tax
Act. It reads:
(d) [A]
supply of a service of providing information in respect of, or any certificate
or other document evidencing, the vital statistics, residency, citizenship or
right to vote of any person, the registration of any person for any service
provided by the government or any other status of any person.
[5] The French version of the paragraph
reads as follows:
d) [L]es services
de renseignements sur les statistiques démographiques, la résidence, la
citoyenneté ou le droit de vote des personnes, leur inscription à un service
offert par le gouvernement ou toutes autres données les concernant, ou les
certificats ou autres documents attestant ces données.
[6] I note that the legislation
was amended after the period relevant to this appeal.
[7] The parties have narrowed the
issues to the following:
(a) Are
the supplies made in consideration of what is referred to as the “application
fee” supplies that fall within the paragraph I have just read?
(b) Are
the supplies made in consideration of what are referred to as the “evaluation
fee” supplies that fall within that paragraph?
[8] If the answer is yes, the
supplies are exempt supplies and the Minister will be successful. If the answer
is no, the appellant will be successful.
[9] A large part of the evidence
went in by agreement. There are no credibility issues; there are no quantum
issues.
[10] The parties filed a Joint
Agreed Statement of Facts. I will paraphrase much of it.
[11] The parties
agree on the following:
1. In Canada teaching is primarily a
regulated profession that is controlled by each provincial government. In most
provinces the provincial government is the governing body. In some provinces,
such as Ontario, a separate body is established by the provincial government.
2. The
Ontario College of Teachers is a non-profit organization established by the
Ontario Legislature, pursuant to legislation.
3. The
College is a registrant as defined in subsection 123(1) of the Excise Tax
Act.
4. The
College has express statutory objectives under the Ontario College of
Teachers Act; those objectives include: regulating the profession and
governing its members; establishing and maintaining qualifications for
membership; accrediting professional teacher education programs offered by
post-secondary educational institutions; accrediting ongoing education programs
for teachers; issuing amending, suspending, revoking and reinstating
certificates of qualification and registration; providing for the ongoing
education of members; establishing and enforcing professional standards and
ethical standards applicable to members; receiving and investigating complaints
against members and dealing with discipline and fitness to practice issues, and
communicating with the public on behalf of members.
5. The
Education Act of Ontario establishes a general requirement that an individual
must be a member of the College to be employed to teach in a public funded
elementary or secondary school.
6. The
Ontario College of Teachers Act provides that an individual holding both
a certificate of qualification and a certificate of registration from the
College is a member of the College.
7. For
the 2001 through 2005 period, the regulations in force provide for classes of
certificates of qualification and registration to include a certificate of
registration and a certificate of qualification. The regulations also provided
the requirements for issuing such certificates.
8. The
certificate of registration was a document that confirmed that the individual met
the requirements for admission to the College as a member, and the individuals
name had been entered on the College’s register of members.
9. The
certificate of qualification was a document that confirmed the individual’s
teaching credentials, including any specialized qualifications, as well as the
individual’s status as a member of the College in good standing for the
calendar year covered by the certificate of qualification.
10. The
certificate of registration was a one-time document issued only when the
individual was admitted as a member, whereas the certificate of qualification
was issued at the time of registration with the College and annually
thereafter.
11. Annual
certificates would be updated to include any new additional specialized qualifications
obtained during the proceeding year. The annual certificate of qualification is
issued so long as the individual remains a member in good standing of the
College.
12. For
the purpose of pursuing and maintaining a teaching position in Ontario, the certificate of qualification provided documentary proof that the individual
was a member of the College in good standing and that the individual had the
various teaching qualifications detailed in the certificate.
13. The
Ontario College of Teachers Act authorizes the counsel of the College to
make by-laws relating to the administration and domestic affairs of the College.
14. Those
by-laws set out, among other things, the fees for various supplies made by the
College.
15. An
individual seeking to become a member of the College must file an application
for registration with the College.
16. The
application process is undertaken by specialized units within the College’s
membership services division. The College staff receive various documents submitted
by the applicants and by academic institutions on behalf of the applicants,
assess the documents for authenticity and completeness, evaluate the applicant’s
credentials and communicate the success or failure of the application by letter
to the applicant.
17. On
occasion, the College would provide ongoing feedback to applicants and academic
institutions on the content and status of the documents submitted.
18. The
review of the information generally resulted in the issue of a certificate or
an explanatory letter.
19. During
the application process certain documents are submitted to the College by the applicant,
including but not limited to the application, proof of identity, proof of name
change and a criminal record check. Other documents are submitted to the
College directly by the issuing institution such as transcripts or verification
letters.
20. In
the course of processing an application, the College staff might also contact
an educational institution that grants a degree to the applicant if there are
questions about the applicant’s credentials from the institution.
21. Under
the by-law, all individuals submitting an application for registration with the
College pay an application fee to the College to consider the application. For
applicants trained outside of Ontario, the by-laws required the applicant to
pay an additional amount as an evaluation fee.
22. The
College imposes the evaluation fee to determine whether the individual’s
non-Ontario teacher education program meets the same academic, professional or
language proficiency requirements that Ontario teacher education programs must
satisfy.
23. If
an individual’s application is denied by the College or the individual is
unable to or does not complete required steps in the application process, the
College generally does not refund the application fee, or if applicable, the
evaluation fee that was submitted with the application. In such circumstances,
the College would communicate the failure of the application by letter to the applicant.
24. The
by-laws require members to pay an annual membership fee to the College.
25. The
College has treated the annual membership fee as an exempt supply for the
purposes of the Excise Tax Act. The College has not made an election to
treat the annual membership fees as subject to goods and services tax under
that section.
[12] Prior to the period in issue,
the College collected and remitted GST in respect of the two supplies in issue
in this matter: the supplies in consideration (i) of the application fees and (ii)
of the evaluation fees. However, the College did not make any input tax credit
claims in relation to those supplies.
[13] In its return for the period
in issue, the appellant claimed input tax credits in relation, among other
things, to the supplies in issue. The Minister denied those credits, resulting
in this appeal.
[14] Ms. Iona Mitchell testified.
She is the manager of the membership records division of the Ontario College of
Teachers. Certain other exhibits were also tendered.
[15] Ms. Mitchell confirmed much
of what is in the Agreed Statement.
[16] She testified that — and her testimony overlaps in large measure
with the Agreed Statement — anyone who wishes to teach in a
public school in Ontario must be a member of the College.
[17] The certificate of registration
attests to the individual membership in the College while the certificate of qualification
confirms the individual’s teaching credentials and any other specialized
training as well as the fact that the person is in good standing with the
College for the period covered by the certificate of qualification.
[18] To join the College and get
the certificate of registration, as well as the individual’s first certificate
of qualification, an individual must go through a process whereby they make an
application to the College.
[19] The College reviews the
candidacy to determine if the individual is qualified.
[20] At the end of the process the
successful individual will receive their certificate of registration, as well
as their first certificate of qualification, subject only to the individuals
paying the annual membership fee if they have not already done so at the time
that they filed the application fee.
[21] In the period in question,
persons applying from Ontario would pay the annual fee together with the
application fee, as a matter of administrative convenience.
[22] That was not the case for
individuals from outside Ontario who would normally pay the annual fee after
they had been accepted, if they were accepted.
[23] While the process is somewhat
different for applicants trained as teachers in Ontario and applicants trained
outside of Ontario, the goal of the College is the same: to establish whether a
candidate meets the criteria necessary to become a member.
[24] The difference comes from the
fact that in Ontario, with respect to the teacher training component of the
requirements, the College accredits teacher training programs in Ontario and therefore it is not necessary to evaluate specifically the teacher training
program followed by a candidate who took his or her teacher training in Ontario.
[25] On the other hand, for
candidates who took their training outside of Ontario, the College has to
evaluate individually the particular training taken by the candidate to see if
it meets the requirements of the College. In addition, in the case of
candidates from outside of Ontario, depending on where the candidates took
their teacher training, the College may need to evaluate the candidates’
language proficiency in English or in French.
[26] All candidates, wherever they
took their teacher training, must meet certain academic requirements, which are
verified by the College.
[27] There are various documents
that all candidates must supply and which are reviewed. These include proof of
identity, proof of name change if applicable, a criminal records check and, for
individuals who are not citizens, proof that they have the right to work in Canada. Candidates also submit academic transcripts.
[28] Some documents are sent to
the College by the candidate, others, such as transcripts, are sent by the
issuing institution to the College.
[29] Documents submitted are
evaluated to determine if they are authentic and acceptable and the candidates
are evaluated to determine if they meet the requirements.
[30] This is done by the
membership services division, which has between 50 and 60 employees and three
branches.
[31] First, there is the client
service unit, which deals with inquiries by applicants or potential applicants,
whatever the means by which they inquire. This unit has approximately 15 employees.
[32] Secondly, there is the
membership records unit, which evaluates applicants, as I understood it, who
have Ontario teacher training. This unit has about 20 plus employees.
[33] The third unit is the evaluation
services unit, which evaluates persons who had their teacher training outside
of Ontario. This third unit has about 15 employees.
[34] In the period in issue, all
applicants paid $125 including GST for what is referred to as the “application
fee”. This fee is set in section 22.01 of the College by-laws.
[35] Applicants who took their
teacher training outside of Ontario paid an additional fee of $225. The $225
includes GST and this is referred to as the “evaluation fee”. It is set in
section 22.02 of the College by-laws.
[36] Once candidates were
accepted, if they had done their teacher training in Ontario normally they
would have paid their annual fee at the same time as the application fee in
issue. Consequently, they would, upon acceptance, be sent a welcome package
which would include both their certificate of registration and their certificate
of qualification.
[37] The successful candidates
from outside of Ontario had to first send their annual fee, if they had not
already done so, and would then receive their certificate of registration and
their certificate of qualification.
[38] Those candidates who were
unsuccessful would receive a letter notifying them of this and setting out
reasons for the decision.
[39] There is no doubt on the
evidence in front of me that there is a serious process for evaluating
candidates to ensure they meet the requirements of Ontario. I note that the
number of persons denied membership every year is not insignificant.
We see from pages 1 and 2 of
Exhibit A-4 that in 2005 some 660 people were denied membership. This is about 5% of
the number admitted to the College in that year.
[40] The question is one of
statutory interpretation.
[41] I find that it helps to
analyse the provision if one sets the paragraph in issue out visually in a
slightly different way as I have done below:
A supply of a service of providing
(a) information
in respect of
or
(b) [of]
any certificate or other document evidencing,
[the following:]
(i) the
vital statistics,
(ii) residency,
(iii)
citizenship or right to vote of any person,
(iv) the
registration of any person for any service provided by the government or
(v) any
other status of any person.
[42] I have added the words “the
following” in square brackets. I also put the “of” after (b) in square brackets.
[43] The appellant made a number
of arguments, all of which lead basically to two points.
[44] First, the appellant argues
that the supply in issue is:
1. neither
a supply of providing information as described in (a) as I have set out the paragraph,
2. nor
is it a supply of a certificate or other document evidencing something as set
out in (b) of the way I have set out the paragraph.
[45] I will deal first with the
argument that it is not a supply of information falling within (a). I will come
back later to the argument that it is not a certificate or other document
falling within (b).
[46] Secondly, the appellant
argues that the information evidenced in the certificate is not information
falling within any of the enumerated types of information in what I have
numbered as (i) to (iv). Clearly the information does not fall into those four
categories.
[47] Further, the appellant argues
that it is not information on any other status of a person as set out in what I
have numbered (v) above.
[48] As it will become apparent
below, it is not necessary for me to deal with a question of whether the status
of being or not a member of the College is “any other status” within the
meaning of (v) above, so I will not do so.
[49] However, I would observe that
the choice of words in the French text would, if I had to decide the matter,
make it important to consider the two language texts together. I would just
note that in the French text, the words used are “toutes autres données” literally
“any other information”. However, as I said, I do not need to deal with the
point.
[50] I will go back to the first
argument of the appellant and characterize what, on the evidence, is the nature
of the supplies made by the College.
[51] The College obtains
information, reviews that information, if necessary, asks for further
information if it finds what it received is not what is expected and it does an
evaluation to determine whether the candidate meets the necessary criteria to
be admitted as a member of the College.
[52] The substance of that is
evaluating and determining the person’s eligibility.
[53] It is true that, incidentally,
if a person is successful it will issue two certificates, the certificate of registration
and the initial certificate of qualification; subsequent certificates of qualification
are not part of this process. Equally incidentally, if the College determines
that someone is not qualified, they send a letter advising a person that they
have been unsuccessful.
[54] For the purpose of looking at
this question, I am going to assume, without deciding the question, that
whether or not a person is a member and has qualifications is a status within
the meaning of the paragraph in issue.
[55] I have great difficulty conceiving
that what is being done, evaluating someone to decide whether or not they can
be a member of the College and creating a document which records the outcome,
is something falling within a supply of providing information or of providing a
certificate or other document.
[56] What is being done is
evaluating a candidacy, and of course there is going to be some sort of record
of that, but that is not what the paragraph in issue exempts.
[57] On the face of the provision,
what the paragraph would cover is someone asking, for example, for a copy of
their birth certificate and paying a fee for it.
[58] Something which the College
does, which would fall within paragraph 20(d), is the kind of supply
that is contemplated in section 23.05 of the College by-laws. Under that by-law,
if someone loses their certificate of registration or certificate of qualification,
and wants a duplicate copy, then they have to pay a fee.
[59] That is the kind
of supply contemplated here, the duplicate copy is information in respect of
the fact that they are a member. It is also a certificate or other document
that evidences that they are a member.
[60] That is something very
different from the process of qualifying someone.
[61] All of which is to say I do
not see how the supplies made in consideration of the fees in question fall
within paragraph 20(d) of Part VI of Schedule V of the Excise Tax Act.
[62] Before I conclude, I would like
to note that I accept the respondent’s point that the words “in respect of” are
words of wide import. However, that goes to the question of what kind of
information is included in what I have numbered as (i) to (v) of the provision.
[63] I also agree that the word
“document” is widely defined because it is defined to include a record under
the Excise Tax Act and in turn a record is given an extremely wide
meaning in terms of paper or other formats that contain information
constituting the record.
[64] However, the fact that a very
wide variety of formats for containing information are covered does not convert
a supply of a process of evaluating someone’s qualifications into a supply of
evidence of status or of information regarding the status.
[65] For these reasons I am
satisfied that the supplies in question that are made in consideration of the
application and evaluation fees are not supplies that fall within paragraph 20(d)
and, as a result, the appeal will be allowed.
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