Docket: 2013-1263(IT)I
BETWEEN:
THILEEBAN KANDASAMY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal heard on common evidence with the
appeals of Collin Terpstra (2012‑4474(IT)I and 2013‑2385(IT)I),
Jenny Peih‑Chir Tsai (2013‑735(IT)I), Andrew Yadegari
(2013‑1509(IT)I), Thomas Havey (2013‑1793(IT)I, Hilary Myron
(2013‑2596(IT)I), Sassan Ghazan‑Shahi (2013‑2592(IT)I),
Bita Hashemi (2013‑2597(IT)I) and Brendon Trotter
(2012‑4621(IT)I and 2013‑89(IT)I),
on January 9 and 10, 2014, at Toronto, Ontario.
Before: The Honourable Gerald J. Rip, Chief
Justice
Appearances:
|
Counsel for the Appellant:
|
Steven Barrett
Derrick McIntosh
|
|
Counsel for the Respondent:
|
John Grant
Rishma Bhimji
|
____________________________________________________________________
JUDGMENT
The appeal from the reassessment made under
the Income Tax Act for the 2011 taxation year is allowed, with party and
party costs, and the matter is referred back to the Minister of National
Revenue for reconsideration and reassessment on the basis that the appellant is
entitled to claim the education tax credit and textbook tax credit.
Signed at Ottawa, Canada, this 17th day of February 2014.
"Gerald J. Rip"
Dockets: 2012-4474(IT)I
2013-2385(IT)I
BETWEEN:
COLLIN TERPSTRA,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeals heard on common evidence with the
appeals of Thileeban Kandasamy (2013‑1263(IT)I),
Jenny Peih‑Chir Tsai (2013‑735(IT)I), Andrew Yadegari
(2013‑1509(IT)I), Thomas Havey (2013‑1793(IT)I, Hilary Myron
(2013‑2596(IT)I), Sassan Ghazan‑Shahi (2013‑2592(IT)I),
Bita Hashemi (2013‑2597(IT)I) and Brendon Trotter
(2012‑4621(IT)I and 2013‑89(IT)I),
on January 9 and 10, 2014, at Toronto, Ontario.
Before: The Honourable Gerald J. Rip, Chief
Justice
Appearances:
|
Counsel for the Appellant:
|
Steven Barrett
Derrick McIntosh
|
|
Counsel for the Respondent:
|
John Grant
Rishma Bhimji
|
____________________________________________________________________
JUDGMENT
The appeals from the reassessments made
under the Income Tax Act for the 2010 and 2011 taxation years are
allowed, with party and party costs, and the matter is referred back to the
Minister of National Revenue for reconsideration and reassessments on the basis
that the appellant is entitled to claim the education tax credit and textbook
tax credit.
Signed at Ottawa, Canada, this 17th day of February 2014.
"Gerald J. Rip"
Docket: 2013-735(IT)I
BETWEEN:
JENNY PEIH‑CHIR TSAI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal heard on common evidence with the
appeals of Thileeban Kandasamy (2013‑1263(IT)I),
Collin Terpstra (2012‑4474(IT)I and 2013‑2385(IT)I),
Andrew Yadegari (2013‑1509(IT)I), Thomas Havey (2013‑1793(IT)I,
Hilary Myron (2013‑2596(IT)I), Sassan Ghazan‑Shahi
(2013‑2592(IT)I), Bita Hashemi (2013‑2597(IT)I) and
Brendon Trotter (2012‑4621(IT)I and 2013‑89(IT)I),
on January 9 and 10, 2014, at Toronto, Ontario.
Before: The Honourable Gerald J. Rip, Chief
Justice
Appearances:
|
Counsel for the Appellant:
|
Steven Barrett
Derrick McIntosh
|
|
Counsel for the Respondent:
|
John Grant
Rishma Bhimji
|
____________________________________________________________________
JUDGMENT
The appeal from the reassessment made under
the Income Tax Act for the 2011 taxation year is allowed, with party and
party costs, and the matter is referred back to the Minister of National Revenue
for reconsideration and reassessment on the basis that the appellant is
entitled to claim the education tax credit and textbook tax credit.
Signed at Ottawa, Canada, this 17th day of February 2014.
"Gerald J. Rip"
Docket: 2013-1509(IT)I
BETWEEN:
ANDREW YADEGARI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal heard on common evidence with the
appeals of Thileeban Kandasamy (2013‑1263(IT)I),
Collin Terpstra (2012‑4474(IT)I and 2013‑2385(IT)I),
Jenny Peih‑Chir Tsai (2013‑735(IT)I), Thomas Havey
(2013‑1793(IT)I, Hilary Myron (2013‑2596(IT)I), Sassan Ghazan‑Shahi
(2013‑2592(IT)I), Bita Hashemi (2013‑2597(IT)I) and
Brendon Trotter (2012‑4621(IT)I and 2013‑89(IT)I),
on January 9 and 10, 2014, at Toronto, Ontario.
Before: The Honourable Gerald J. Rip, Chief
Justice
Appearances:
|
Counsel for the Appellant:
|
Steven Barrett
Derrick McIntosh
|
|
Counsel for the Respondent:
|
John Grant
Rishma Bhimji
|
____________________________________________________________________
JUDGMENT
The appeals from the reassessments made
under the Income Tax Act for the 2010 and 2011 taxation years are
allowed, with party and party costs, and the matter is referred back to the
Minister of National Revenue for reconsideration and reassessments on the basis
that the appellant is entitled to claim the education tax credit and textbook
tax credit.
Signed at Ottawa, Canada, this 17th day of February 2014.
"Gerald J. Rip"
Docket: 2013-1793(IT)I
BETWEEN:
THOMAS HAVEY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal heard on common evidence with the
appeals of Thileeban Kandasamy (2013‑1263(IT)I),
Collin Terpstra (2012‑4474(IT)I and 2013‑2385(IT)I),
Jenny Peih‑Chir Tsai (2013‑735(IT)I), Andrew Yadegari
(2013‑1509(IT)I, Hilary Myron (2013‑2596(IT)I), Sassan Ghazan‑Shahi
(2013‑2592(IT)I), Bita Hashemi (2013‑2597(IT)I) and
Brendon Trotter (2012‑4621(IT)I and 2013‑89(IT)I),
on January 9 and 10, 2014, at Toronto, Ontario.
Before: The Honourable Gerald J. Rip, Chief
Justice
Appearances:
|
Counsel for the Appellant:
|
Steven Barrett
Derrick McIntosh
|
|
Counsel for the Respondent:
|
John Grant
Rishma Bhimji
|
____________________________________________________________________
JUDGMENT
The appeal from the reassessment made under
the Income Tax Act for the 2011 taxation year is allowed, with party and
party costs, and the matter is referred back to the Minister of National
Revenue for reconsideration and reassessment on the basis that the appellant is
entitled to claim the education tax credit and textbook tax credit.
Signed at Ottawa, Canada, this 17th day of February 2014.
"Gerald J. Rip"
Docket: 2013-2596(IT)I
BETWEEN:
HILARY MYRON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal heard on common evidence with the
appeals of Thileeban Kandasamy (2013‑1263(IT)I),
Collin Terpstra (2012‑4474(IT)I and 2013‑2385(IT)I),
Jenny Peih‑Chir Tsai (2013‑735(IT)I), Andrew Yadegari
(2013‑1509(IT)I, Thomas Havey (2013‑1793(TI)I), Sassan Ghazan‑Shahi
(2013‑2592(IT)I), Bita Hashemi (2013‑2597(IT)I) and
Brendon Trotter (2012‑4621(IT)I and 2013‑89(IT)I),
on January 9 and 10, 2014, at Toronto, Ontario.
Before: The Honourable Gerald J. Rip, Chief
Justice
Appearances:
|
Counsel for the Appellant:
|
Steven Barrett
Derrick McIntosh
|
|
Counsel for the Respondent:
|
John Grant
Rishma Bhimji
|
____________________________________________________________________
JUDGMENT
The appeal from the reassessment made under
the Income Tax Act for the 2011 taxation year is allowed, with party and
party costs, and the matter is referred back to the Minister of National
Revenue for reconsideration and reassessment on the basis that the appellant is
entitled to claim the education tax credit and textbook tax credit.
Signed at Ottawa, Canada, this 17th day of February 2014.
"Gerald J. Rip"
Docket: 2013-2592(IT)I
BETWEEN:
SASSAN GHAZAN‑SHAHI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal heard on common evidence with the
appeals of Thileeban Kandasamy (2013‑1263(IT)I),
Collin Terpstra (2012‑4474(IT)I and 2013‑2385(IT)I),
Jenny Peih‑Chir Tsai (2013‑735(IT)I), Andrew Yadegari
(2013‑1509(IT)I, Thomas Havey (2013‑1793(IT)I), Hilary Myron
(2013‑2596(IT)I), Bita Hashemi (2013‑2597(IT)I) and
Brendon Trotter (2012‑4621(IT)I and 2013‑89(IT)I),
on January 9 and 10, 2014, at Toronto, Ontario.
Before: The Honourable Gerald J. Rip, Chief
Justice
Appearances:
|
Counsel for the Appellant:
|
Steven Barrett
Derrick McIntosh
|
|
Counsel for the Respondent:
|
John Grant
Rishma Bhimji
|
____________________________________________________________________
JUDGMENT
The appeal from the reassessment made under
the Income Tax Act for the 2011 taxation year is allowed, with party and
party costs, and the matter is referred back to the Minister of National
Revenue for reconsideration and reassessment on the basis that the appellant is
entitled to claim education tax credit and textbook tax credit.
Signed at Ottawa, Canada, this 17th day of February 2014.
"Gerald J. Rip"
Docket: 2013-2597(IT)I
BETWEEN:
BITA HASHEMI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal heard on common evidence with the
appeals of Thileeban Kandasamy (2013‑1263(IT)I),
Collin Terpstra (2012‑4474(IT)I and 2013‑2385(IT)I),
Jenny Peih‑Chir Tsai (2013‑735(IT)I), Andrew Yadegari
(2013‑1509(IT)I, Thomas Havey (2013‑1793(IT)I), Hilary Myron
(2013‑2596(IT)I), Sassan Ghazan‑Shahi (2013‑2592(IT)I)
and Brendon Trotter (2012‑4621(IT)I and 2013‑89(IT)I),
on January 9 and 10, 2014, at Toronto, Ontario.
Before: The Honourable Gerald J. Rip, Chief
Justice
Appearances:
|
Counsel for the Appellants:
|
Steven Barrett
Derrick McIntosh
|
|
Counsel for the Respondent:
|
John Grant
Rishma Bhimji
|
____________________________________________________________________
JUDGMENT
The appeal from the reassessment made under
the Income Tax Act for the 2011 taxation year is allowed, with party and
party costs, and the matter is referred back to the Minister of National
Revenue for reconsideration and reassessment on the basis that the appellant is
entitled to claim the education tax credit and textbook tax credit.
Signed at Ottawa, Canada, this 17th day of February 2014.
"Gerald J. Rip"
Dockets: 2012-4621(IT)I
2013-89(IT)I
BETWEEN:
BRENDON TROTTER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal heard on common evidence with the
appeals of Thileeban Kandasamy (2013‑1263(IT)I),
Collin Terpstra (2012‑4474(IT)I and 2013‑2385(IT)I),
Jenny Peih‑Chir Tsai (2013‑735(IT)I), Andrew Yadegari
(2013‑1509(IT)I, Thomas Havey (2013‑1793(TI)I), Hilary Myron
(2013‑2596(IT)I), Sassan Ghazan‑Shahi (2013‑2592(IT)I)
and Bita Hashemi (2013‑2597(IT)I),
on January 9 and 10, 2014, at Toronto, Ontario.
Before: The Honourable Gerald J. Rip, Chief
Justice
Appearances:
|
Counsel for the Appellant:
|
Steven Barrett
Derrick McIntosh
|
|
Counsel for the Respondent:
|
John Grant
Rishma Bhimji
|
____________________________________________________________________
JUDGMENT
The appeals from the reassessments made
under the Income Tax Act for the 2010 and 2011 taxation years are
allowed, with party and party costs, and the matter is referred back to the
Minister of National Revenue for reconsideration and reassessment on the basis
that the appellant is entitled to claim the education tax credit and textbook
tax credit.
Signed at Ottawa, Canada, this 17th day of February 2014.
"Gerald J. Rip"
Citation: 2014 TCC 47
Date: 20140217
Docket: 2013-1263(IT)I
BETWEEN:
THILEEBAN KANDASAMY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
Dockets: 2012-4474(IT)I
2013-2385(IT)I
AND BETWEEN:
COLLIN TERPSTRA,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
Dockets: 2012-4621(IT)I
2013-89(IT)I
AND BETWEEN:
BRENDON TROTTER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
Docket: 2013-735(IT)I
AND BETWEEN:
JENNY PEIH-CHIR TSAI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
Docket: 2013-1509(IT)I
AND BETWEEN:
ANDREW YADEGARI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
Docket: 2013-1793(IT)I
AND BETWEEN:
THOMAS HAVEY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
Docket: 2013-2596(IT)I
AND BETWEEN:
HILARY MYRON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
Dockets: 2013-2597(IT)I
AND BETWEEN:
BITA HASHEMI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
Docket: 2013-2592(IT)I
AND BETWEEN:
SASSAN GHAZAN-SHAHI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Rip C.J.
[1]
After receiving the
degree of Doctor of Medicine ("M.D.") from a university the
individual who wishes to practice medicine in Ontario is required to register
in a post-graduate program to qualify for a license to practice medicine in Ontario. The post-graduate
medical residency programs are administered through Faculties or Schools of
Medicine at Canadian universities in conjunction with hospitals, referred to as
teaching hospitals, affiliated with the university. The individual, identified
as a "resident", pays a registration fee to the university but no
tuition. The resident may follow the program from two to seven years depending
on the medical specialty the resident wishes to undertake. The resident may
work from anywhere from 50 to more hours a week for salary in a teaching
hospital supervised by senior physicians who are appointed by the university.
[This is referred to as the "clinical" portion of the program.] The
programs also include from two to four hours of academic courses per month. The
university issues to the resident the prescribed form known as "Tuition, Education
and Textbook Amounts Certificate" (Form T2202A) for filing with the
Minister of National Revenue ("Minister").
[2]
The nine appellants
were registered in the medical residency programs in Ontario universities. Each
appellant appeals from assessments in which the Minister denied their claims
for the educational tax credit and textbook tax credit pursuant to
Section 118.6 of the Income Tax Act ("Act") on the
basis that each appellant was not enrolled in a "qualifying educational
program" as a full‑time student at a "designated educational
institution" as those terms are defined in Subsection 118.6(1) of the
Act.
[3]
The appeals were heard
on common evidence. The names of the appellants, the years in appeal and the
university at which each was registered for the post-graduate program are:
|
Name
|
Year(s) under appeal
|
University
|
|
|
|
|
|
Thileeban Kansasamy
|
2011
|
Toronto
|
|
Andrew Yadegari
|
2010-2011
|
Western
|
|
Thomas Havey
|
2011
|
Toronto
|
|
Collin Terpstra
|
2010-2011
|
McMaster
|
|
Hilary Myron
|
2011
|
Ottawa
|
|
Sassan Ghazan-Shahi
|
2011
|
Queen's
|
|
Bita Hashemi
|
2011
|
Toronto
|
|
Brendon Trotter
|
2010-2011
|
McMaster
|
|
Jenny Peih-Chir Tsai
|
2011
|
Toronto
|
[4]
The relevant portions
of Section 118.6 of the Act read as follow:
|
(1) For the purposes of sections 63 and 64 and this subdivision,
|
(1) Les définitions qui suivent s'appliquent aux articles 63 et
64 et à la présente sous‑section.
|
|
"designated
educational institution" means
|
« établissement
d'enseignement agréé »
|
|
(a) an
educational institution in Canada that is
|
a) Un des établissements d'enseignement suivants situés au
Canada :
|
|
(i) a university, college or other educational institution
designated by the Lieutenant Governor in Council of a province as a specified
educational institution under the Canada Student Loans Act, designated
by an appropriate authority under the Canada Student Financial Assistance
Act, or …
|
(i) université, collège ou autre établissement d'enseignement
agréé soit par le lieutenant-gouverneur en conseil d'une province au titre de
la Loi fédérale sur les prêts aux étudiants, soit par une autorité
compétente en application de la Loi fédérale sur l'aide financière aux
étudiants, ou . . .
|
|
|
|
|
"qualifiying
educational program" means a program of not less than three consecutive
weeks duration that provides that each student taking the program spend not
less than ten hours per week on courses or work in the program and …
|
« programme de formation admissible » Programme d'une
durée minimale de trois semaines consécutives, aux cours ou aux travaux
duquel l'étudiant doit consacrer dix heures par semaine au moins et . . .
|
|
(2) There may be deducted in computing an individual's tax payable
under this Part for a taxation year the amount determined by the formula
|
(2) Le montant obtenu par la formule suivante est déductible dans le
calcul de l'impôt payable par un particulier en vertu de la présente partie
pour une année d'imposition :
|
|
A
x B
|
A x B
|
|
where
|
où :
|
|
A is the appropriate percentage for the year; and
|
A représente le taux de base pour l'année :
|
|
B is the total of the products obtained when
|
B la somme
des produits suivants :
|
|
(a) $400 is multiplied by the number of
months in the year during which the individual is enrolled in a qualifying
educational program as a full‑time student at a designated educational
institution, and …
|
a) 400 $ multipliés par le nombre
de mois de l'année pendant lesquels le particulier est inscrit à un programme
de formation admissible comme étudiant à temps plein d'un établissement
d'enseignement agréé, . . .
|
|
if the
enrolment is proven by filing with the Minister a certificate in prescribed
form issued by the designated educational institution and containing
prescribed information …
|
Pour que le
montant soit déductible, l'inscription du particulier doit être attestée par
un certificat délivré par l'établissement — sur le formulaire prescrit
contenant les renseignements prescrits — et présenté au ministre et,
. . .
|
[5]
My colleague
Justice Paris considered a similar appeal in Pan et al v.
The Queen in 2010. A number of residents
appealed from assessments denying them the education tax credit and they were
successful. In Pan, the Crown's position was that the residents were not
enrolled in a qualifying educational program because they derived a benefit by
receiving instruction at no charge. Justice Paris held that in the context
of Subsection 118.6(1) "benefit" is intended by Parliament to
mean an economic or material benefit that can be measured in monetary terms
rather than an intangible advantage. A free education offered by the university
involved no monetary benefit to the residents.
[6]
In these appeals the
Crown took a different position in denying the claims for the education tax
credit. The Minister's position, among other things, is that the program is
carried on by a hospital, not a university, that the residents spend less than
ten hours a week on courses and are not full‑time students at a
university.
Evidence of Ms. Rhonda Trowell
[7]
Ms. Rhonda Trowell,
Director of the Strategy Implementation Team for the Professional Association
of Residents of Ontario ("PARO"), the bargaining agent for residents
of Ontario, both testified and filed an affidavit in support of the appellants.
I agree that Ms. Trowell's work at PARO makes her familiar with the
educational and licensing requirements of residents in Ontario. In her
affidavit, buttressed by her testimony, Ms. Trowell describes the
residency program in Ontario, its purpose, its requirements, its
administration, the nature of the residents' work and study and matters related
generally to a "resident program". The cross‑examination of
Ms. Trowell clarified her evidence but did not substantially challenge it.
I have relied heavily on her evidence.
[8]
Ms. Trowell
explained that the residency program is a multi‑year training program through
which all physicians and surgeons in Ontario must follow and pass upon
completion of medical school in order to be admitted to the practice of
medicine. Any residency program must be accredited by the Royal College of
Physicians and Surgeons of Canada ("Royal College") or the College of
Family Physicians of Canada ("CFPC"), depending on the resident's
choice of specialty.
[9]
The program trains
residents to enter medical practice in the specialty of their choice, for
example, paediatrics, ophthalmology, orthopaedics, neurology, etc.
[10]
The residents' presence
at the hospital gives them the practical training to eventually practice their
craft independently. The training includes direct clinical patient care work
that they perform under supervision and assessment. They participate in patient‑related
rounds at the hospital. They also undertake research and studies in medicine
and prepare for and present at educational rounds. They also attend formal
lectures and conferences, among other things. During rounds, residents are
expected to describe to their peers the particular health problem.
[11]
Upon completion of a
residency program, the person must pass certification exams administered by the
Royal College or CFPC, depending on the specialty, before they can undertake the
practice of medicine independently.
[12]
Upon receipt of a M.D.
degree the doctor will normally apply for admission to a residency program in a
particular specialty at a medical school of an accredited university. Once the
university accepts the doctor for admission to the residency program, the
university informs the College of Physicians and Surgeons of Ontario
("CPSO"). The CPSO is the professional regulating body for
practitioners of medicine in Ontario.
[13]
Each accredited
university is affiliated with one or more teaching hospitals where the
residents are employed to engage in clinical training and provide clinical
services to members of the public. The university classifies the residents as
students of the university. The hospital pays the residents a salary.
[14]
The doctor applies to
the accredited university for acceptance to a residency program. The resident
pays a registration fee to the university to enroll in its program. The
university assigns the student to its teaching hospital or if it has more than
one teaching hospital, to a particular hospital.
[15]
It is the CPSO that
grants a limited licence, known as an "educational licence", to the
resident to practice medicine. The licence, called "certificate
authorizing post-graduate education" permits the resident to practice only
under the supervision of staff physicians and surgeons at the hospital the
resident works. The resident is not permitted to practice medicine
independently, without supervision. The CPSO will only issue an educational
licence if it is satisfied that the applicant satisfies all CPSO's standards
and qualifications. The student cannot practice medicine and cannot be a
resident without an educational licence. At the beginning of each year of
residence, the resident must apply for a new educational licence.
[16]
The teaching hospitals
are staffed by medical teams including
staff physicians as well as the residents who are learning to become
independently licenced physicians through this program. Staff physicians and
surgeons who supervise the residents also have a dual status: they have
hospital privileges at the teaching hospital and are also professors with an
academic appointment at the faculty of medicine of the university with which
the hospital is affiliated. Each university assigns a Program Director to its
residency program.
[17]
While the residency
programs are established and administered by the universities all or virtually
all instruction and work within the programs take place in teaching hospitals
or other health care facilities under the affiliation agreement the hospital
has with the university including, in Ontario, about 200 community hospitals. The
University of Toronto has at least ten teaching hospitals and other than the
Program Director, there may be a site director at each hospital.
[18]
The residents in a
program work at the hospital or other health facility approximately 50 to 60
hours per week, 48 weeks a year, depending on the program. They work eight to
ten hours a day, five days a week and are "on call" either overnight
during the week or 24 hours on weekends. The employment of residents keeps
hospitals operating overnight and on weekends.
[19]
There are also an
insignificant number of residents who work on a part‑time basis, for
example three days a week. The length of a program undertaken by part‑time
residents would be, in such a case, double that of a full‑time resident.
(None of the appellants was a part‑time resident.)
[20]
PARO has an agreement
with the The Council of Academic Hospitals of Ontario ("CAHO") which
represents all the teaching hospitals in Ontario. The Agreement governs terms
and conditions of employment of the residents and recognizes that the residents
are both physicians employed by the hospitals and post-graduate medical
trainees registered in approved university programs leading to a licence or
certification. The residents are paid by the university in accordance with the
pay scale in the PARO‑CAHO Agreement.
[21]
If, for whatever reason,
the resident ceases to be registered in the residency program at a university,
including expulsion of the resident by the university, the doctor ceases to be
a resident. The CPSO will revoke the educational licence of the resident and
the resident will no longer be on the medical staff of the hospital. The person
will no longer be permitted to practice medicine in Ontario. The decision is
the university's. However, a resident may also be dismissed from employment by
the hospital. The PARO‑CAHO Agreement provides protection for residents
against dismissal from the hospitals without cause but dismissal from the
program by the university is recognized as "just cause" for dismissal
from the hospital's employ.
[22]
Each residency program
is subject to accreditation and periodic review by the Royal College and, with respect to family medicine programs, the CFPC. General standards that apply
to the programs ensure the type of training and instruction residents receive
are legislated by the Royal College and CFPC. These standards include organized
programs of rotations in the hospitals by the residents and "other
educational experiences" to ensure competency in the specialty chosen by
the resident. The standards also require an evaluation of each resident
enrolled in the program.
[23]
The Royal College also establishes specific standards, requirements and objectives for each
specialty. The program for residents in orthopaedics may have different
requirements as to clinical patient care, research, surgery, than does the
program for paediatrics, for example. The Royal College requirements are
minimum requirements and the universities may have a program that exceeds the
minimum.
[24]
Throughout his or her
residency, during each rotation and the duration of the residency, the resident
is subject to on‑going evaluation. Each university establishes its own
policies subject to the requirements of the Royal College and CFPC. The
assessments, referred to as "In‑training Evaluation Reports"
("ITERs"), are in writing. In the event a resident's performance is
unsatisfactory, the resident may be placed on academic "remediation"
or academic "probation" or dismissed from the program. There is an
appeal process, internal to each university, available to the resident. Each
university has its own policy but academic remediation or probation usually
provides for an extension to the particular resident's residency during which
he or she repeats rotations that were considered unsatisfactory.
[25]
At the end of a program
a resident is subject to an overall final evaluation. In order for a resident
to take the required certification examinations administered by the Royal
College or the CFPC to enter independent practice in a specialty, the
resident's residency educational program must assess him or her as having met
the requirements of the residency program by completing what is called a "Final
In‑Training Evaluation Report" ("FITER") confirming
satisfactory completion of the program. Without a successful FITER, the
resident cannot take the examination for the required Royal College or CFPC certificate. During the residency program the residents usually are continually
preparing for the Royal College and CFPC exams by taking practice exams
administered by the program.
[26]
The Province of Ontario funds the accredited universities for the residency programs. The Ontario
Ministry of Training, Colleges and Universities uses full‑time
registration codes and the universities consider the residents as full‑time
students enrolled at the particular university.
Respondent's witnesses
[27]
The respondent called
five witnesses, all officials at the universities involved.
[28]
Dr. Lorne Wiesenfeld
is a physician and Vice‑Dean of Post-graduate Medical Education at the
University of Ottawa Faculty of Medicine. He oversees 67 residency and
Fellowship programs at the university. Dr. Hilary Myron was a student
at the university's paediatric program.
[29]
Dr. Wiesenfeld
explained that when a potential resident applies to the University of Ottawa for acceptance to a residency program, the students are matched to the programs
available at the university and the specialty the applicant is seeking to
study. Once the applicant is approved for acceptance to a particular program,
the Faculty of Medicine of the University sends a Letter of Appointment to the
applicant. Dr. Myron's first Letter of Appointment was dated March 31,
2010 and, among other things, specifies and explains the program, in her case,
paediatrics, the funding source, the Ontario Ministry of Health, and the
training levels, that is, "Postgrad Year 1" and "Postgrad
Year 2". She accepted a second appointment on February 28, 2012
for "Postgrad Year 3" level. Upon completion of the program she
would receive a CPSO Post-graduate Education Certificate. The Letter of Appointment
also states that she "may be assigned for varying lengths of time to any
of the hospitals, institutions or teaching practices associated with the education
program of this University".
[30]
The University of Ottawa charged Ms. Myron in 2010 a registration fee of $350, since increased.
If a resident does not pay the fee he or she is suspended. The fee represents
the cost of administration of the program and oversight of the program; it does
not fully fund the course; funding is by the Ontario Government.
[31]
One of the arguments of
the respondent is that the time spent by the residents on academic courses is
less than the ten hours per week required for a program to be a
"qualifying educational program" within the meaning of
section 118.6 of the Act. Dr. Wiesenfeld testified that the
University of Ottawa's Faculty of Medicine requires the residents to attend
what is called "academic half‑day" programs, which could be
anywhere from a half‑day to a full day. This is a compulsory weekly
feature of the University of Ottawa program and students must leave their
service in the hospital to attend the "academic half‑day" program.
The program may take place in the hospital or at the university.
[32]
A Residency Program
Committee, chaired by the Director of the Program and site directors, determine
if a resident has acquired the medical requirements for promotion to the next
level in the program.
[33]
The University of Ottawa issues a "generic" diploma to a resident who successfully
completes the University's program; this permits the resident to sit for the Royal College or CFPC examination.
[34]
Finally,
Dr. Wiesenfeld stated, "everybody involved [in the program] is a
university appointment". The University of Ottawa considers the post-graduate
residency program as university education.
[35]
Mr. Scott Rumas,
Manager of the Post-graduate Medical Education Office at the Schulich School of
Medicine and Dentistry at the Western University also testified as a witness
for the respondent. Mr. Rumas produced a copy of a letter he wrote on
January 6, 2014 in reply to a letter from the Department of Justice. The
Department of Justice's letter appears to have requested "[a]ny documents,
notes, by‑laws, contracts, policies, agreements or any information in
respect of the definition of a 'full‑time' student in the post-graduate medical
residency program at Western University", with reference to several appellants.
Mr. Rumas' reply describes the appointment of the resident,
responsibilities in post-graduate medical education and other topics, all
previously referred to by Ms. Trowell and Dr. Wiesenfeld and
consistent with their evidence. I did not find any of Mr. Rumas' evidence
that would significantly distinguish the program at Western University from that of the University of Ottawa or as described generally by Ms. Trowell.
[36]
Ms. Sharon Cameron,
Manager of Post-graduate Medical Education at McMaster University,
Mr. Jordan Sinnett, Resident Program Manager at Queen's University
and Ms. Loretta Muharuma, Director of Operations, Post-graduate
Office of the Faculty of Medicine at the University of Toronto also testified.
Their evidence was consistent with earlier evidence. One possible difference may
distinguish the "Academic Half‑Day" programs. At McMaster University each program has its own half‑day program which is compulsory.
Ms. Muharuma explained that the "Academic Half‑Day"
programs at the University of Toronto are controlled by each Department of the
Faculty, each with its own curriculum, and not controlled centrally. She
testified the Academic Half‑Day program is compulsory in Neurology but
could not speak to the other specialties. All witnesses confirmed that their
university issues certificates to residents who have successfully completed their
program of study to enable them to take the Royal College or CFPC examinations.
[37]
To reiterate the
Crown's position:
a) each of the appellants spends less
than ten hours a week on courses in a program within the meaning of
"qualifying educational program" as defined in Subsection 118.6(1)
of the Act;
b) none of the appellants are
"full‑time student", let alone a student and therefore they do
not qualify for and may not deduct an amount as an education tax credit
described in Subsection 118.6(2) of the Act; and
c) No appellant is enrolled in a
qualifying educational program as a full‑time student at a designated
educational institution.
[38]
Counsel for the
respondent submitted that since the term "full‑time student" in
Subsection 118.6(2) of the Act is not defined one should refer to
that term in "companion" legislation, namely, regulations to the Canada
Student Loans Act ("CSL Act") and the Canada
Student Financial Assistance Act ("CSFA Act"). The term
"full‑time student" is defined at Subsection 2(1) of the Regulations
respecting Canada student loans
for purposes of the CSL Act and its regulations as follows:
|
"full‑time
student" means a person
|
« étudiant
à temps plein » Personne :
|
|
(a) who, during a confirmed period within
a period of studies, is enrolled in courses that constitute
|
a) qui, durant
une période confirmée d'une période d'études, est inscrite à des cours qui
représentent, par rapport au nombre de cours que l'établissement
d'enseignement agréé exige pour reconnaître que des études sont suivies à
temps plein :
|
|
…
|
…
|
|
(ii) at least 60 per cent of a course load
recognized by the specified educational institution as constituting a full
course load, in any other case,
|
(ii) soit au moins 60 pour cent de
ce nombre, dans les autres cas;
|
|
(b) whose primary occupation during the
confirmed periods within that period of studies is the pursuit of studies in
those courses, and
|
b) dont la
principale activité pendant les périodes confirmées de cette période d'études
est de suivre ces cours;
|
|
(c) who complies with the requirements of
subsection 3(1); (étudiant à temps plein)
|
c) qui se conforme
aux exigences du paragraphe 3(1). (full‑time student)
|
[39]
For the purpose of the regulations
respecting the CSFA Act the word "course" means:
|
2(1) …
formal
instruction or training that constitutes, or is determined by a specified
educational institution to be equivalent to, an essential element of a
program of studies at a post‑secondary school level at that specified
educational institution but does not include any formal instruction or
practical training required for acceptance in a professional corporation or
for the practice of any trade or profession, unless that formal instruction
or practical training is necessary to obtain a degree, certificate or diploma
from that specified educational institution; (cours)
|
2(1) . . .
Formation ou
enseignement formels constituant un élément essential d'un programme d'études
de niveau postsecondaire offert à un établissement d'enseignement agréé, ou
considéré comme tel par cet établissement. La présente définition ne comprend
ni l'enseignement formel ni la formation pratique requis pour l'adhésion à
une corporation professionnelle ou l'exercice d'un métier ou d'une
profession, sauf si cet enseignement ou cette formation est nécessaire à
l'obtention d'un diplôme ou d'un certificat de l'établissement agréé. (course)
|
[40]
The definitions of
"full‑time student" and "course" in the CSFA Act are
identical to those definitions in the regulations respecting the CSL Act.
[41]
To be a "full‑time
student" for purposes of the CSL regulations and CSFA regulations,
the person's primary occupation must be "the pursuit of studies" in
courses. And a "course" is formal "instruction" or
"training", determined by a specified educational institution that
constitutes studies at a post‑secondary level at that institution but not
study or training for acceptance in a professional corporation such as the
Royal College or CFPC unless — and this is a significant
"unless" — instruction or training is required to obtain a
certificate from that specified educational institution, that is, in the
appeals at bar, the university.
[42]
The Crown's view is
that the resident's primary occupation as a resident is an employee of the
hospital and not a student. The only time that a resident is not an employee of
the hospital during his or her residency is when he or she is not being paid.
And the only time in one's residence that he or she is not paid is when the
resident attends the Academic Half‑Day Programs. The Academic Half‑Day
portion of the program is less than ten hours a week. Any "study"
that is paid for cannot be included in the ten hours per week required to be
spent by the resident in a qualifying educational program. In the Crown's view
a resident cannot be both a full‑time student and full‑time
employee.
[43]
The Crown cited the
decision of Mayo Foundation for Medical Education and Research et al. v.
United States. In this case, the Mayo Foundation
asked the Supreme Court of the United States to find that the Treasury
Department of the United States did not have the authority to promulgate a rule
that medical residents were required to pay a social security tax. The Supreme
Court confirmed the decision of the U.S. Court of Appeals for the Eight Circuit. The
Internal Revenue Code does not define "student" or address medical
residents. The Court held that focusing on hours worked and hours spent in
studies reasonably distinguished between workers who studied and students who
worked: employees working long enough hours to be considered full‑time
filled the conventional measure of available time with work. The rule did not
distinguish between classroom education and clinical training. It was held that
residents — who worked long hours, were highly skilled, and typically
shared some or all of the terms of employment of career employees — were
the kind of workers Congress intended to contribute to and benefit from the Social
Security Act.
[44]
The U.S. Court of
Appeal held that the Treasury Department had authority to make the rule.
[45]
Respondent's counsel
also referred to the reasons for judgment of my colleague Justice Archambault
in Chabaud v. The Queen. Dr. Chabaud held a doctorate
in molecular biology and received an income of $36,101 (i.e. $36,601 —
$500) to perform research in a laboratory. The Minister did not deny the
$36,601 was a scholarship, fellowship or bursary within the meaning of
paragraph 56(1)(a) of the Act but was of the view that the
taxpayer did not qualify for any exemption in excess of $500 under
paragraph 56(3)(a) of the Act because the taxpayer was not a
student and, thus, was not entitled to an education tax credit.
[46]
Justice Archambault
dismissed the appeal on the basis the $36,601 could not be a scholarship,
fellowship, bursary or research grant because it was not paid to the taxpayer
by way of financial assistance. The $36,601 was received as employment income;
the taxpayer was an employee of the laboratory where he performed his research.
[47]
In finding that
Dr. Chabaud was an employee, Archambault J. opined that
…
there is no relevant difference between the work Mr. Chabaud did as a
postdoctoral research fellow and that of an articling law student, a medical
resident, an accounting trainee or an apprentice. All must acquire more
experience before moving on to the next stage of their careers. Judicial notice
is taken of the fact that medical residents and articling law students must
work for a number of months under the supervision of an 'attending staff
physician' or 'articling principal' before being eligible for admission to
their respective professional bodies. During this period, they receive
remuneration for their work while acquiring more experience in their field.
[48]
Neither the Mayo
Foundation case nor the Chabaud appeal is helpful. Both cases held
that the subjects of the appeals were employees. In the Mayo Foundation,
the U.S. Court had to find if the residents were either employees or
students, they could not be both under the social security legislation. This is
not the situation before me. In Chabaud, this Court held that
Dr. Chabaud, who was not taking courses in a qualified educational program,
but performing research, was an employee. In the case at bar the appellants do
not contest that they are employees. Ms. Trowell described the residents
as having a dual status, as students and employees.
[49]
Respondent seeks to
give particular weight to the employee status of the residents as opposed to
their student status. Hence, counsel for the respondent referred to the CSL Act
and CSFA Act regulations as to the course load recognized by the
university as constituting a full course load and, in particular, that a full‑time
student's primary occupation is the pursuit of studies in the courses.
[50]
Subsection 118.6(1)
of the Act refers to both the CSL Act and CSFA Act in
defining the meaning of "designated educational institution".
Subsection 118.6(2) requires that eligibility for an education credit
depends on the student being enrolled as a "full‑time" student;
yet Parliament does not define that term in the Act nor does it refer to
the definition of "full‑time student" in other statutes, as it
did with respect to "designated educational institution". The
definition of "full‑time student" in the CSL Act regulations
and CSFA Act regulations do not define "full‑time
student" for purposes of section 118.6 of the Act.
[51]
Among the requirements
of Subsection 118.6(2) is that to be eligible for the education credit the
individual is to be enrolled in a qualifying educational program as a full‑time
student at a designated educational institution. Each of the witnesses has
acknowledged that the residents attending the resident program at their
university is enrolled as a full‑time student at the university.
[52]
It is the respondent's
view that the resident program is not at a designated educational institution,
the residence program takes place at a hospital and not a university, as
defined in Subsection 118.6(1).
[53]
The faculties and
schools of medicine of the universities are responsible for the resident
programs. The potential resident applies to the university for acceptance to
the university's post-graduate study program. The decision to accept or reject
the application is that of the university. There is no tuition fee charged to
the residents but the Government of Ontario considers them as full‑time
students in allocating financial grants to the universities. The teachers are
doctors appointed by the university to various professorial ranks. The university
considers the residents as full‑time students. The university determines
whether a resident may advance to the next level in the resident program. The
university may discipline a resident and the university's decision is binding
on the hospital. It is true that the clinical portion of the program takes
place at the hospital − and the clinical portion is the overwhelming
portion of the program − but it is carried on under the umbrella and
tutelage of the university.
[54]
I do not find it
illogical in reading Subsection 118(6) that a person can be both a full‑time
student and a full‑time employee or even carry on his or her own business
on a full‑time basis while a full‑time student. It is not the
average person's preference but it is not an infrequent choice that many
people, both residents and others, are compelled to make.
[55]
The definition of
"qualifying educational program" refers to a student taking the
program and spending not less than ten hours a week "on courses or
work" in the program. The word "or" in the phrase "course
or work" in the definition of "qualifying educational program"
in Subsection 118.6(1) of the Act must be conjunctive. The word
"or" permits an individual to follow a qualifying educational program
that is wholly made up of academic courses or one that is wholly made up of
work. The phrase also allows an individual to follow a qualifying educational
program that is made up of both academic courses and work, which is the
situation at bar. And because one is being paid for one's labour does not
disqualify him or her from being a student. We are not in the age of indentured
service.
[56]
Subparagraph 118.6(a)(ii)
of the Act defines a "designated educational institution" to
include an institution certified by the Minister of Human Resources and Skills
Development that furnishes a person with skills for, or improve a person's
skills, in an occupation. Hence, Parliament has contemplated situations where individuals
undertaking an occupation that is not university oriented to undertake a program
of study to learn the skills required for that occupation. The program of study
may comprise both courses and work. In other words, these individuals work at
their occupation at the same time as they take courses to learn or improve their
skills for their jobs. These individuals who spend at least ten hours on work or
courses at a designated educational institution for not less than three
consecutive weeks may be eligible for the education tax credit.
[57]
The same applies to
residents. I cannot agree that they are not eligible for an education tax credit
if they qualify under Subparagraph 118.6(1)(a)(i), Subsection 118.6(2)
and are enrolled as full‑time student. Respondent's counsel startled me
when he suggested that it would not be reasonable or fair to articling students
seeking to qualify for the Bar or accounting students who want to become Chartered
Professional Accountants if I allowed residents to claim the education tax
credit and not them. As I understand it, the courses offered to articling and
accounting students in Ontario are not offered by a designated educational
institution and this may be one reason they would not qualify. Taxpayers often
complain of the unfairness of the Act and often their complaint is well
founded. However, this is the first time in my 30 years as a judge that I
heard the Crown suggest that it may be prejudiced because the Act may not
be fair.
[58]
The appeals will be
allowed with party and party costs.
Signed at Ottawa, Canada, this 17th day of February 2014.
"Gerald J. Rip"
CITATION: 2014 TCC 47
COURT FILE NO.: 2013-1263(IT)I, 2012‑4474(IT)I, 2013‑2385(IT)I,
2013‑735(IT)I, 2013‑1509(IT)I, 2013‑1793(IT)I, 2013‑2596(IT)I,
2013‑2592(IT)I, 2013‑2597(IT)I, 2012‑4621(IT)I and 2013‑89(IT)I
STYLE OF CAUSE: THILEEBAN KANDASAMY v.THE QUEEN
COLLIN
TERPSTRA v. THE QUEEN
JENNY
PEIH‑CHIR TSAI v. THE QUEEN
ANDREW
YADEGARI v. THE QUEEN
THOMAS
HAVEY v. THE QUEEN
HILARY
MYRON v. THE QUEEN
SASSAN
GHAZAN-SHAHI v. THE QUEEN
BITA HASHEMI v. THE QUEEN
BRENDON
TROTTER v. THE QUEEN
PLACE OF HEARING: Toronto, Ontario
DATES OF HEARING: January 9 and 10, 2014
REASONS FOR JUDGMENT BY: The
Honourable Gerald J. Rip, Chief Justice
DATE OF JUDGMENT: February 17, 2014
APPEARANCES:
|
Counsel for the
Appellants:
|
Steven Barrett
Derrick McIntosh
|
|
Counsel for the
Respondent:
|
John Grant
Rishma Bhimji
|
COUNSEL OF RECORD:
For the Appellant:
Name: Derrick McIntosh
Firm: Sack,
Goldblatt Mitchell LLP
Toronto, Ontario
For the
Respondent: William F. Pentney
Deputy
Attorney General of Canada
Ottawa,
Canada
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