Citation: 2012TCC161
Date: 20120511
Docket: 2011-3147(IT)I
BETWEEN:
ELAINE J. ROSE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
V.A. Miller J.
[1]
Elaine J. Rose is appealing the
reassessment of her 2009 taxation year in which the Minister of National
Revenue (the “Minister”) disallowed her claim for tuition and education tax
credits.
[2]
The Appellant was not present at
the hearing but she was represented by her spouse. There was no dispute
respecting the facts in this matter but the parties disagreed concerning the
application of the law to those facts.
[3]
The Appellant is a full time
assistant professor in the School of Nursing at Mount Royal College in Calgary. In 2009 the tuition and education tax credits which
she claimed related to a doctoral program in Management in Organizational
Leadership (the “Program”) which she studied online from the University of
Phoenix. According to the documents submitted on behalf of the Appellant, she
was enrolled in the Program on a full time basis. It is expected that the
Program will take three years of study with an additional year to finish and
defend her thesis. The Program is not offered in Canada but it is recognized by
her employer; I assume for tenure purposes.
[4]
In 2009 the Appellant completed
eight courses which ranged from 3 to 9 weeks in length. She paid tuition fees
of $12,186US and education and textbooks fees of $4,650US.
[5]
The University of Phoenix had two
campuses in Canada but the Appellant had no connection with either of
these. She neither attended these campuses nor did she pay any of her fees to them.
Tuition Credit
[6]
The first question to be
determined is whether the Appellant was eligible to claim a tuition credit in
2009. The relevant portion of section 118.5 of the Income Tax Act (the “Act”)
provides.
Tuition credit
118.5 (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, or
(b) 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,
[7]
Paragraphs 118.5(1)(a)
and (b) establish different conditions to claim the tuition credit based
on (a) whether the individual was enrolled at an educational institution in Canada or (b) was in full-time attendance at a university outside Canada. Where paragraph (b) is applicable, then the tuition must be
paid in respect of a course at least 13 consecutive weeks long.
[8]
In four recent decisions,
this Court has considered whether individuals taking online courses through the
University of Phoenix were enrolled at an educational institution
in Canada.
[9]
Beaubier J. in Robinson
v. Canada, 2006 TCC 644 and Little J. in Cammidge v. Canada, 2011
TCC 172 both held that such individuals were enrolled at an educational
institution in Canada because the University of Phoenix had campuses in Canada.
In Cammidge, Little J. reasoned that the University of Phoenix was an institution in Canada because it subjected itself to Canadian
law by having campuses in Canada.
[10]
The Robinson and Cammidge
decisions were not followed by Margeson J. in Faint v. Canada, 2011 TCC 260 and Webb J. in Abdalla v. Canada,
2011 TCC 328. They both concluded that individuals enrolled in online courses
with the University of Phoenix and who had no connection with the
university’s campuses in Canada were not enrolled at an educational institution
in Canada. In Faint, Margeson J. stated:
25 With
respect to Phoenix, the only connection to Canada was the evidence that this
university had a campus in Canada during the year in question. However, the
Appellant did not take any courses at that campus, did not have any exams set
or marked by that campus, did not pay fees to that campus, did not attend any
classes at that campus, did not receive any instructions from that campus or
receive any technical support from that campus.
26 Under
these circumstances, the Court cannot conclude that there were any connecting
factors established to allow it to conclude that Phoenix was an institution in Canada
under paragraph 118.5(1)(a) of the Act.
27 The factors
referred to by the Appellant in her argument do not disclose any sufficient
connection to the Vancouver campus which would convince the Court to decide
otherwise.
[11]
I agree with the conclusions
reached in Faint (supra) and Abdella (supra). As
stated by Webb J. in Abdella (supra), paragraph 118.5(1)(a)
requires that the individual must be “enrolled at an educational institution
in Canada” and not simply enrolled at an educational institution which has
a campus in Canada.
[12]
The Appellant was enrolled in the
doctoral program with the University of Phoenix in the United
States. She paid her fees to the
university in Phoenix; she received all of her instruction from the United
States and when she had to attend seminars in person, she attended campuses in
the United States. She had no connection with the campuses in Canada. I
conclude that the Appellant was not enrolled at an educational institution in Canada and she
has not met the conditions in paragraph 118.5(1)(a).
[13]
For the purposes of paragraph
118.5(1)(b), it was not disputed that the Appellant was in full
attendance in a university outside Canada. The question is whether the tuition was paid in respect of a course which was
at least 13 consecutive weeks long. There are conflicting decisions from this
Court with respect to the meaning to be given to the word “course” in this
section.
[14]
In Ferre v. Canada,
2010 TCC 593, Paris J. relied on the French version of paragraph 118.5(1)(b)
to determine that the word “course” refers to a single course within a program
of studies and not the entire program of study. Margeson J. in Faint (supra)
agreed with the decision in Ferre. This interpretation would require
that a single course taken by the Appellant last at least 13 consecutive weeks.
[15]
However, Bowie J. in Siddell v. Canada, 2011 TCC 250, relied on the intent of
the legislation to interpret the word “course” as referring to the entire
program taken by the individual in an academic year. At paragraph 11 he stated:
11 It seems
to me unlikely that Parliament would intend to provide a tax credit to a
student who pursued the same five modules that Mr. Siddell pursued in 2008 if
they were pursued simultaneously over the periods between January 10 and May 21
and between August 21 and December 10, which is two semesters, but to provide
no credit to the student who completes the same modules one after the other as
he did. That interpretation of the legislation, in the words of the Supreme
Court in Cie immobilière ,
... would
clearly run contrary to the intent of the legislation and would consequently
tend to defeat rather than assist the attainment of its objects.
I therefore
prefer to interpret the word “course” in this context as referring not to the
individual modules, but the entire curriculum pursued throughout the academic
year. I would note as well that this meaning seems more consonant with the
words “leading to a degree” (in French, “conduisant à un diplôme”) which follow
the word “course” (cours) where it first appears in paragraph 118.5(1)(b),
and follow it also in the definition in subsection 118.6(1). The concept of a
course leading to a degree is more in keeping with the whole curriculum of
study than with a solitary subject within that curriculum.
[16]
Webb J. in Abdalla (supra)
agreed with the conclusion in Siddell, but he based his reasoning on
subsections 3(1) and 33(2) of the Interpretation Act which provide that
words in the singular include the plural and words in the plural include the
singular.
[17]
Paragraph 118.5(1)(b) has
been amended for the 2011 and subsequent taxation years to reduce the minimum
course length from at least 13 consecutive weeks to at least 3 consecutive
weeks. A consideration of the amendment itself and its purpose leads me to
conclude that the word “course” refers to a single course within a curriculum of studies as was determined by
Paris J. in Ferre and not the entire curriculum as was determined by
Bowie J. in Siddell. The technical
notes and budget papers gave the purpose of the amendment as follows:
Many programs
at foreign universities are based on semesters shorter than 13 weeks, with the
result that many Canadian students are denied tax recognition of education
costs that would otherwise be eligible for the credits or are denied access to
EAPs.
To improve the
tax recognition of education costs and access to EAPs for Canadian
post-secondary students who study outside Canada, Budget 2011 proposes to
reduce the minimum course-duration requirement that a Canadian student at a
foreign university must meet in order to claim the Tuition, Education and
Textbook Tax Credits to three consecutive weeks from 13 consecutive weeks. It
is also proposed that the 13-consecutive-week requirement for EAP purposes be
reduced to three consecutive weeks when the student is enrolled at a university
in a full-time course. The three-consecutive-week requirement is consistent
with the policy that applies to post-secondary students who study in Canada for
the purposes of qualifying for the Education Tax Credit, the Textbook Tax
Credit and EAPs. (The Tuition Tax Credit has no minimum duration requirement
when the program is taken from an institution in Canada.)
[18]
Paragraph 118.5(1)(b) was
amended so that Canadian students who were enrolled full-time at foreign
universities with school terms shorter than 13 weeks would still qualify for
the tuition tax credit. It is my view that the amendment was intended to ensure
that students, like the Appellant, who completed their courses one after the
other, rather than simultaneously, would be eligible for the tuition tax
credit.
[19]
In this appeal, each of the
individual courses taken by the Appellant in 2009 was less than 13 weeks in
duration. Regrettably, I find that the Appellant was not eligible for the
tuition tax credit in 2009.
[20]
In order to be eligible for the
education tax credit, subsections 118.6(1) and (2) require that the Appellant
meet the same conditions as were contained in subsection 118.5(1). The
Appellant must be enrolled in a qualifying educational program as a full-time
student at a designated educational institution. Subsection 118.6(1) defines
“designated educational institution” as one which is (a) in Canada or (b)
outside Canada at which the individual was enrolled in a course of
at least 13 weeks duration.
[21]
Pursuant to subsection 118.6(2.1),
a textbook tax credit can only be claimed by individuals who are entitled to an
education tax credit.
[22]
Because the University of Phoenix
in not an educational institution in Canada and none of the courses completed
by the Appellant in 2009 were at least 13 weeks duration, I conclude that the university
was not a “designated educational institution” and the Appellant is not
eligible to claim the education tax credit and consequently, she is not
entitled to the textbook tax credit in 2009.
[23]
The appeal is dismissed.
Signed at Ottawa,
Canada, this 11th day of May 2012.
“V.A. Miller”
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