Citation: 2010 TCC 589
Date: 20101112
Docket: 2010-1843(IT)I
BETWEEN:
DAVID HARINGA,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Woods J.
[1]
In the 2005 and 2006 taxation
years, David Haringa withdrew $6,774 and $4,000, respectively, from registered
retirement savings plans (RRSPs) in order to pursue PhD studies at an online
university based in the United States, Capella
University. He received his degree in 4½ years.
[2]
The issue is whether the RRSP
withdrawals are eligible for the special provisions known as Lifelong Learning
Plans in section 146.02 of the Income Tax Act.
[3]
In reassessments for these years,
the Minister of National Revenue included the withdrawals in the appellant’s
income and denied the application of section 146.02.
[4]
It is the position of the
respondent that one of the legislative requirements has not been satisfied. It
mandates that the appellant be enrolled at Capella in a course of at least 13
consecutive weeks duration.
Lifelong Learning Plans
[5]
Section 146.02 of the Act
provides a legislative scheme that enables individuals to withdraw funds from
their RRSPs to finance education. The withdrawals can be made on a tax-free
basis as long as the funds are returned to the RRSPs within a ten year period.
The maximum amount that may be withdrawn is $20,000.
[6]
In general, the legislation
requires that the individual be enrolled as a full-time student in a qualifying
educational program. It is useful to set out the definition of “qualifying
educational program” in section 146.02(1).
“qualifying
educational program” means a program at a designated educational institution,
as defined in subsection 118.6(1), of not less than three consecutive months
duration that requires that each student taking the program spend not less than
ten hours per week on courses or work in the program and that is
(a) of a
technical or vocational nature designed to furnish a person with skills for, or
improve a person’s skills in, an occupation, if the program is at an
institution described in subparagraph (a)(ii) of that definition; and
(b) at a
post-secondary school level, in any other case.
[7]
Canadian universities qualify for
these purposes as “designated educational institutions.” Foreign universities,
on the other hand, qualify only if the individual satisfies a further
enrollment requirement. The relevant provision is paragraph (b) of the
definition of “designated educational institution” in s. 118.6(1) of the Act.
The definition is reproduced in its entirety.
“designated educational institution”
means
(a) an
educational institution in Canada that is
(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 designated by the Minister of Higher
Education and Science of the Province of Quebec for the purposes of An Act
respecting financial assistance for students of the Province of Quebec, or
(ii) certified by
the Minister of Human Resources and Skills Development to be an educational
institution providing courses, other than courses designed for university
credit, that furnish a person with skills for, or improve a person’s skills in,
an occupation,
(b) a
university outside Canada at which the individual referred to in subsection (2)
was enrolled in a course, of not less than 13 consecutive weeks duration,
leading to a degree, or
(c) if the
individual referred to in subsection (2) resided, throughout the year referred
to in that subsection, in Canada near the boundary between Canada and the
United States, an educational institution in the United States to which the
individual commuted that is a university, college or other educational
institution providing courses at a post-secondary school level;
(Emphasis added.)
Analysis
[8]
The appellant’s position is
succinctly set out in his notice of appeal. It is reproduced in full below.
- I was a full time PhD student attending a US university online
(Capella).
- Capella University is recognized by the CRA and regionally accredited
by the Higher Learning Commission.
- I enrolled in 2 courses at a time (10 weeks) throughout the course
track portion of the program.
- I believe that a regionally accredited PhD program requires a full time
commitment from any learner to be successful. This work represents more effort
than a typical 10 week course.
[9]
An issue similar to this was
considered by the Tax Court of Canada in Fayle v. The Queen, 2005 TCC
71; [2005] 1 CTC 2840. The taxpayer in that case was a student enrolled at a
foreign university in a course that carried post-graduate level credit towards
a masters degree. The course was offered in two forms, one lasting 13 weeks and
a more intensive course lasting six weeks. The courses were otherwise
identical. The taxpayer enrolled in the six week course and was denied her
claim for a tuition tax credit.
[10]
Bowie J. reluctantly dismissed the
appeal for the following reasons:
[3] In presenting her case, the
Appellant argued that this is a literal but not a wise interpretation of the Act.
I could not agree more. However, the mandate of this Court, and the appellate
courts as well, is to apply the literal meaning of the words enacted by
Parliament, where that meaning is clear. The Courts may interpret legislation
that is ambiguous, but they may not, in the name of wisdom or otherwise, stray
from the intent of Parliament if it has been expressed in unambiguous terms.[1] Neither the expression “a course of less than 13 consecutive
weeks duration” in English, nor “des cours d’une durée inférieure à 13 semaines
consecutives” in French, is at all ambiguous.
[4] It is
with considerable regret that I must dismiss the appeal. The only avenue for
relief open to the Appellant is to seek a remission order under section 23 of
the Financial Administration Act, but that is a remedy that is outside
my jurisdiction.
[1] Bell
ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559.
[11]
I agree with the reasoning of
Bowie J. The appellant’s enrollment in courses of 10 weeks duration at a
foreign university does not satisfy the definition of “designated educational
institution.”
[12]
The appellant’s PhD program also
had a dissertation requirement in addition to the course requirement. Brief
testimony regarding this phase was given by the appellant at the hearing. He
testified that the dissertation component did not involve courses, and that he
worked on it throughout the 4½ year program even though the dissertation
element commenced after the two-year course requirement was finished.
[13]
In keeping with a purposive
interpretation of the legislation, I have no problem with construing the term
“course” to include a formal plan of study involved with a dissertation or
thesis. The problem in this case is that there is not sufficient evidence that
this formal period of study commenced in the taxation years at issue. I accept
that the appellant did some work on his dissertation throughout the PhD
program, but I am not satisfied on the evidence that the appellant was either
required or expected by the university to work on this while the course work
was being completed.
[14]
Finally, I would mention that the
appellant indicated at the hearing that he had not been aware of the 13 week
course requirement when he made the RRSP withdrawals. I have some sympathy for
this because when I reviewed a CRA guide dealing with Lifelong Learning Plans
(RC4112(E), Rev.10), I could not find any direct reference to this requirement.
This appears to be unfortunate, but it cannot assist the appellant in this
appeal.
[15]
The appeal will be dismissed.
Signed at Toronto,
Ontario this 12th day of November 2010.
“J. M. Woods”
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