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Citation: 2004TCC313
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Date: 20040421
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Docket: 2003-3628(IT)I
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BETWEEN:
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CHRISTINE M. WELLINGTON,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
Bowie J.
[1] This appeal is brought from an
assessment for income tax for the year 2001. The Appellant says
that the Minister of National Revenue was wrong to deny her a tax
credit of $9,137 that she claimed for tuition fees she had paid
to Finch University of Health Sciences/The Chicago Medical School
(Finch University) in Chicago, Illinois, U.S.A. for a course that
she pursued through the medium of the Internet. The main issue in
the appeal is the meaning to be given to the verb "to commute"
(faire régulièrement la navette) as it is used in
subparagraph 118.5(1)(c)(ii) of the Income Tax Act
(the Act). The Appellant also argues that she should be
given the tax credit because she inquired of an official of the
Canada Customs and Revenue Agency (CCRA) prior to enrolling in
the course of study, and she was assured that she would be
entitled to the credit that she claims.
[2] The facts are not in dispute. The
Appellant works for the Sandwich Community Health Centre as a
dietitian. She has a degree in dietetics from the University of
Western Ontario, and she is a registered member of the Ontario
College of Dietitians. It is a requirement of her job that she
continue to be a registered member of the College, and that in
turn requires that she regularly pursue continuing education
courses. She also considers that her career path may some day
lead her into teaching at the university level, for which she
would require a post-graduate degree in dietetics. These
considerations led her in 2001 to consider enrollment in a
program leading to a Master's degree. A number of factors, none
of which are relevant here, led her to conclude that her
interests would be best served by enrolling in a distance
learning course at Finch University. All the classes and seminars
for this course were given interactively via the Internet, and
papers and exams were conducted the same way. To obtain her
degree the Appellant was required to complete 11 courses over six
semesters. This required her to spend as much as 4 hours each
evening, five evenings per week, and longer on weekends, at her
computer terminal. She began the course in September, 2001. The
first semester lasted 13 weeks, with a break of one week between
the eleventh and twelfth weeks.
[3] The course was an expensive one,
and the Appellant's employer did not contribute to the cost of
it, so before enrolling she investigated the income tax
implications. She was unable to testify as to the name of the
CCRA official with whom she spoke by telephone, but I believe her
evidence that he told her that she would be entitled to both a
tuition credit under section 118.5 and an education credit under
section 118.6 of the Act if she took the course. I have no
doubt that this advice had an influence on her decision to
enroll. She was therefore surprised and disappointed when the
Minister reassessed her in September 2002 to deny her both tax
credits, and not much mollified by a subsequent reassessment in
March 2003 that restored to her the relatively paltry credit
under section 118.6, but not the much more significant one for
tuition fees that section 118.5 provides.
[4] The relevant provision of the
Act reads:
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)
...
(c) where the
individual resided throughout the year in Canada near the
boundary between Canada and the United States if the
individual
(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,
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 educational institution if the total of those fees exceeds
$100, except to the extent that those fees
(iii) are paid on the
individual's behalf by the individual's employer and are
not included in computing the individual's income,
(iv) were included as part
of an allowance received by the individual's parent on the
individual's behalf from an employer and are not included in
computing the income of the parent by reason of
subparagraph 6(1)(b)(ix).
118.5(1) Les montants suivants sont déductibles
dans le calcul de l'impôt payable par un particulier en
vertu de la présente partie pour une année
d'imposition :
a)
[...]
c) si,
tout au long de l'année, le particulier réside
au Canada près de la frontière entre le Canada et
les États-Unis et si :
(i) d'une
part, il est inscrit à un moment de l'année
à un établissement d'enseignement situé
aux États-Unis - université, collège ou
autre - offrant des cours de niveau postsecondaire,
(ii) d'autre
part, il fait régulièrement la navette entre sa
résidence et cet établissement,
le produit de la multiplication du taux de base pour
l'année par le total des frais de scolarité
payés à l'établissement pour
l'année si ces frais dépassent 100 $ et
à l'exception des frais :
(iii) soit qui ont
été payés pour son compte par son employeur
et ne sont pas inclus dans le calcul de son revenu,
(iv) soit qui font partie
d'une allocation que son père ou sa mère a
reçue pour son compte d'un employeur et ne sont pas
inclus dans le calcul du revenu de son père ou de sa
mère par application du sous-alinéa
6(1)b)(ix).
[5] The Appellant raised these
issues:
(i) Does a person who pursues a
course at a distant university by interaction through the medium
of the Internet "commute" to that university?
(ii) In the alternative, is the
Appellant entitled to the credit that she seeks by reason of the
assurances given to her by a representative of CCRA in answer to
her inquiry?
[6] The Appellant's position is
that the word "commute" has evolved to include
"telecommute." The Appellant cites the 1958 edition of
the Oxford International Dictionary of the English
Language which defines commute as "to change, to
exchange, to interchange". The Appellant also argues that
the "spirit and intent" of the Act supports her
position. The Appellant relies on a letter from the Minister of
Finance who describes the purpose of the tuition tax credit as
helping "Canadians gain or update work skills".
Similarly, "telecommuting" is equivalent to
"teleworking" which is a method of working recognized
in a publication of Human Resources and Development Canada.
Lastly, the Appellant notes that the Treasury Board Secretariat
has established a telework policy for its employees.
[7] The Respondent's position is
that completing courses via the Internet, or
"telecommuting", does not form part of the definition
of "commute." Rather, the word "commute"
refers to travelling daily back and forth from one location to
another. The Respondent relies on a dictionary definition and the
French version of subparagraph 118.5(1)(c)(ii). In
addition, the restrictive nature of section 118.5 indicates that
had Parliament intended the tuition credit to be available for
Internet-based post-secondary programmes, it would be set
out specifically.
[8] The Respondent argues that the
advice the Appellant received from the CCRA about her eligibility
for the tuition credit was incorrect. Notwithstanding this fact,
however, the Minister and the Court must apply the law as
Parliament wrote it.
[9] Paragraph 118.5(1)(c)
provides for a tuition credit where the taxpayer:
(i) lives near the Canada-U.S.
boundary;
(ii) is a student enrolled at an
educational institution in the U.S. that is a university, or
other institution, providing post-secondary courses; and
(iii) commuted to that educational
institution in the U.S.
It is not disputed that the Appellant satisfies the first two
requirements of paragraph 118.5(1)(c).
[10] In construing a statute, the preferred
approach is to determine the ordinary meaning of the words used
and to read them in light of the statutory context in which they
appear.[1] Absent
any ambiguity, the plain meaning of the words must be applied.[2]
[11] "Commute" is not defined in
the Act. I find that for subparagraph
118.5(1)(c)(ii) "commute" requires the physical
movement of the taxpayer from Canada to the educational
institution in the United States and then back to Canada on a
regular basis and does not include "telecommute". This
means travel back and forth between the two countries on a daily
or weekly basis.[3]
[12] The Canadian Oxford Dictionary
defines commute as "travel to and from one's daily work,
esp. from suburbs to the centre of a city by car or public
transit." Notably, this same dictionary defines
"telecommute" separately. The French language version
of subparagraph 118.5(1)(c)(ii) refers to "il fait
régulièrement la navette entre sa résidence
et cet établissement". The Collins Robert French
Dictionary defines "faire la navette" as "to
commute between, to operate a shuttle (service) between".
This phrase clarifies that Parliament intended physical movement
on a regular basis.
[13] Completing courses at an educational
institution through the exchange of information via the Internet
is not the same as physically travelling back and forth between
Canada and the U.S. Parliament has given extensive consideration
to the circumstances under which a taxpayer will qualify for the
tuition credit in section 118.5. If Parliament had intended
the tuition credit to be available to taxpayers who complete
their education by staying in Canada and telecommuting via the
Internet to an educational institution in the U.S., they would
have put that in the provision.
[14] The Appellant argues that it is within
the spirit and intent of the Act that "commute"
should be understood to include "telecommute".
Interpreting the word this way would reflect the views and
policies of federal government. Unfortunately, while I commend
the efforts of the Appellant to seek out this information, I can
attach no legal significance to it, because neither the English
nor the French version of the statute is ambiguous.
[15] I accept the evidence that the
Appellant was given advice by an agent of the CCRA reassuring her
that she would qualify for the tuition credit if she enrolled in
the programme at Finch University. The Appellant, in effect,
makes an estoppel argument that because of the advice she
received, the Minister is precluded from denying her the tuition
credit under paragraph 118.5(1)(c).
[16] The agent of CCRA gave the Appellant
wrong advice. A taxpayer's obligation to pay tax is not
vitiated if the Minister has negligently advised the taxpayer
that he or she will not have to pay tax. Justice Pigeon, in
Canada (Minister of National Revenue) v. Inland Industries
Ltd.,[4] stated
the rule in terms particularly relevant to the current case:
"...the Minister cannot be bound by any approval given
when the conditions prescribed by law were not met".
[17] The Internet has, and will no doubt
continue, to transform the nature of education and work. It might
be time for Parliament to re-examine subparagraph
118.5(1)(c)(ii) to reflect this transformation. However,
until such time, I must apply the ordinary meaning of the words
in the provision. Therefore, in spite of the advice that the
Appellant received from the agent at CCRA as she did not meet the
condition of subparagraph 118.5(1)(c)(ii) that she
"commute" to the educational institution in the United
States, I must dismiss the appeal.
Signed at Ottawa, Canada, this 21st day of April, 2004.
Bowie J.
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