CRA states that it will follow Fortnum in “factually similar” situations

S. 118.5(1)(b) accords a tuition credit to “a student in full-time attendance at a university outside Canada in a course leading to a degree” subject to exclusions for inter alia fees “paid in respect of a course of less than three consecutive weeks duration.” In the face of conflicting authority, Smith J found jn Fortnum that this requirement was satisfied by a summer session for an MBA program at an Indiana university that consisted of 10 or 11 consecutive courses each of which was of one or two weeks’ duration. When asked about the implications of this decision, CRA first indicated that “the court applied the three consecutive week requirement to the summer semester as a whole, rather than to each individual course in the semester,” and then stated:

Our interpretation of subparagraph 118.5(1)(b)(i) … as explained in paragraph 2.10 of … S1-F2-C2 … has generally not changed as a result of … Fortnum. … [T]his case was heard … under the Informal Procedure … [and] do[es] not have precedential value.

Notwithstanding this, the CRA will consider a course of less than 3 consecutive weeks duration to satisfy the requirement in subparagraph 118.5(1)(b)(i) in situations factually similar to Fortnum.

CRA provided no guidance on what it would regard as “factually similar.”

It is hard to know what to make of the statement in s. 18.28 of the Tax Court of Canada Act that Informal Decisions ”shall not be treated as a precedent for any other case” given that General Procedure cases also may not be followed (as happened in BCS), Well-reasoned decisions of either type are accorded substantial deference. The only ones paying much attention to s. 18.28 are at CRA when dealing with a decision that might require reworking their published positions.

Neal Armstrong. Summary of 3 July 2019 Internal T.I. 2019-0791521I7 under s. 118.5(1)(b)(i).