Victus Academy – Tax Court of Canada finds that the hockey program provided by a hockey school was (even if a separate supply) an exempt educational service

A for-profit private school took the position that it was providing separate supplies of exempt academic programming and taxable hockey training to its students, so that it could claim input tax credits for its significant costs of providing the hockey-school aspect of its services (including the fees of contractors who provided the training). Monaghan J found that it was unnecessary to decide whether there was a single supply, because even if the academic and hockey program were separate supplies, both were educational services described in Sched. V, Pt. III, s. 2 or s. 3, given that each student came within the definition in Sched. V, Pt. III, s. 1 of an “elementary or secondary school student.”

Regarding the s. 2 exemption, which refers to a “supply made by a school authority … of a service of instructing individuals in a course that is provided primarily for elementary or secondary students,” she found an implication in Sched. V, Pt. III, s. 16 that a “’course’ in Part III includes training in sports and recreational pursuits.”

The s. 3 exemption relevantly refers to a “supply of … services … made by a school authority primarily to elementary or secondary school students during the course of extra-curricular activities organized under the authority and responsibility of the school authority.” The hockey program (being the provision of services through the engagement of the third-party contractors) seemed to qualify as extra-curricular activities since the students were not required to participate (although all did in the reporting periods under appeal).

Neal Armstrong. Summaries of Victus Academy LP v. The Queen, 2020 TCC 134 under ETA Sched. V, Pt. III, s. 2 and s. 3.