Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
[Addressee]
Trent MacDonald
Rulings Officer
Public Service Bodies and Governments Division
Place de Ville, Tower A
320 Queen Street
Ottawa, ON K1A 0L5
June 4, 2012
Case 133108
Subject: GST/HST Interpretation
Definition of a “university”
This is in response to the [correspondence] you sent […], Rulings Officer, GST/HST Rulings Centre […] on [mm/dd/yyyy], concerning […] [ABC Institution].
You are requesting our opinion of whether or not [ABC Institution] is a university for purposes of the Excise Tax Act (ETA). If, in our opinion, [ABC Institution] is not a university for purposes of the ETA, you would like our comments on whether or not [ABC Institution’s] supplies of instruction in courses that lead to an Associate of […] Degree are exempt supplies pursuant to section 8 of part III of Schedule V to the ETA.
Our understanding of the situation from your [correspondence], [ABC Institution’s] website, the […] Act of […] ([…] [Province X]) and the […] [Province X System] is as follows:
[ABC Institution] is a private educational institute […].
[ABC Institution] received permission from the Minister of […] [Province X] Education to offer the Associate of […] degree […]. […]
The Associate of […] and Associate of […] Degrees are provincial credentials offered by many institutions in the […][Provincial X System]. The associate degree is designed to provide an educational experience that prepares students life as an educated person, and to lay a solid foundation for further study.
The Glossary of Terms in the [Province X System] provides the following meanings for the terms “degree”, […]: […] [Terms from the Province X System]
According to [ABC Institution’s] website [direct quote]
Associate of […] Degree Requirements
[ABC Institution] Courses […]
The term degree is defined in […] the […] Act of [Province X]. It states:
In this Act "degree" means recognition or implied recognition of academic achievement that
(a) is specified in writing to be an associate, baccalaureate, masters, doctoral or similar degree, and
(b) […].
[ABC Institution] has not made an election under section 8 of Part III of Schedule V to the ETA.
[…] [Interpretation Requested]
The ETA defines a university in subsection 123(1) of the ETA to mean, “a recognized degree-granting institution or an organization that operates a college affiliated with, or a research body of, such an institution”. The […] Act of [Province X] defines a degree (in part) to mean “recognition or implied recognition of academic achievement that is specified in writing to be an associate, baccalaureate, masters, doctoral or similar degree…”. […] [Is] [ABC Institution] […] a university by virtue of it being a "degree-granting institution".
[…] [Interpretation Given]
The Canada Revenue Agency’s position on Canadian universities, stated in GST/HST Policy Statement P-220 “Domestic entities that qualify as a "University" in the Excise Tax Act”, is that there are three categories of domestic entities that will qualify as a university. The first of those three categories is, “a degree-granting institution that grants degrees at least at the bachelor or equivalent level that is established as a university or degree-granting institution by legislation enacted by the appropriate Canadian jurisdiction in which it is situated”. The CRA does not consider an associate degree to be a degree at the bachelor or equivalent level.
In addition, we could find no evidence that [ABC Institution] has been established as a university or degree-granting institution by legislation enacted by the appropriate Canadian jurisdiction. We are therefore of the opinion that [ABC Institution] is not a university for purposes of the ETA.
Conclusion
[ABC Institution] is not a “university” for purposes of the ETA.
Additional Information
Section 1 of Part III of Schedule V to the ETA defines the term vocational school. It states (in part):
“vocational school” means an organization that is established and operated primarily to provide students with correspondence courses, or instruction in courses, that develop or enhance students’ occupational skills.
It is a question of fact whether or not an organization is established and operated primarily to provide students with correspondence courses, or instruction in courses, that develop or enhance student’s occupational skills.
A review of the facts indicates that [ABC Institution] operates primarily to offer instruction in courses that are designed for university credit at the first and second year level and to prepare students for further education rather than to provide instruction in courses that develop or enhance occupational skills.
Therefore we are of the opinion that [ABC Institution] is not a vocational school for purposes of the ETA and section 8 of Part III of Schedule V to the ETA is not applicable.
Please note that even if [ABC Institution] were a vocational school for purposes of the ETA, the instruction in courses offered by [ABC Institution] would not be exempt as they do not lead to certificates, diplomas, licences or similar classes or ratings in respect of licences that attest to the competence of individuals to practise or perform a trade or vocation.
It is our opinion that [ABC Institution] is not a vocational school. A supply made by [ABC Institution] of instructing individuals in courses that lead to the Associate of […] Degree is not an exempt supply pursuant to section 8 of Part III of Schedule V to the ETA therefore it is taxable for purposes of the GST/HST.
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