File: 11905-3(DRM)
Do: 2532 S.9/Pt.III/Sch.V
XXXXX GST # XXXXX
January 29, 1996
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Subject:
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Section 9 of Part III of Schedule V
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Dear XXXXX
I refer to your letter of October 12, 1995 to Ms. Joanne Houlahan concerning the application of section 9 of Part III of Schedule V to the Excise Tax Act (the ETA) to programs offered by the XXXXX.
Our understanding of the facts (the transactions and purpose of the transactions) is as follows:
Facts
1. XXXXX is a privately controlled, for profit organization.
2. XXXXX is intended to provide computer training to children ages 3 to 12 through its' learning centres and outreach program in daycare centre and schools.
3. XXXXX teaches all aspects of computer science, including word processing, data base management, desk top publishing, and animation, among others.
4. XXXXX curriculum and education programs are designed to(sic) ensure that all children are computer friendly and computer literate in preparation for the technological world of their future.
5. XXXXX is allowed the use of a classroom in some schools in order to provide its courses.
6. The instructors of the courses provided at the public schools are employees of XXXXX[.] Materials used in the courses; computers, software, and books, are all provided by XXXXX[.]
7. Parents whose children participate in the courses are billed directly by XXXXX for the service.
8[.] XXXXX currently provides its courses to children enrolled in grade 8 and under.
9. The Department of Education for XXXXX (Department of Education) establishes the curriculum for the elementary and junior high school as well as the required credit courses needed to obtain a Provincial High School Completion Certificate.
10. Courses offered by the schools in XXXXX at the elementary and junior high school levels are not credit courses, however these courses form part of the curriculum designated by the Department of Education for completion of these grade levels. Courses taught in high school are for credit towards the aforementioned certificate.
11. The Department of Education does not include computer courses as a part of it's curriculum for graduation from elementary school. In the publication entitled XXXXX put out by the Department of Education, the following commentary is made regarding computer education at the elementary level:
"Students at the elementary level should have access to the computer as a tool for written expression, for illustration and for developing thinking. It is not intended that a separate computer unit or course be offered at the elementary level. Rather, a computer should be among the tools available to a learner to be used when appropriate".
12. Similarly, the Department of Education does not provide computer courses in the junior high schools. In the publication "Public School Programs", these comments are made regarding the use of computers in junior high school:
"Learners in the junior high years should begin to formalize their experiences and understanding of microcomputer technologies. Students should
• become confident and knowledgeable users of a microcomputer and its peripheral components;
• continue to develop the ability to use a microcomputer for written communication;
• begin to use the microcomputer to store, retrieve, and manipulate information;
• begin to develop an informed awareness of the issues surrounding the evolving technologies.
Computer education is not a subject area like mathematics or science or language arts. Rather, it concerns the acquisition of a collection of skills, attitudes, and knowledge that together enhance the learning and teaching of the full curriculum. It is recommended that if students have not been introduced to using word processing in elementary school, they receive instruction in grade 7. Reinforcement of the early experiences and extensions of these experiences could take place in grade 8. By grade 9, students should be able to produce written work using available word processing programs. It is recommended that students be introduced to the use of a database system using curriculum-based data and information before the end of grade 8."
13. In both the elementary and junior high schools, the Department of Education does not specifically provide for computer courses to be offered as part of the school curriculum. The approach utilized at both levels is one of integration of technology across all subject areas. In other words, the computer is a tool to be used in the teaching and learning process across various subjects, but computer courses are not a specified subject area.
14. As a part of its commitment to include and use computers in the classroom the Department of Education has provided two publications to assist with the integration of computers in the classroom. The publications "XXXXX are to help with the integration of computers as tools in the classroom.
15[.] The Department of Education provides that only courses listed in the publication XXXXX or pilot courses approved by the Department of Education are recognized as credits towards a Provincial High School Completion Certificate.
16[.] Two computer courses are offered for credit at the high school level XXXXX[.] Both courses are designed for students who have a particular aptitude and/or interest in the study of computers.
17. In XXXXX, courses that are approved for credit and the curriculum used in the schools are approved by the Department of Education and not by a school authority. It is our administrative position that the credit courses and the curriculum should be considered to be approved or designated by a school authority.
Issue
Are the courses offered at the public school by XXXXX to children in grade 8 and below exempt of GST pursuant to section 9(a) of Part III of Schedule V to the ETA?
Ruling
Based on the facts set out above we rule that the service of instructing children in a computer courses offered by XXXXX does not fall within the exempting parameters of section 9 of Part III of Schedule V to the ETA. It is our opinion that the supply of instruction in computers made by XXXXX is not in respect of a course that is approved for credit by, or that follows a curriculum designated by, a school authority in XXXXX. Therefore the supply of computer instruction provided by XXXXX will be taxable.
This ruling is subject to the general limitations and qualifications outlined in the GST Memoranda Series (1.4). We are bound by this ruling provided that none of the above issues is currently under audit, objection or appeal, that there are no relevant changes in the future to the Excise Tax Act, and that you have fully described all necessary facts and transactions for which you requested a ruling.
Analysis
In XXXXX, computer education at the elementary and junior high school levels is accomplished by integration of technology across all subject areas. Computer courses are not offered as a part of the elementary and junior high school curriculum. Private instruction or tutoring in a computer course, in the province, may only be exempt where the service of instructing or tutoring pertains to either XXXXX which are approved to be offered for credit in provincial high schools.
Since computer courses are not offered as part of the elementary and junior high school curriculum, the service of instructing children in computer courses provided by XXXXX may only be exempt if the instruction was in respect of the credit courses XXXXX. Information submitted by XXXXX does not satisfactorily demonstrate that the courses offered satisfies the requirement and content of either XXXXX.
If you have any questions or comments, please do not hesitate to contact Joanne Houlahan, Manager, Public Service Bodies, at (613) 954-7945 or Dwayne Moore, Tax Policy Officer, at (613) 954-4206.
J.A. Venne
Director
Special Sectors
GST Rulings & Interpretations
c.c.: D. Moore
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