6 May 1999 GST/HST Interpretation HQR00001684 - Definition of "University"

Thank you for your memorandum of March 8, 1999, on the GST status of the supplies made by the above-noted institution. Our comments are set out below.

Statement of Facts

1. The XXXXX established the XXXXX to provide training for students requiring both theological education and professional preparation for ministers and others who serve in church related endeavours. The XXXXX was incorporated under XXXXX[.]

2. The XXXXX offers an undergraduate program with three options, which are as follows:

(a) Certificate of XXXXX[.] This is a one year undergraduate program designed to provide a lay person with a general knowledge of the Bible and theology. Students must be at least 22 years old to enroll in this program;

(b) XXXXX[.] This is a two year undergraduate program designed to equip church leaders and others in related ministries with the necessary tools to accomplish their leadership goals; and

(c) XXXXX[.] This is a two year program designed for those who wish to serve in the field of Christian education and for lay people who desire a biblical and theological education to enhance their ministry in the local church.

3. The XXXX offers three graduate degrees, which are the following:

(a) XXXXX - A baccalaureate degree from an accredited college or university is a prerequisite to this degree. This is a professional graduate degree designed to equip pastors and others in related ministries with the knowledge, skills and attitudes necessary for their calling. This degree program is a survey of all major areas of biblical, theological, historical and practical disciplines related to the Christian ministry. Elective courses address individual interests and enhance preparation for future studies;

(b) XXXXX - This is a graduate degree designed to prepare students to serve in a church ministry. The degree plan accommodates specific concentrations as well as bivocational or volunteer ministry; and

(c) XXXXX - This is a three year program designed for a minister who is currently involved in a full ministry. Since candidates can personalize the focus of their learning, the program is appropriate for individuals involved in all kinds of vocational ministry, including the local church, denominational service, institutional ministry, the mission field and chaplaincy. The program integrates serious academic study with current ministry through seminars, personal supervision and a ministry project.

4. Correspondence courses are available on a limited basis. XXXXX students and XXXXX students are allowed a limited portion of credits to be acquired by correspondence. The tuition fees are the same as on-campus courses, XXXXX[.]

Question No. 1

Does the Seminary meet the definition of "university", as set out in subsection 123(1) of the Excise Tax Act ("the Act").

Response No. 1

The word "university" is defined in subsection 123(1) of the Act as follows:

"'university' means a recognized degree-granting institution or an organization that operates a college affiliated with, or a research body of, such an institution."

Further, in Policy No. P-220, the Department recognizes three categories of domestic entities that will qualify as a university. The first of these is a degree-granting institution that grants degrees at least at the bachelor or equivalent level that is established as a university or a degree granting institution by legislation enacted by the appropriate Canadian jurisdiction in which it is situated.

We rule that the XXXXX as it meets both the statutory definition of that term (i.e. recognized degree-granting institution) and the first category of institutions set out above.

Question No. 2

Does the XXXXX qualify for a rebate of GST, pursuant to section 259 of the Act. If it does, what is the rate of rebate, given the XXXXX is also a registered charity under the Income Tax Act?

Response No. 2

Section 259 of the Act is the legislative authority for the provision of a GST rebate to a university. For the purposes of rebate entitlement, it must be determined whether a university qualifies as a "selected public service body", pursuant to the definition in paragraph 259(1)(c). If a university does fall within paragraph (c) (i.e. a university that is established and operated other than for profit), then reference must be made to subsections 259(3) and 259(4.1) to determine the prescribed rebate percentage applicable to a university's taxable purchases.

Subsection 259(4.1) requires an apportionment of the XXXXX taxable purchases between its activities as a selected public service body and its activities as a registered charity. The rebate applicable to its activities as a university is 67%; the rebate applicable to its activities as a charity is 50% (if there are, in fact, charitable activities). We advise that we do not interpret subsection 259(4.1) to require a further apportionment of the XXXXX[.] That is, the provision does not require an apportionment between degree-granting activities and other activities.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952 -9215.