2 November 2000 GST/HST Ruling 31559 - Application of the GST/HST to the Supply of University Transfer Courses Offered by a School Authority

Dear XXXXX

Thank you for your letter of May 19, 2000 (with attachments), concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the activities XXXXX (the College).

Statement of Facts

Our understanding of the facts is as follows:

1. The College is a corporation that is registered for GST/HST purposes.

2. The College is registered with the XXXXX[.]

3. The Ministry of Education of XXXXX (the Ministry) has specified duties and powers under the XXXXX and the XXXXX. The public school system in XXXXX consists of XXXXX school districts responsible for operating XXXXX schools under the authority of the XXXXX. The Ministry provides full financial support for these public schools. The independent school system consists of XXXXX schools and consistent with the XXXXX the Ministry provides partial financial support for those independent schools that meet specified standards in a number of areas, including curriculum and teacher certification.

4. The College is not a recognized degree-granting institution. However, courses in the College's University Transfer Program are transferable toward degree completion at Canadian and U.S. universities.

5. The College has three types of educational courses, each with unique admission requirements:

Senior High School Program;

•   courses are part of the Provincial Senior High School Program consisting of Grades 10, 11 and 12;

•   primarily designed to provide students with requirements for admission to colleges, universities and technical institutes (including post-secondary study at the College);

•   courses are certified XXXXX by the XXXXX (the Ministry) which indicates that the courses comply with Ministry instructional time and program requirements;

•   graduates receive a secondary school diploma issued by the Ministry.

Admission Requirements

•   grade 10, 11 or 12 of the Senior High School Program;

•   ability to satisfy English language proficiency standards.

English as a Second Language Program

•   speaking, reading and writing English language skills program for students who want to enter senior high school or university and for visitors and professionals.

Admission Requirements

•   minimum age requirement of 15 years upon commencement of studies;

•   elementary school students accepted into Special Programs when accompanied by parents or chaperones.

University Transfer Program

•   designed for students wishing to earn credits toward a university degree and provides courses at the first and second year university level typical of undergraduate Canadian, American and international universities;

•   all courses are recognized for credit by many universities;

•   course content is modeled on those of XXXXX XXXXX and the College regularly reviews curricula and teaching standards to ensure that academic currency and acceptable university equivalency are maintained.

Admission Requirements

•   XXXXX Secondary School XXXXX Graduation Diploma or equivalent;

•   proficiency in oral and written English.

6. The College also has short term (one to three week) Special Programs which combine English study with holiday activities.

7. The College is not a public college as defined in the Excise Tax Act (the ETA). The College does not receive funding from any government or municipality for the purposes of providing educational services. All funding comes from student fees.

Ruling Requested

1. That the College is a school authority as defined in subsection 123(1) of the ETA.

2. That the university transfer courses offered by the College are exempt supplies under section 7 of Part III of Schedule V to the ETA.

Ruling Given

Based on the facts set out above, we rule that:

1. The College is a school authority as defined in subsection 123(1) of the ETA.

2. The courses offered by the College under the University Transfer Program are exempt under section 7 of Part III of Schedule V to the ETA.

This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series. 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 ETA, or to our interpretative policy; and that you have fully described all necessary facts and transaction(s) for which you requested a ruling.

Explanation

In order to fall within the meaning of "school authority" an organization must operate an elementary or secondary school that provides instruction that meets the standards of educational instruction established by the provincial government.

Since the College operates a secondary school that provides instruction in courses that are certified by the XXXXX (i.e., courses offered under its Senior High School Program), the College falls within the meaning of school authority for GST/HST purposes.

Section 7 of Part III of Schedule V to the ETA sets out an exemption for a supply made by a "school authority", "public college" or "university" of a service of instructing individuals in respect of courses for which credit may be obtained toward a diploma or degree. Since courses offered under the University Transfer Program are recognized for credit by many universities, they are exempt under this provision.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-0420.

Yours truly,

Lorrie McAnulty
Charities, NPO's and Educational Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate