Principal Issues: An unlimited liability company (Canco) incorporated on XXXXXXXXXX is a wholly owned subsidiary of U.S. Holdco. U.S. Holdco is incorporated under the laws of a state in the United States and is a wholly owned subsidiary of a university (Universityco) outside Canada. Canco is currently a registered institution pursuant to the XXXXXXXXXX which authorizes Canco to teach courses in XXXXXXXXXX at the post-secondary school level. Universityco intends to apply for registration pursuant to the XXXXXXXXXX and intends to operate an educational facility in Canada through a branch. Upon completion of required courses, degrees will be granted by Universityco, the university outside Canada. Universityco has applied for ministerial consent pursuant to the XXXXXXXXXX. All tuition fees will be paid to Universityco.
1. Does Universityco qualify as an educational institution in Canada for the purposes of paragraph 118.5(1)(a) of the Act?
2. Does Universityco qualify as an “other educational institution providing courses at a post-secondary school level” for the purposes of subparagraph 118.5(1)(a)(i) of the Act?
3. Will an individual be able to deduct, for a taxation year, an amount equal to the product obtained when the appropriate percentage for the year is multiplied by the amount of any fees for the individual’s tuition paid in respect of the year to Universityco, provided that the total fees exceed $100 and provided that none of the exceptions contained in subparagraphs 118.5(1)(a)(ii.1) through (v) of the Act are applicable?
Position:
1. Yes.
2. Yes.
3. Yes.
Reasons:
1. and 2. Universityco will qualify as an educational institution in Canada for the purposes of paragraph 118.5(1)(a) of the Act if Universityco becomes a registered educational institution pursuant to the XXXXXXXXXX and as such, Universityco will be authorized to teach courses in XXXXXXXXXX at the post-secondary school level.