Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Do tuition fees paid to an entity that is registered as a private career college under the Ontario Private Career Colleges Act, 2005 (PCCA )qualify for the tuition tax credit (TTC) under subparagraph 118.5(1)(a)(i) of the Income Tax Act?
Position: The tuition fees paid by a student to a private career college that is registered under the PCCA in respect of a vocational program that is approved by the Superintendent should be allowed under subparagraph 118.5(1)(a)(i) of the Income Tax Act providing all other requirements for the TTC have been met.
Reasons: A private career college registered under the PCCA is an educational institution. A vocational program that a particular private career college has been approved for by the Superintendent is at a post-secondary level.
November 14, 2012
Claudine Chauret Income Tax Rulings Directorate
Manager Financial Industries Division
Validation Policies and Procedure Section Nancy Shea-Farrow
Individual Returns Directorate 905-721-5099
2012-044539
Tuition Tax Credit Private Career Colleges
This is in response to your e-mail on April 25, 2012 asking if tuition fees paid to an entity that is registered as a private career college under the Ontario Private Career Colleges Act, 2005 (PCCA) qualify for the tuition tax credit (TTC) under subparagraph 118.5(1)(a)(i) of the Income Tax Act (the Act).
The Canada Revenue Agency's general interpretation of the rules governing the TTC are contained in Interpretation Bulletin IT-516R2, "Tuition Tax Credit" (IT-516R2). The TTC, as set out in paragraph 118.5(1)(a) of the Act, is available to a student that was, during a tax year, enrolled at an educational institution in Canada that is:
i) a university, college or other educational institution providing courses at the post-secondary school level, or
ii) certified by the Minister of Human Resources and Skills Development to be an educational institution providing courses, other than courses designed for university credit, that furnish a person with skills for, or improve a person's skills in, an occupation.
The tax credit is available with respect to any fees for the individual's tuition paid in respect of the year to the educational institution if the total of those fees exceeds $100.
Tuition fees paid to a private career college, may qualify under subparagraph 118.5(1)(a)(ii) of the Act providing all the requirements of section 118.5 of the Act are met. In order for a students tuition fees, that are paid to a private career college, to qualify for the TTC under subparagraph 118.5(1)(a)(i) of the Act, a private career college must be either a university, college or other educational institution and provide courses at the post-secondary level.
Educational institution is not defined in the Act.
The Dictionary of Canada Law defines an educational institution as:
1. An institution of learning that offers courses at a post-secondary level. 2. A technical or vocational school, a university, college, or other school of higher education.
According to subsection 1(1) of the PCCA a "private career college" under the PCCA means an educational institution or other institution, agency or entity that provides one or more vocational programs to students for a fee and pursuant to individual contracts with the students. A private career college does not include a college of applied arts and technology established under any Act, a university established under any Act, a school as defined in subsection 1(1) of the Education Act, or a prescribed institution, agency or entity or an institution, agency or entity belonging to a prescribed class.
The PCCA states that a vocational program means instruction in the skills and knowledge required in order to obtain employment in a prescribed vocation.
Under the PCCA the Superintendent registers an applicant to operate a private career college and renews an applicants registration if the Superintendent is satisfied that among other things, that the vocational programs that are provided, or are proposed to be provided, by the private career college meet, or are likely to meet, the requirements of the PCCA and the regulations. The Superintendent is appointed by the Ontario Minister of Training, Colleges and Universities.
A private career college can only provide those vocational programs for which it has received the approval of the Superintendent. An application for approval to provide a specified vocational program must be in a form approved by the Superintendent and contain such information as the Superintendent may require.
A private career college can not make a substantial change to a vocational program that it has approved without the further approval of the Superintendent. The Superintendent may revoke a private career colleges approval to provide a specified vocational program if the Superintendent believes that the program fails to meet certain conditions. The Superintendent also has to approve the credential that the college may grant a student who successfully completes the program. The private career college can offer programs that are not vocational programs.
According to section 26 of the PCCA, Every private career college shall make public, at the times and in the manner determined in accordance with the Superintendent's policy directives, the information required by the policy directives relating to the performance indicators and performance objectives applicable to the college's vocational programs.
Sections 10 and 11 of Ontario Regulation 415/06 to the PCCA discusses the requirements for an application for approval of a vocational program. These requirements include that the application must include the name and a brief description of every subject and module included in the program; the number of hours of instruction required for each subject and module; and a description of the system of evaluation for the program and for every subject and module in it.
Subsections 19 (1), (2) and (3) of Part VI of the Ontario Regulation 415/06 to the PCCA lists the admission requirements for a student into a vocational program at a private career college.
Subsection 35(1) of the Ontario Regulation 415/06 to the PCCA, requires the private career college to issue transcripts and requires very specific information to be on the transcripts.
Section 43 of the Ontario Regulation 415/06 to the PCCA, states that tuition fees are included in the lists of fees charged by the private career college. Tuition is not defined in the Act. The Concise Canadian Oxford Dictionary defines it as a fee paid for education or instruction, especially if paid for.
The description of the operations of a private career college given in the PCCA appears to fit the definition of an educational institution for purposes of the Act as it is an entity that provides its students with an education by instructing them in one or more vocational programs for a fee.
The private career college must provide courses that are at a post-secondary level for the tuition fees paid to the college to qualify under subparagraph 118.5(1)(a)(i) of the Act . Generally, for a course to be considered to be at the post-secondary level the course should provide credit towards a degree, diploma or certificate and a prerequisite for taking the course should be completion of secondary school.
According to section 19 of Ontario Regulation 415/06 to the PCCA the admission requirements for a student to enter into a vocational program at a private career college is the Ontario Secondary School Diploma or its equivalent or be at least 18 years of age or such other age as may be specified and successfully complete a qualifying test that has been approved by the Superintendent.
According to the Ministry of Training, Colleges and Universities website the admission requirements to apply for Ontario college programs is an Ontario Secondary School Diploma. It also states that if you havent completed high school, but are at least 19 years old, you are also eligible to apply for college programs. In addition it states that some programs and schools may have additional requirements.
A particular college of applied arts and technology in Toronto for example, requires that all students in a Canadian province or territory, except Quebec to have a grade 12 diploma. For the province of Quebec Secondary V is required. For applicants who do not have the minimum admission requirements for a Diploma Program but who are at least 19 years of age by the first day of classes may be considered as mature students. The admission department assesses the current academic strengths of mature student applicants by reviewing any completed high school credits or through admission testing. After reviewing the results, the admissions department may recommend direct entry into a program or academic upgrading to help prepare a mature student for their studies.
The admission knowledge requirements to get into a college of applied arts and technology and into a vocational program at a private career college registered under the PCCA appear to be very similar.
According to the Ontario Ministry of Training, Colleges and Universities website, the ministry that is responsible for post-secondary education in Ontario, the private career colleges that are registered under the PCCA offer post-secondary programs throughout Ontario. In addition it states that these colleges offer certificate and diploma programs in many fields.
The Ontario Ministry of Training, Colleges and Universities should be relied upon to determine if a program is at a post-secondary level for private career colleges that are registered under the PCCA in respect of vocational programs that have been approved by the Superintendent for that particular college. The private career college should not have to get another approval from the Human Resources and Skills Development if the entity is an educational institution that provides courses at a post-secondary level. The IT-516R2 states that if the education ministry for the province that the course is given in considers it be at a post-secondary level than it is generally assumed to be at that level.
In conclusion, a private career college registered under the PCCA is an educational institution. A vocational program, that a particular private career college has been approved for by the Superintendent, is at a post-secondary level. The tuition fees paid by a student to a private career college that is registered under the PCCA in respect of a vocational program that is approved by the Superintendent should be allowed under subparagraph 118.5(1)(a)(i) of the Act providing all other requirements for the TTC have been met.
We trust our comments will be of assistance.
Sharmini Ratnasingham
for Director
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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