24 March 1988 Income Tax Severed Letter 5-5449 - [Child Care Expenses]

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.

XXXX

R. B. Day (613) 957-2136

MAR 24 1988

Dear XXXX

We are writing in reply to your letter of January 26, 1988, wherein you requested our views as to which costs incurred, in the following hypothetical situations, would qualify as child care expenses as defined in paragraph 63(3)(a) of the Income Tax Act (the "Act").

1. A child is enrolled in a weekly hockey school or camp. The parents bring the child to a local hockey arena in the morning and then pick the child up later in the afternoon. The child either brings his lunch or is supplied with a lunch. The hockey instructor (often school teachers on summer vacation) supervise the children's activities during the day. Usually, there is a hockey session on the ice in the morning and in the afternoon. There may also be other activities such as swimming and baseball. The normal cost for these camps range between $ 150 to $ 300 per week per child.

2. There are other similar hockey schools except the entire day is devoted to hockey: on ice instruction, classroom instruction, video film analysis, etc. The instructors are usually more qualified than the instructors in 1 above. Sometimes the instructors are NHL players or coaches. The cost for this type of hockey school is usually higher, $250 and upwards per week per child.

3. Another situation is where a child is enrolled in a weekly hockey school located in another city or town. The parents drive the child to the location on the weekend and pick the child up at the end of the week. The child is supplied with meals, board and lodging during the week. The activities at these camps are primarily hockey related: on ice-instruction, classroom instruction, video analysis, etc. The instructors are usually well known NHL hockey players or coaches. The cost for this type of hockey camp ranges between $ 400 and upwards per child per week. Approximately 1/3 of the total weekly cost is in respect of meals and lodging. In some cases, the hockey school may be local but the child may prefer to board and lodge at the hockey school with the other children instead of staying with his parents.

In all of the above situations, you have assumed that both of the parents have full time jobs and otherwise satisfy the conditions under section 63. In some cases, the parents may have to pay for child care services during the week if their children were not attending these hockey schools or camps.

Similar schools and camps are also available for other sports (such as tennis, computers, music, baseball, football, etc.). You presume the same income tax treatment would be accorded to payments for these other schools or camps. It is our opinion that, to the extent that the hockey school costs represent lodging to a maximum of $60 for each week attended, such costs would qualify as child care under paragraph 63(3)(a) of the Act. Since the other costs relate to the actual education and training of the student, these costs would not qualify as child care expenses by virtue of subparagraph 63(3)(a)(iv) of the Act. The above comments would apply equally to other situations set out in the concluding paragraph of your letter.

Yours truly,

for Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch