Citation: 2013 TCC 266
Date: 20130828
Docket: 2012-4922(IT)I
BETWEEN:
PING KAM,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Favreau J.
[1]
The Appellant claimed
tuition credits in relation to examination fees and tuition fees that were paid
in 2004 and in 2006 to 2009 for piano lessons that were taken by the
Appellant’s son with Dr. Boris Konovalov. The credits were transferred to
the Appellant under section 118.9 of the Income Tax Act,
R.S.C. 1985, c. 1 (5th Supp.), as amended (the “Act”).
[2]
In computing his
non-refundable tax credits and tax payable for the 2004 and 2006 to 2009
taxation years, the Appellant did not claim any amounts for the transfer of
examination and tuition fees from his son.
[3]
In 2011, the Appellant
filed T‑1 adjustment requests for the 2004 and for the 2006 to 2009
taxation years to claim the tuition credits from his son as follows:
|
Year
|
Exam Fees
|
Tuition Fees
|
Total
|
|
2004
|
$113
|
$0
|
$113
|
|
2006
|
$394
|
$1,035
|
$1,429
|
|
2007
|
$178
|
$2,160
|
$2,338
|
|
2008
|
$206
|
$2,445
|
$2,651
|
|
2009
|
$627
|
$2,940
|
$3,567
|
[4]
By reassessments dated
January 23, 2012, the Minister of National Revenue (the “Minister”)
allowed only the transfer of examination fees from the Appellant’s son in the
amounts of $178 in 2007, $206 in 2008 and $627 in 2009.
[5]
The Appellant’s 2004
and 2006 income tax returns were initially assessed on April 18, 2005 and
October 22, 2007 (the “Assessments”). The Appellant did not file with the
Minister a Notice of Objection in respect of the Assessments within the time
prescribed by section 165 of the Act, being on or before
April 30, 2006 and April 30, 2008 respectively, nor an application
for an extension of time to file a Notice of Objection in respect of the
Assessments within the time prescribed by paragraph 166.1(7)(a) of
the Act, being on or before April 30, 2007 and April 30 2009
respectively.
[6]
The Appellant filed
with the Minister a Notice of Objection in respect of the Assessments on
March 16, 2012 which was beyond the one‑year time limit for serving
a Notice of Objection.
[7]
At the commencement of
the hearing, the Respondent brought a motion to quash the Appellant’s appeal
with respect to the 2004 and 2006 taxation years and the Court allowed the
motion and quashed the Appellant’s appeal for the 2004 and 2006 taxation years
on the basis that the Appellant’s appeal was not properly introduce before the
Court as the Notice of Objection was not filed within the time prescribed by
the Act.
[8]
The Appellant’s appeals
concern only the tuition fees paid to Dr. Boris Konovalov in 2007, 2008
and 2009.
[9]
The issue in this case
is whether the tuition fees paid were in relation to a post‑secondary
school level course taken at an education institution that provided courses at
this level.
[10]
Subsection 118.5(1)
of the Act provides in part as follows:
(1) For
the purpose of computing the tax payable under this Part by an individual for a
taxation year, there may be deducted,
(a) where the individual was during the year a student
enrolled at an educational institution in Canada that is
(i) a university, college or other educational institution
providing courses at a post-secondary school level, or
(…)
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 the educational institution if the total of those fees
exceeds $100, except to the extent that those fees
(ii.1) are paid to an educational institution described in
subparagraph (i) in respect of courses that are not at the post-secondary
school level,
[11]
To be entitled to the
tuition credits, the Appellant’s son would have to have been enrolled at an
educational institution in Canada that was providing courses at a post‑secondary
level and the amounts paid would have to have been paid for these courses.
[12]
The Appellant testified
at the hearing and he explained that his son was taking private piano lessons
(normally one hour per week) provided by Dr. Boris Konovalov at his piano
studio. Dr. Konovalov was referred to the Appellant’s son by his previous
piano teacher because he was one of the best piano teachers of Edmonton. The music lessons that the Appellant’s son was taking with Dr. Konovalov
were at the Grade 10 Piano level. The levels are established by the Royal
Conservatory of Music.
[13]
During his testimony,
the Appellant also confirmed that Dr. Konovalov was not providing courses
at a university, college or other educational institution providing courses at
a post‑secondary school level and that he was not affiliated nor
associated with any university, college or other educational institution.
[14]
The Appellant raised
two main issues in relation to this matter. The first issue is whether the
piano lessons taken by the Appellant’s son were at the post‑secondary
school level and the second issue is whether Dr. Boris Konovalov’s piano
studio was an educational institution for the purposes of subsection 118.5(1)
of the Act.
[15]
The Appellant’s
position is based on the decision rendered by Webb. J (as he then was) in Marek
D. Tarkowski v. Her Majesty the Queen, 2007 D.T.C. 1555. In that case,
Mateusz Tarkowski was enrolled as a student at the Mississauga School of Music
where he was taking Grade 3 and Grade 4 Harmony and Grade 9
Piano lessons at the school’s premises. He was tutored at the school by a
teacher.
[16]
In order to determine
whether the Mississauga School of Music was an educational institution under
subsection 118.5(1) of the Act, at paragraph 10 of his
decision, Webb. J. referred to the following comments made by Rip J.
(as he then was) in Hillman v. The Queen, 2006 TCC 578:
[12] Although
I have already determined that BAR/BRI is not an educational institution in Canada, it may serve some purpose to consider whether it is an education institution. In Friedland
v. R., Rowe D.J.T.C.C., after noting that there does not appear to be a
universal definition of "educational institution", attempted to
establish the parameters of the definition as it pertains to the Act:
The
Oxford English Dictionary defines "education" as:
3.
the systematic instruction, schooling or training given to the young in
preparation for the work of life; by extension similar instruction or training
obtained in adult age. Also, the whole course of scholastic instruction which a
person has received. Often with limiting words denoting the nature or the
predominant subject of the instruction or kind of life for which it prepares,
as classical, legal, medical, technical, commercial, art education.
and
"institution" as:
7.
an establishment, organization, or association, instituted for the promotion of
some object, esp. one of public or general utility, religious, charitable,
educational, etc., e.g. a church, school, college, hospital, asylum,
reformatory, mission or the like; [...] The name is often popularly applied to
the building of the appropriated to the work of a benevolent or educational
institution.
[13] Black's
Law Dictionary, 6th Edition, defines "educational institution" as
follows:
A
school, seminary, college, university, or other educational establishment, not
necessarily a chartered institution. As used in zoning ordinance, the term may
include not only buildings, but also all grounds necessary for the
accomplishment of the full scope of educational instruction, including those
things essential to mental, moral, and physical development.
[17]
Webb J. determined
that the Mississauga School of Music was an educational institution as it was
providing Mateusz Tarkowski with an education in music. The fact that the
method of teaching was by tutoring and the fact that the Mississauga School of
Music itself did not have examinations did not mean that it was not providing
Mateusz Tarkowski with an education or that he was not taking courses.
[18]
In paragraph 15,
Webb J. determined that the Mississauga School of Music was providing
courses at the post‑secondary school level for the following reasons:
[15] In
this case however the Grade 9 Piano and Grades 3 and 4 Harmony courses that
Mateusz Tarkowski was taking did require the completion of the secondary school
level of music. Since these courses required the completion of the high school
level music courses these courses were at the post-secondary school level. [. .
.]
[19]
The Appellant alleged
here that the piano lessons that Dr. Boris Konovalov provided to his son
from 2006 to 2009 meet all the same conditions as those that the Mississauga
School of Music provided to Mateusz Tarkowski. Since the Grade 10 piano
lessons provided to the Appellant’s son were higher in level than the
Grade 9 lessons that the Mississauga School of Music provided to Mateusz
Tarkowski. They also qualify as post‑secondary level music lessons. The Appellant
sees no reason why the Mississauga School of Music meets the criteria for an
educational institution described in subparagraph 118.5(1)(a)(i) of
the Act, but Dr. Boris Konovalov’s piano studio doesn’t.
[20]
The Respondent’s
counsel alleged that an individual cannot be considered to be an educational
institution for the purpose of subparagraph 118.5(1)(a)(i) of the Act
and he distinguished the Tarkowski decision by pointing out that the
Mississauga School of Music was a school that was teaching the music courses
and that Mateusz Tarkowski was tutored at the school by a teacher.
[21]
The Appellant did not
produce much evidence showing that Dr. Konovalov’s piano studio was in fact a
school of music or an education institution and was organized and operated as
such even if it may not have been a chartered institution or school. No website
information, no business card, no invoice and no receipt were tabled as documentary
evidence. The only information provided by the Appellant on that point was that
Dr. Konovalov’s spouse was also providing music lessons at the studio.
[22]
I do not think that one‑hour
piano lesson per week is sufficient for the Appellant’s son to be considered as
being enrolled at an university, college or other educational institution providing
courses at a post‑secondary level.
[23]
In any event, I am not
bound by the Tarkowski’s decision because it was decided under the
informal procedure and I doubt that Parliament ever intended to allow tuition
credits in a situation like this one in relation to tuition fees paid to a
piano teacher providing private piano lessons from home.
[24]
For these reasons, the
Appellant’s appeals are dismissed.
Signed at Ottawa, Cana da, this 28th day of August 2013.
“Réal Favreau”
Email this Content