Date: 19980420
Docket: 97-2404-IT-I
BETWEEN:
MARC DROUIN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Guy Tremblay J.T.C.C.
Point at issue
[1] According to the Notice of Appeal and the Reply to the
Notice of Appeal, the question is whether the appellant was
entitled, in calculating his income for the 1995 taxation year,
to claim $7,000 as a tax credit for tuition at the Institut
ÉCO-Conseil de Strasbourg in France.
[2] According to the respondent, the Institut is not a
university. In s. 118.5(1)(b), the Income Tax
Act ("the Act") allows this credit only for a
university outside Canada.
Burden of proof
[3] The appellant has the burden of showing that the
respondent's assessment is incorrect. This burden of proof
results from several judicial decisions, including the judgment
of the Supreme Court of Canada in Johnston v. Minister of
National Revenue.[1]
[4] In that judgment, the Court held that the facts assumed by
the respondent in support of the assessments or reassessments are
also presumed to be true until the contrary is shown. In the
instant case the facts assumed by the respondent are set out in
subparagraphs (a) to (d) of paragraph 4 of the Reply to
the Notice of Appeal. That paragraph reads as follows:
[TRANSLATION]
4. In making this reassessment for the 1995 taxation year the
Minister took into account inter alia the following
facts:
(a) the appellant submitted a tuition certificate signed by an
officer of a foreign school known as the Institut
ÉCO-Conseil de Strasbourg in France, in the amount
of $7,000; [admitted]
(b) the appellant attended a foreign school in the 1995
taxation year; [admitted]
(c) the Institut ÉCO-Conseil de Strasbourg in
France is not a university outside Canada; [denied]
(d) the appellant is accordingly not entitled to the tuition
fees in the amount of $7,000 from the Institut
ÉCO-Conseil in calculating non-refundable tax
credits for the 1995 taxation year. [denied]
Evidence of facts
[5] The appellant testified that in addition to studying at
the Institut ÉCO-Conseil de Strasbourg in France he
also studied at the École nationale supérieure des
arts et industries de Strasbourg (ENSAIS). This school trains
engineers and architects. The appellant earned the [TRANSLATION]
"Master’s Degree, Eco-Adviser, Environmental
Analysis and Management" in the 1995 session
(Exhibit A-2).
[6] This Master’s Degree is signed by the president of
the Institut ÉCO-Conseil,
Jean-Pierre Massue, and by the director of ENSAIS,
André Colson.
[7] The appellant confirmed what he had stated in his Notice
of Appeal:
[TRANSLATION]
· A foreign post-secondary teaching institution which
is recognized for the purposes of the Quebec Ministère de
l'Éducation's loans and grants program should be
recognized by Revenue Canada for purposes of the tuition tax
credit.
· The Direction générale de l'aide
financière aux étudiants of the Quebec
Ministère de l'Éducation recognized the foreign
institution attended, namely the Institut pour le Conseil en
environnement de Strasbourg, in 1994. It assigned that body an
institution number for the purposes of its loans and grants
program, namely 08686-A.
· The program taken abroad was recognized for
equivalency purposes by the Director of the master’s in
environmental sciences, program of the University of Quebec at
Montréal (UQAM).
[8] The respondent maintained that the two schools which the
appellant had attended in France and where he obtained his
Master’s Degree were not regarded as universities outside
Canada within the meaning of s. 118.5(1)(b) of the
Act. She referred to Schedule VIII of the Income Tax
Regulations.
[9] In the respondent's submission, to be regarded as such
within the meaning of those provisions the educational
institutions must have been accepted for this purpose by Revenue
Canada (s. 3503 of the Income Tax Regulations):
3503. For the purposes of
subparagraph 110.1(1)(a)(vi) and
paragraph (f) of the definition "total
charitable gifts" in subsection 118.1(1) of the Act,
the universities outside Canada named in Schedule VIII are
hereby prescribed to be universities the student body of which
ordinarily includes students from Canada.
Schedule VIII
3. The universities situated in France that are prescribed by
section 3503 are the following:
American University in Paris, Paris
Catholic Faculties of Lille, Lille
Catholic Faculties of Lyon, Lyon
Catholic Institute of Paris, Paris
École Nationale des Ponts et Chaussées,
Paris
European Institute of Business Administration (INSEAD),
Fontainebleau
Hautes Études Commerciales, Paris
Paris Graduate School of Management, Paris
University of Aix-Marseilles, Aix-en-Provence
University of Paris, Paris
[10] Accordingly, it appears that the list of institutions or
schools appearing in Schedule VIII of the Income Tax
Regulations concerns the application of
s. 110.1(1)(a)(vi) and (f) to charitable
gifts. There is nothing in the Income Tax Act and
Regulations providing that the list in Schedule VIII of the
Regulations applies to s. 118.5(1)(b).
[11] Additionally, Interpretation Bulletin IT-516R2 of
December 9, 1996, which does not have the force of law,
casts some light on the implementation of
s. 118.5(1)(b) of the Act. It reads as follows:
Educational Institutions Outside Canada
5. The types of educational institutions outside Canada whose
fees are eligible for the tuition tax credit are described in
paragraphs 118.5(1)(b) and 118.5(1)(c).
Paragraph 118.5(1)(b) refers to (full-time attendance
at) "a university outside Canada in a course leading to a
degree". An educational institution located in a country
outside Canada is presumed to qualify for purposes of
paragraph 118.5(1)(b) if it is recognized by an
accrediting body (that is nationally accepted in that country) as
being an educational institution which confers degrees at least
at the bachelor or equivalent level (see ¶ 9(a) below).
For example, an institution listed in the current edition of
Accredited Institutions of Postsecondary Education
published by the American Council on Education and indicated in
that publication as being an institution granting degrees at the
"B" level (bachelor's degree or equivalent),
"M" level (master’s degree or equivalent),
"D" level (doctoral degree) or "P" level
(first professional degree such as J.D., M.D. or M.Div.) will be
regarded as a university that qualifies under
paragraph 118.5(1)(b). Also, an institution listed in
Schedule VIII of the Income Tax Regulations is
recognized as satisfying the requirements of
paragraph 118.5(1)(b).
[12] Accordingly, a school or institution listed in
Schedule VIII is recognized as satisfying the requirements
of s. 118.5(1)(b), but that is not the only test.
Thus paragraph (9) of the same Bulletin reads as follows:
9. A student at an educational institution outside Canada
described in paragraph 118.5(1)(b) or (c) may
claim a tuition tax credit for the tuition fees paid for the year
to that institution in the circumstances and to the extent set
out below:
(a) An individual who is, during the year, a student in
full-time attendance (see ¶ s 10 to 12 below) at a
university outside Canada in a course leading to a degree at not
lower than the bachelor or equivalent level may claim under
paragraph 118.5(1)(b) a tuition tax credit for any
tuition fees paid for the year to that university, provided that
the fees are for a course of not less than 13 consecutive
weeks in duration (see ¶ 24 below). However, tuition
fees do not qualify under paragraph 118.5(1)(b) to
the extent that they
* are paid by the student's employer on his or her behalf
and are not included in the student's income tax return,
or
* are paid on the student's behalf by the employer of the
student's parent and are excluded from the parent's
income under subparagraph 6(1)(b)(ix).
[13] With respect to the value of the courses, the appellant
filed a letter from Patrick Béron, Director,
Master’s in environmental sciences, at the
Université du Québec à Montréal. The
letter of March 28, 1994, addressed to the appellant, read
as follows:
[TRANSLATION]
Dear Sir:
Further to your intention of going to study for about a year
at the Institut pour le Conseil en environnement à
Strasbourg (France), I confirm that according to the
documentation I have been able to consult the education provided
by that Institut meets the requirements of the Master’s in
environmental sciences. The teaching content of the various
modules is equivalent to the courses we provide and on your
return I will have no problem recognizing those courses for your
Master’s degree.
[14] The appellant obtained a [TRANSLATION]
"Master’s Degree, Eco-Adviser, Environmental
Analysis and Management". This document is "not lower
than the bachelor . . . level"
(Interpretation Bulletin IT-516R2, para. 9(a), quoted
supra in paragraph [12]). When the Act is ambiguous,
the Court may take into account an oral or written opinion stated
by the respondent (Interpretation Bulletin) as a basis for its
decision.[2]
[15] It is true that the institutions where the appellant
studied do not have "university" in their names. Over
40 percent of the American institutions listed in
Schedule VIII of the Regulations are "colleges"
and "schools".
[16] There is nothing in the Income Tax Act or
Regulations providing that the list of institutions in
Schedule VIII comprises the only test to be used in applying
s. 118.5(1)(b).
[17] In the Court's opinion the weight of the evidence is
in favour of the argument made by the appellant.
Conclusion
[18] The appeal is allowed with costs and the assessment is
referred back to the Minister of National Revenue for
reconsideration and reassessment.
Signed at Québec, Quebec, April 20, 1998.
Guy Tremblay
J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
Translation certified true on this 14th day of December
1998.
Kathryn Barnard, Revisor
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