Citation: 2011TCC329
Date: 20110705
Docket: 2011-66(IT)I
BETWEEN:
GREGORY A. LOWRY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Webb, J.
[1]
The Appellant’s appeal
was heard immediately following the appeal in Abdalla v. The Queen,
2011 TCC 328. While the issue in both cases was whether the fees paid for
courses provided by a university in the United States that were taken online
would qualify for the tuition credit, the facts were not the same. The
Appellant in this case claimed a tuition credit pursuant to section 118.5 of
the Income Tax Act (the “Act”) and the credits pursuant to
section 118.6 of the Act (which are referred to as the education and
textbook credits). The Appellant was enrolled as a student at Walden University which is located in Phoenix,
Arizona. The Appellant was taking courses, online, that would lead to a Masters
degree.
[2]
Subsection 118.5(1) of
the Act provides for a tuition credit and this subsection provides in
part as follows:
118.5 (1) For the purpose of computing the tax payable under this
Part by an individual for a taxation year, there may be deducted,
…
(b) where the individual was during the year a student in
full-time attendance at a university outside Canada in a course leading to a
degree, 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 university, except any such fees
(i) paid in respect of a course of less than 13 consecutive weeks
duration,
[3]
Subsection 118.6(2) of
the Act provides for education and textbook credits and this subsection
provides in part as follows:
(2) There may be deducted in computing an individual's tax payable
under this Part for a taxation year the amount determined by the formula
A × B
where
A is the appropriate percentage for the year; and
B is the total of the products obtained when
(a) $400 is multiplied by the number of months in the year
during which the individual is enrolled in a qualifying educational program as
a full-time student at a designated educational institution, and
(b) $120 is multiplied by the number of months in the year
(other than months described in paragraph (a)), each of which is a month
during which the individual is enrolled at a designated educational institution
in a specified educational program that provides that each student in the
program spend not less than 12 hours in the month on courses in the program,
if the enrolment is proven by filing with the Minister a certificate
in prescribed form issued by the designated educational institution and
containing prescribed information and, in respect of a designated educational
institution described in subparagraph (a)(ii) of the definition
“designated educational institution” in subsection (1), the individual has
attained the age of 16 years before the end of the year and is enrolled in the
program to obtain skills for, or improve the individual's skills in, an
occupation.
(2.1) If an amount may be deducted under subsection (2) in computing
the individual's tax payable for a taxation year, there may be deducted in
computing the individual's tax payable under this Part for the year the amount
determined by the formula
A × B
where
A is the appropriate percentage for the year; and
B is the total of the products obtained when
(a) $65 is multiplied by the number of months referred to in
paragraph (a) of the description of B in subsection (2), and
(b) $20 is multiplied by the number of months referred to in
paragraph (b) of that description.
[4]
Whether the individual
is a full-time student (and entitled to the credit as provided in paragraph 118.6(2)(a)
of the Act) or a part‑time student (and entitled to the credit as
provided in paragraph 118.6(2)(b) of the Act), the student must be
enrolled at a designated educational institution. A designated educational
institution is defined in subsection 118.6(1) of the Act, for a
university outside Canada, as follows:
“designated educational institution” means
…
(b) a university outside Canada at which the individual referred to
in subsection (2) was enrolled in a course, of not less than 13 consecutive
weeks duration, leading to a degree, or
[5]
For both the tuition
credit as provided in section 118.5 of the Act and the education and
textbook credits as provided in section 118.6 of the Act, the Appellant
must be enrolled in a course of not less than 13 consecutive weeks duration.
[6]
In this case the
Appellant was taking courses for 12 weeks and then following a break for a
week, he would take another course or courses for 12 weeks. There was no
consecutive period of 13 or more weeks during which he was taking a course or
courses. This distinguishes this case from Abdalla. It seems to me that
the requirement that the duration must be 13 consecutive weeks is
clearly stated in subparagraph 118.5(1)(b)(i) of the Act (for the
tuition credit) and in the definition of designated educational institution in
subsection 118.6(1) of the Act (for the education and textbook credits).
Since the courses were not 13 consecutive weeks in duration, the
courses fail to satisfy this requirement.
[7]
In Ali v. The
Queen, 2004 TCC 726, [2005] 1 C.T.C. 2230, Justice Bowie dealt with this
issue. He stated in this case as follows:
4 It is therefore a requirement in
respect of each of these credits that the course in which the taxpayer was
enrolled be of at least 13 consecutive weeks duration. In the Appellant's case
the winter term qualifies, but the fall term does not. Counsel for the
Respondent conceded at the hearing of the appeal that the Appellant is entitled
to credits based on the fees for the winter term and the one month of the
winter term that took place in 2002, based upon the Appellant's uncontradicted
evidence as to the duration of the winter term. The appeal will be allowed, to
that extent.
5 This may well be a case in which the
Respondent would consider a remission of the taxes involved. Mr. Ali testified
that Midland University, like
many U.S. universities,
operates on a quarterly rather than a trimester system, with the result that a
student may attend on a full-year basis, and yet not be enrolled for more than
11 or 12 weeks in one term, and so be unable for that reason alone to qualify
for the tax credits. The apparent intention of the 13-consecutive week
requirement is to ensure that the credit is available only to students who are
studying on a full‑time basis. However, those students like Mr. Ali, who
attend universities that operate on a quarterly basis, are placed at what seems
to be an unintended disadvantage, even though they attend throughout the year.
That, however, is a matter for the executive, not the Court, to decide.
[8]
I agree with the
comments of Justice Bowie. It is unfortunate that the Appellant is
disadvantaged because the term is one week short of the required 13 consecutive
weeks, but since the legislation is clear with respect to the requirement for
13 consecutive weeks, his appeal cannot succeed. This requirement can only be
changed by an amendment to the Act.
[9]
As a result the
Appellant’s appeal from the reassessment of his tax liability for 2008 which
resulted in a denial of his claims for a tuition credit as provided in section
118.5 of the Act and the credits as provided in section 118.6 of the Act
is dismissed, without costs.
Signed at Toronto, Ontario, this 5th day of July 2011.
“Wyman W. Webb”
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