[OFFICIAL ENGLISH TRANSLATION]
Date: 20010725
Docket: 2000-132(IT)I
BETWEEN:
WALTER NICKERSON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Watson, D.J.T.C.C.
[1] This appeal was heard at Bathurst,
New Brunswick, on June 16, 2001, under the informal
procedure.
[2] In computing his income for the
1997 taxation year, the appellant deducted $5,512 as a tuition
credit and $1,800 as an education credit.
[3] By Notice of Reassessment dated
October 26, 1998, the Minister of National Revenue ("the
Minister") disallowed the credits of $5,512 and $1,800.
[4] In confirming the reassessment for
that year, the Minister assumed the following facts, inter
alia:
[TRANSLATION]
(a) during the 1997
taxation year, the appellant received $9,943 and $2,112, for a
total of $12,055, from Human Resources Development Canada
("HRDC");
(b) the $12,055 was
included in computing his income for the 1997 taxation year;
(c) as stated in
subparagraph 8(a), $5,457 of the $12,055 was given to the New
Brunswick Community College ("NBCC") to pay the tuition
fees for the appellant's secondary school training
course;
(d) as described in
subparagraph 8(c), the training course was not at a
post-secondary school level;
(e) as stated in
subparagraph 8(a), $6,597 of the $12,055 was paid to the
appellant as a living and transportation allowance for his
secondary school training course;
(f) the
educational program was not a qualifying educational program
within the meaning of section 118.6 of the Act; and
(g) the appellant
cannot claim an education credit.
[5] When the appeal was heard, the
agent for the appellant admitted the facts alleged in
subparagraphs (a) to (e) and denied the facts alleged in
subparagraphs (f) and (g) of paragraph 8 of the Reply to the
Notice of Appeal.
[6] The burden of proof is on the
appellant, who must show on the balance of evidence that the
reassessment is wrong in fact and in law. Each case stands on its
own merits.
[7] In his Reply to the Notice of
Appeal, the Minister now acknowledges that the $5,457 received by
the appellant was a payment relating to a course or program
designed to facilitate the re-entry into the labour force of an
employment insurance claimant and that, pursuant to
subparagraph 56(1)(a)(iv) of the Income Tax
Act ("the Act"), that amount ought not to
have been included in the appellant's income in the 1997
taxation year.
[8] The only issue is whether the
Minister was justified in denying the appellant the education
credit of $1,800.
[9] The provisions of the Act
relevant to this appeal read in part as follows:
SECTION 118.6 : Definitions.
(1) For the purposes of this subdivision,
...
"designated educational institution" -
"designated educational institution" means
(a) an
educational institution in Canada that is
(i)
a university, college or other educational institution designated
by the Lieutenant Governor in Council of a province as a
specified educational institution under the Canada Student
Loans Act, designated by an appropriate authority under the
Canada Student Financial Assistance Act, or designated by
the Minister of Higher Education and Science of the Province of
Quebec for the purposes of An Act respecting financial
assistance for students of the Province of Quebec, or
(ii) certified by
the Minister of Human Resources 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,
...
"qualifying educational program" -
"qualifying educational program" means a program of not
less than 3 consecutive weeks duration that provides that each
student taking the program spend not less than 10 hours per week
on courses or work in the program and, in respect of a program at
an institution described in the definition "designated
educational institution" (other than an institution
described in subparagraph (a)(ii) thereof), that is a
program at a post-secondary school level but, in relation to any
particular student, does not include any such program
(a) if the
student receives, from a person with whom the student is dealing
at arm's length, any allowance, benefit, grant or
reimbursement for expenses in respect of the program other
than
(i) an amount
received by the student as or on account of a scholarship,
fellowship or bursary, or a prize for achievement in a field of
endeavour ordinarily carried on by the student, or
(ii) a benefit, if
any, received by the student by reason of a loan made to the
student in accordance with the requirements of the Canada
Student Loans Act or An Act respecting financial
assistance for students of the Province of Quebec, or by
reason of financial assistance given to the student in accordance
with the requirements of the Canada Student Financial
Assistance Act, or
(b)
if the program is taken by the student
(i)
during a period in respect of which the student receives income
from an office or employment, and
(ii)
in connection with, or as part of the duties of, that office or
employment.
(2) Education credit. For the purpose of computing the tax
payable under this Part by an individual for a taxation year,
there may be deducted an amount determined by the formula
A x $100 x B
where
A is the
appropriate percentage for the year, and
B is 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,
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 student is
enrolled in the program to obtain skills for, or improve the
student's skills in, an occupation.
[10] The appellant was the only person who
testified at the hearing. He demonstrated that he acted in good
faith when he deducted the $1,800 as an education credit, relying
on incorrect information and advice from other people.
[11] Considering all the circumstances of
this appeal, including the appellant's testimony, the
admissions and the documentary evidence, the Court is satisfied
that the appellant has not been able to show on the balance of
evidence that the Minister was wrong in fact and in law to
disallow the education credit of $1,800. Since the appellant took
secondary school courses at an institution not certified by the
Minister of Human Resources Development, he was not enrolled in a
"qualifying educational program" within the meaning of
section 118.6.
Consequently, the appeal is dismissed.
Signed at Ottawa, Canada, this 25th day of July 2001.
D.J.T.C.C.
Translation certified true
on this 21st day of January 2003.
Sophie Debbané, Revisor
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