Napier v. The Queen, docket 1999-2098-IT-I (Informal Procedure)

Date: 20001109

Docket: 1999-2098-IT-I

BETWEEN:

MICHAEL S. NAPIER,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

____________________________________________________________________

For the Appellant: The Appellant himself

Agent for the Respondent: Stacy Cawley (Student-at-law)

____________________________________________________________________

Reasons for Judgment

(Delivered orally from the Bench at Winnipeg, Manitoba, on August 25, 2000)

McArthur J.T.C.C.

[1]            In 1997, the Appellant attended Southwind Aviation Academy Inc. (Southwind) in Brownsville, Texas for six weeks. In computing income for that year, he deducted the tuition fees paid in the amount of $4,623. The Minister of National Revenue disallowed that deduction and this appeal is a result of the Minister's reassessment.

[2]            The Minister's position from the pleadings is that Southwind is not a university, college or educational institution providing courses at a post-secondary school level. Paragraphs 118.5(1)(b) and (c) of the Income Tax Act read 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,

                               

                                (a)            ...

(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 ...

and a formula follows

(c)            where the individual resided throughout the year in Canada near the boundary between Canada and the United States if the individual

(i)             was at any time in the year a student enrolled at an educational institution in the United States that is a university, college or other education institution providing courses at a post-secondary level, and

(ii)            commuted to that educational institution in the United States,

an amount equal to ...

a formula follows.

[3]            The Appellant graduated from a Winnipeg high school in 1993. In 1997, he attended a flying school, Southwind, in Texas, where he remained for six weeks. He received no diploma or degree but did subsequently obtain a flying licence, both in the United States and in Canada. Prior to attending Southwind, he lived in Winnipeg and he returned to Winnipeg after the six-week course, where it appears he worked in the aviation industry for short periods, but is now unemployed.

[4]            The Appellant states that he meets the criteria in paragraph 118.5(1)(c) in that he resided in Canada, near the boundary of the United States, and commuted to an educational institution providing courses at a secondary level. The focus of the Minister's submission was whether Southwind is an educational institution within the meaning of subparagraph 118.5(1)(c)(i). The Appellant represented himself and gave oral testimony to the effect that having attended Southwind and from the education he received, he was able to obtain a pilot's licence. Other than the licences, one for the US and one for Canada, he presented no documentary evidence whatsoever. In his submissions, he quoted dictionary definitions with respect to post-secondary education, along with definitions of the words "reside" and "commute".

[5]            The Minister called as a witness a Revenue Canada representative who had conscientiously searched to find Southwind listed as an accredited educational institution, but could not. I was impressed with the efforts to which the Revenue Canada officer went in attempting to find, from the avenues available to her, whether Southwind was listed as "an accredited educational institution".

[6]            Paragraph 118.5(1)(b) provides that a taxpayer may claim a credit if he or she is in full-time attendance in a university course leading to a degree. It is clear that the Appellant does not meet these requirements.

[7]            Paragraph 118.5(1)(c) provides for a tax credit for fees paid to an educational institution for those who reside near the boundary between Canada and the US and commute. I find that to meet the requirements of subparagraphs 118.5(1)(c)(i) and (ii), a student must reside in Canada near the US boundary, attend a US institution during the day, returning at least weekly, if not daily, to a residence in Canada. This is a common sense interpretation of the clear words of subparagraph 118.5(1)(c)(ii). The Appellant does not meet this criteria. He did not commute between his residence near Winnipeg and Brownsville, Texas.

[8]            Further, the Appellant did not meet the onus of proving that Southwind met the institutional meaning in subparagraph 118.5(1)(c)(i). The evidence of Alice Newman, the officer with Revenue Canada, was convincing. To her credit, she made a comprehensive search and could not find Southwind listed as a post-secondary institution. The Appellant provided no further evidence to assist the Court in that regard. It fell well short of establishing that Southwind met the statutory requirements.

[9]            The appeal is dismissed.

Signed at Ottawa, Canada, this 9th day of November, 2000.

"C.H. McArthur"

J.T.C.C.