Drouin v. R., [1999] 2 CTC 2413

Tremblay T.C.J.:

Point at issue

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 ECO-Conseil de Strasbourg in France.

According to the respondent, the Institut is not a university. In s. 118.5( 1 )(£>), the Income Tax Act (“the Act”) allows this credit only for a university outside Canada.

Burden of proof

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]

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 I

(b) the appellant attended a foreign school in the 1995 taxation year; [admitted]

(c) the Institut ECO-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

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).

This Master’s Degree is signed by the president of the Institut ECO- Conseil, Jean-Pierre Massue, and by the director of ENSAIS, André Colson.

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 F 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 F 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).

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.

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 Etudes Commerciales, Paris

Paris Graduate School of Management, Paris

University of Aix-Marseilles, Aix-en-Provence

University of Paris, Paris

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 ( I )(«)(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).

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 )(è) 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)0) 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 {I 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).

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)0) 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 ‘11s 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)0) 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(l)0)(ix).

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 1 will have no problem recognizing those courses for your Master’s degree.

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]

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”.

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).

In the Court’s opinion the weight of the evidence is in favour of the argument made by the appellant.

Conclusion

The appeal is allowed with costs and the assessment is referred back to the Minister of National Revenue for reconsideration and reassessment.

Appeal allowed.