29 May 2000 GST/HST Interpretation 30911 - Application of the GST to Public Colleges

Dear XXXXX

I refer to your letter of April 7, 2000, concerning the application of the Goods and Services Tax (GST) to XXXXX Since that time they have been receiving GST rebates as public colleges at the 67% rate.

You are of the opinion that the Colleges meet the definition of "public college" as defined in the Excise Tax Act (ETA) in terms of receiving government funding, operating pursuant to provincial legislation as a post secondary institution and providing programs of instruction in one or more fields of vocational, technical or general education.

As you are aware, we received some information regarding this matter from the XXXXX[.] The following information was provided to us:

1) The XXXXX are under the authority of the XXXXX as publicly owned institutions.

2) XXXXX[.]

3) XXXXX has indicated that the percentage of "government funding" is XXXXX[.]

4) XXXXX[.]

5) The XXXXX can grant secondary school diplomas which meet the standards of educational instruction established by the government of the province of XXXXX.

Subsection 123(1) of the ETA defines "public college" as follows:

"public college" means an organization that operates a post-secondary college or post-secondary technical institute

(a) that receives from a government or a municipality funds that are paid for the purpose of assisting the organization in the ongoing provision of educational services to the general public, and

(b) the primary purpose of which is to provide programs of instruction in one or more fields of vocational, technical or general education.

Policy Paper P-186R: "Meaning of Public College for the Purpose of the Excise Tax Act (The ETA)" provides more details on the meaning of this term. Our position is that, a public college:

1) must be established and operated pursuant to the relevant provincial legislation governing the establishment of "colleges";

2) must have as part of its normal admission standards as a post-secondary institution, the requirement that the prospective student have either a secondary school diploma or mature student status;

3) must have as a primary purpose, the provision of programs of instruction in one or more fields of vocational, technical or general education;

4) must be "funded by a government or municipality", that is, the institution must receive funding from a government or a municipality to support the ongoing delivery of educational programs by the college to the general public, as opposed to receiving payments which compensate the college for training it provides to specific students who qualify under particular agreements with the government or municipality for educational programs provided by the organization.

We are unable to determine if the "government funding" reported by XXXXX XXXXX meets the definition of "government funding" as per policy P-186R.

As defined in subsection 123(1) of the ETA, a "public college" is an organization that operates a "post-secondary college" or a "post secondary technical institute". The term "post-secondary" refers to the provision of a course of study beyond the secondary school level. However, based on the above information, the XXXXX are primarily providing courses at the secondary school level. Therefore, it is our opinion that the XXXXX are not public colleges as defined in subsection 123(1) of the ETA.

In November 1999, we requested that officials at the XXXXX obtain additional information with respect to the activities of these XXXXX. We requested this information in order to determine whether other provisions of the ETA may apply. I understand that this information was requested by officials at the XXXXX however, the information was not provided to them. Without further evidence, our conclusion is that the XXXXX do not meet the definition of public college. However, if with additional information we determine that the XXXXX still do not meet the definition of public college, we will raise the issue with the Department of Finance which is responsible for tax policy.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact Mr. Pierre Bertrand, Director, Public Service Bodies and Governments Division at (613) 954-7656.

Yours truly,

E.H. Gauthier
Director General
Excise and GST/HST Rulings Directorate