Rivington v. The Queen

Rivington v. The Queen Court (s) Database Tax Court of Canada Judgments Date 2006-09-25 Neutral citation 2006 TCC 468 File numbers 2005-2793(IT)I Judges and Taxing Officers Leslie M. Little Subjects Income Tax Act Decision Content Docket: 2005-2793(IT)I BETWEEN: ROBERT J. RIVINGTON, Appellant, and HER MAJESTY THE QUEEN, Respondent. ____________________________________________________________________ Appeal heard on June 16, 2006 at Vancouver, British Columbia Before: The Honourable Justice L.M. Little Appearances: For the Appellant: The Appellant himself Counsel for the Respondent: Fiona Mendoza ____________________________________________________________________ JUDGMENT The appeal from the assessment made under the Income Tax Act for the 2003 taxation year is dismissed, without costs, in accordance with the attached Reasons for Judgment. Signed at Vancouver, British Columbia, this 25th day of September 2006. "L.M. Little" Little J. Citation: 2006TCC468 Date: 20060925 Docket: 2005-2793(IT)I BETWEEN: ROBERT J. RIVINGTON, Appellant, and HER MAJESTY THE QUEEN, Respondent. REASONS FOR JUDGMENT Little J. A. FACTS [1] The Appellant is a commercial airline pilot. [2] In order to improve his knowledge as a commercial pilot the Appellant attended a training course held at Aeroservice Aviation Centre ("AAC") in the fall of 2003. [3] AAC is a flight training institute located in Miami, Florida. [4] The Appellant paid tuition fees of $8,692.75 to attend the training course at AAC. [5] The Appellant attended AAC for approximately eight weeks. [6] When the Appellant filed his income tax return for the 2003 taxation year he deducted the following amounts: Tuition fee paid at AAC $8,692.75 Education amount 120 x 2 months 240.00 $8,932.75 B. ISSUE [7] Is the Appellant entitled to claim the tuition fee and education amount as a non-refundable tax credit in determining his income for the 2003 taxation year? C. ANALYSIS [8] Subsection 118.5(1) of the Act reads as follows: 118.5(1) For the purposes of computing the tax payable under this Part by an individual for a taxation year, there may be deducted, (a) [institution in Canada] - where the individual was during the year a student enrolled at an educational institution in Canada that is (i) a university, college or other educational institution providing courses at a post-secondary school level, or (ii) certified by the Minister of Human Resources and Skills 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, an amount equal to the product obtained when the appropriate percentage for the year is multiplied by the amount of fees for the individual's tuition paid in respect of the year to the educational institution if the total of those fees exceeds $100, except to the extent that those fees (ii.1) are paid to an educational institution described in subparagraph (i) in respect of courses that are not at the post-secondary school level, (ii.2) are paid to an educational institution described in subparagraph (ii) if (A) the individual had not attained the age of 16 years before the end of the year, or (B) the purpose of the individual's enrolment at the institution cannot reasonably be regarded as being to provide the individual with skills, or to improve the individual's skills, in an occupation, (iii) are paid on the individual's behalf by the individual's employer and are not included in computing the individual's income, (iii.1) are fees in respect of which the individual is or was entitled to receive a reimbursement or any form of assistance under a program of Her Majesty in right of Canada or a province designed to facilitate the entry or re-entry of workers into the labour force, where the amount of the reimbursement or assistance is not included in computing the individual's income, (iv) were included as part of an allowance received by the individual's parent on the individual's behalf from an employer and are not included in computing the income of the parent by reason of subparagraph 6(1)(b)(ix), or (v) are paid on the individual's behalf, or are fees in respect of which the individual is or was entitled to receive a reimbursement, under a program of Her Majesty in right of Canada designed to assist athletes, where the payment or reimbursement is not included in computing the individual's income; (b) [university outside Canada] - 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, (ii) paid on the individual's behalf by the individual's employer to the extent that the amount of the fees is not included in computing the individual's income, or (iii) paid on the individual's behalf by the employer of the individual's parent, to the extent that the amount of the fees is not included in computing the income of the parent by reason of subparagraph 6(1)(b)(ix); and [9] We must also consider the definition of "designated educational institution" contained in subsection 118.6(1) which reads as follows: 118.6 (1) For the purposes of sections 63 and 64 and this subdivision, "designated educational institution" means (a) 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 ... [10] If we now focus on the words contained in paragraph 118.5(1)(b) we note that for the Appellant to qualify for the tax credit the following points must be satisfied: 1. The Appellant must have attended a university outside Canada. In Gillich v. The Queen, [2006] DTC 2251 my colleague Justice Lamarre was required to determine if the Appellant qualified for the tuition tax credit provided for in paragraph 118.5(1)(b) of the Act. Justice Lamarre said at page 2252: [11] Finally, Interpretation Bulletin IT-556R2 states at paragraph 5 that an educational institution located in a country outside Canada is presumed to qualify for the purposes of paragraph 118.5(1) of the Act if it is recognized by an accrediting body as being an educational institution which confers degrees at least at the bachelor or equivalent level. [12] Here, the associate degree granted to the appellant's daughter is not a bachelor's degree. On the strength thereof she was given credits equivalent to one year in her bachelor's program at Carleton University. Her associate degree from Cottey College is a step toward obtaining a bachelor's degree from another educational institution. Cottey College does not belong to any such educational institution. [13] I therefore conclude that Cottey College does not qualify as an institution having the power and authority to grant a degree within the meaning given that word in the case law. Nor does Cottey College qualify as a university within the literal meaning given to that word in the dictionaries. It therefore does not qualify as a university within the meaning of paragraph 118.5(1) of the Act. [14] For these reasons the appeal is dismissed. I agree with the comments made by Justice Lamarre in the above decision and in my opinion AAC does not qualify as a university. 2. The course attended by the Appellant must lead to a degree. The Appellant received a certificate from AAC but he did not receive a degree (see Exhibit A-2). The absence of a degree in this situation means that the Appellant does not meet this test. 3. The fees paid by the Appellant must have been paid in respect of a course where the fees were paid in respect of a course of not less than 13 consecutive weeks duration. In this situation the course at AAC only lasted eight weeks and therefore the Appellant does not satisfy this test. [11] I have concluded that for the reasons noted above, AAC does not satisfy the requirements contained in paragraph 118.5(1)(b) of the Act. It therefore follows that the Appellant is not allowed to obtain a tax credit for the 2003 taxation year. [12] The appeal is dismissed, without costs. Signed at Vancouver, British Columbia, this 25th day of September 2006. "L.M. Little" Little J. CITATION: 2006TCC468 COURT FILE NO.: 2005-2793(IT)I STYLE OF CAUSE: Robert J. Rivington and Her Majesty the Queen PLACE OF HEARING: Vancouver, British Columbia DATE OF HEARING: June 16, 2006 REASONS FOR JUDGMENT BY: The Honourable Justice L.M. Little DATE OF JUDGMENT: September 25, 2006 APPEARANCES: For the Appellant: The Appellant himself Counsel for the Respondent: Fiona Mendoza COUNSEL OF RECORD: For the Appellant: Name: Firm: For the Respondent: John H. Sims, Q.C. Deputy Attorney General of Canada Ottawa, Canada