Subsection 118.5(1) - Tuition credit
See Also
Helden v. The Queen, 2014 DTC 1156 [at 3505], 2014 TCC 196
In the course of finding that the taxpayer's alleged fees paid for private piano lessons were not deductible (see also Kam), VA Miller J suggested that the finding in Tarkowski that the Mississauga School of Music was an educational institution was "over-reaching," although she did not elaborate (para. 14).
Zailo v. The Queen, 2014 DTC 1087 [at 3128], 2014 TCC 60
The taxpayer enrolled in an audio engineering program that could lead either to a certificate or to an associate's degree - although it could also lead to a bachelor's degree if the student combined it with a musical performance program. Rossiter ACJ found that the taxpayer was ineligible for a tuition credit, as Klassen establishes that "degree" means at least a bachelor's degree. Rossiter ACJ stated (at para. 7):
[W]hy would courses leading to an associate's degree, which could in fact be included as part of the qualification to a bachelor's degree, not be eligible for a tuition credit? ... The answer is that, as per the Appellant's testimony, these courses were used towards a certificate program and not towards a bachelor's degree.
Kam v. The Queen, 2013 DTC 1218 [at 1210], 2013 TCC 266
Favreau J stated (at para. 22):
I do not think that a one-hour piano lesson per week is sufficient for the Appellant's son to be considered as being enrolled at an university, college, or other educational institution providing courses at a post-secondary level.
Abdalla v. The Queen, 2011 DTC 1247 [at 1412], 2011 TCC 328
The Minister denied the taxpayer's deduction for her husband's studies in Arizona at the University of Phoenix. Webb J. found (at para. 14) that the husband had not studied "in Canada." The facts were distinguishable from Cammidge, where the taxpayer had studied at the University of Phoenix's Edmonton campus.
Nevertheless, the taxpayer could claim a deduction under s. 118.5(1)(b). Although none of the husband's individual courses exceeded eight weeks in duration, his studies comprised multiple consecutive courses over at least 13 weeks. Webb J. found (at para. 22) that the singular "course" in s. 118.5(1)(b)(i) includes the plural.
Cammidge v. The Queen, 2011 DTC 1146 [at 782], 2011 TCC 172
The taxpayer studied at the University of Phoenix's Edmonton campus. Little J. found that the university was an "institution in Canada" for the taxpayer's purposes under s. 118.5(1)(a), given that the taxpayer's studies occurred on a Canadian campus. She could therefore deduct tuition expenses.
Little J. pointed out, however, that the taxpayer could not deduct education tax credits, because the University of Phoenix did not qualify as a "designated educational institution" under s. 118.6.
Ferre v. The Queen, 2010 1405 [at 4635], 2010 TCC 593
The taxpayer, who was enrolled in an online-MBA program at the University of Liverpool, did not qualify for the tuition credit because the courses of study were broken down into modules of approximately six weeks, so that the tuition paid by him was in respect of courses of less than 13 consecutive weeks.
Tarkowski v. The Queen, 2007 DTC 1555, 2007 TCC 632
The taxpayer was able to claim a tuition credit in respect of his son, who was taking music lessons at the Mississauga School of Music in Grade 3 and 4 Harmony and Grade 8 piano under the Royal Conservatory of Music system. The Mississauga School of Music was an educational institution notwithstanding that the method of teaching was by tutoring and notwithstanding that exams were given by the Royal Conservatory rather than this School; and the courses in question qualified as post-secondary courses given that a Grade 12 high school credit was accorded for Grade 8 piano and Grade 2 theory.
McGrath v. The Queen, 2007 DTC 894, 2007 TCC 295
The taxpayer who enrolled in a Masters program at Walden University in Chicago, and participated in courses on line, was found to have satisfied the requirement of "attendance" within the meaning of s. 118.5(1)(b).
Krause v. The Queen, 2004 DTC 3265, 2004 TCC 594
Before finding that the appeal of the taxpayer, who was enrolled in a Ph.D. program at a college of business administration in California (Touro University International), should be dismissed because the appeal was from a nil assessment, Bowman A.C.J. went on to state in obiter (at p. 3271):
I think it is strongly arguable that full-time attendance at a foreign university can include full-time attendance through the internet or on-line as is the case here. That view conforms to common sense and to the reality of modern technology.
Van de Water v. MNR, 91 DTC 276 (TCC)
Pierrefonds, Quebec, which was some 75 to 80 kilometres from the Canada-U.S. border, was not "near" that boundary.
The Queen v. Gaudet, 78 DTC 6556, [1978] CTC 686 (FCA)
The taxpayer's spouse who spent seven hours per week attending evening classes was not in "full-time attendance".
Administrative Policy
20 June 1994 T.I. 940486 (C.T.O. "Tuition Fees to Medical Council of Canada")
Fees paid to the Medical Council of Canada or to the Educational Commission for Foreign Medical Graduates (Pennsylvania) are not in respect of "tuition" but are simply examination fees (with the examination not forming an integral part of a course of study).
19 December 1991 T.I. (Tax Window, No. 12, p. 18, ¶1573)
A deposit in respect of tuition fees will not qualify for the credit if the student decides not to attend the institution, even if the deposit is forfeited.
7 August 1991 Memorandum (Tax Window, No. 7, p. 7, ¶1388)
Where a student taking courses leading to a post-graduate degree in business management is required to attend the university for only a few weeks in the year but is required to apply in a work environment the advance management techniques being learned and to maintain contact with other students and the tutors through a computer and through the submission of assignments by correspondence, the student will be considered to be in full-time attendance for purposes of s. 118.5(1)(b).
Paragraph 118.5(1)(a)
Subparagraph 118.5(1)(a)(i)
Administrative Policy
27 March 2013 Folio S1-F2-C2
a) Unless there is specific information to the contrary, an educational institution is generally accepted to be a university or college if the applicable province or territory in which the institution is located considers it to be a university or college, as long as courses are given at a post‑secondary school level. ...
b) An other educational institution may include a professional organization that provides educational courses at a post-secondary school level to members, as long as one minimum qualification for membership is secondary school graduation. Generally, a professional organization is one that is empowered, under federal or provincial legislation, to make regulations governing certification and licences to practice the profession, examination of candidates for membership and the right to practice, and the institution of a professional code of conduct for its members. An organization, professional or otherwise, that provides evaluation, examination, or other such services, but does not provide educational courses, is not considered to be an educational institution for purposes of paragraph 118.5(1)(a);
c) An educational institution is not ineligible under subparagraph 118.5(1)(a)(i) solely by reason of the fact that it provides other courses in addition to post‑secondary school level courses; or
d) An institution in Canada that has been designated as a specified educational institution under the Canada Student Loans Act or that has been recognized for the purposes of the Canada Student Financial Assistance Act or An Act respecting financial assistance for education expenses of the Province of Quebec is presumed to satisfy the eligibility requirements.
27 March 2013 Folio S1-F2-C2
Generally, for a course to be considered to be at the post‑secondary school level:
a) the course should provide credit towards a degree, diploma or certificate; and
b) a prerequisite for taking the course should be completion of secondary school.
It is generally assumed that a course is at the post‑secondary school level if the education ministry for the province in which the course is given considers it to be at that level. In any case, it is the status of the course and not the status of the individual that is relevant.
Subparagraph 118.5(1)(a)(ii)
Administrative Policy
27 March 2013 Folio S1-F2-C2
If a student takes a number of courses that are required in order to acquire the skills necessary to work at an occupation, each course will qualify. On the other hand, if a student takes only an initial or introductory course in a particular trade or profession, that course will normally not qualify because sufficient skills have not been obtained. However, if the student goes on and takes the necessary additional courses required for a person to carry on that trade or profession, both the initial course and the additional courses will qualify. Second language training (in particular, French or English) may be viewed as providing a student with skills in an occupation as long as the course is undertaken for the specific purpose of gaining or improving language skills required for an occupation.
Paragraph 118.5(1)(b)
Cases
Klassen v. The Queen, 2007 DTC 5612, 2007 FCA 339
In finding that an American educational institution called "Minot State University - Bottineau, which granted a two-year associate degree, with students following the two years being permitted to transfer course credits towards a bachelor degree at Minot State University, was not a "university outside Canada" for purposes of ss.118.5(1)(b) and 118.6(1)(b), Noël J.A. stated (at para. 21):
"I therefore conclude that the expressions 'university outside Canada' refers to an educational institution which confers degrees usually granted by universities, that is a doctorate degree, a masters degree or at minimum degrees at the baccalaureate level or its equivalent. The degree granted by MSU - Bottineau in this case (i.e., the 'associate degree') attests to the successful completion of a two year undergraduate program. As this is the highest degree which MSU - Bottineau can confer, it does not qualify as a 'university outside Canada'. The fact that MSU - Bottineau calls itself a university cannot alter this conclusion."
See Also
Zochowski v. The Queen, 2012 DTC 1224 [at 3624], 2012 TCC 277
The Ontario-resident taxpayer's claims for tuition tax credits and textbook credits were denied in respect of an online masters of science program from a US university because the courses were 10 weeks in duration. Because the 10-week course duration meant that the university was not a "designated educational institution" for the taxpayer, his education credit was also denied.
Yacubowicz v. The Queen, 2011 DTC 1084 [at 475], 2011 TCC 64
Sotheby's Institute of Art New York was not a degree-granting institution during the relevant period, but it ran a program wherein students could, through studies at Sotheby's, earn a Masters of Arts recognized by the University of Manchester.
Boyle J. found that the taxpayer could not deduct her tuition amounts for studies at Sotheby's. Unlike s. 118.5(1)(a), paragraph (b) requires that studies take place at a "university." Prior cases have established that a "university" must at least be able to grant bachelor's degrees. It is not sufficient that the course of study at a non-university can result in a degree from an affiliated university (para. 8).
In respect of study periods outside Canada, the s. 118.6(2) education credit and s. 118.(2.1) textbook credit are likewise only available for university studies (para. 11).
Zaluski v. The Queen, 2010 DTC 1231 [at 3655], 2010 TCC 338
Little, J. applied the decision in Klassen to find that tuition fees paid to the New York campus of the American Academy of Dramatic Arts did not qualify given that the Academy did not grant bachelor degrees.
Shea v. The Queen, 2008 DTC 3376, 2008 TCC 184
The London School of Economics and Political Science was on the list of 19 colleges forming part of the University of London and it was permitted to grant degrees of the University of London. It qualified as a "university outside Canada".
Valente v. The Queen, 2006 DTC 2685, 2006 TCC 145
In finding that the taxpayer was entitled to a tax credit in respect of tuition fees paid to a university in England that provided online courses (Open University in a program leading to a Masters of Science in Manufacturing, Management and Technology), Woods J. stated (at p. 2687):
"The expression 'full-time attendance' is ambiguous and in my view it should be interpreted liberally to include programs that require the 'attention' of the student on a full-time basis, such as the online program taken by Ms Valente."
Dean v. The Queen, 2005 DTC 322, 2005 TCC 138
The taxpayer took some courses at the Nelson Marlborough Institute of Technology in New Zealand that would have led to a Diploma in Aviation Science (Helicopter) or a Bachelor of Commerce degree although he quit after obtaining sufficient courses to get a job as a helicopter pilot. It was found that the Institute qualified as a university given that it granted Bachelor of Commerce degree and the taxpayer's courses were creditable towards the Bachelor of Commerce degree.
Administrative Policy
27 March 2013 Folio S1-F2-C2
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. 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 bachelor's, master's, doctoral, or professional level or an equivalent degree] will be regarded as a university that qualifies under paragraph 118.5(1)(b). Also, an institution listed in Schedule VIII of the Regulations is recognized as satisfying the requirements of paragraph 118.5(1)(b), as is a university that is a member of the Association of Commonwealth Universities if it can grant degrees at the bachelor or higher level.
27 March 2013 Folio S1-F2-C2
[A] student holding a full–time job while taking a major course load is considered to be in full–time attendance, provided that the educational institution being attended regards the student as a full‑time student.
27 March 2013 Folio S1-F2-C2
A student may engage in full-time studies over the Internet. Full-time online courses are distinguished from correspondence courses by "scheduled, interactive, course-related activities conducted over the internet (for example, the use of on-line course rooms, live on-line conferences, chat-lines and/or virtual libraries."
Correspondence courses, on the other hand, tend to use email instructor correspondence and assignment submission, and access to an "online database or class Web site."
27 March 2013 Folio S1-F2-C2
With respect to satisfying the 13 or 3 consecutive week requirement outlined in (a) and (b) above, the tuition tax credit would not be denied simply because:
- the student dropped out of the course before completing 13 or 3 weeks of study under the course (as applicable), provided they were in full–time attendance before leaving the course;
- the course (which usually satisfies the necessary consecutive weeks requirement) does not do so in a particular academic term because the term itself happens to fall a little short of being a full 13 or 3 weeks (for example, because of a holiday at the beginning or end of the term); or
- the particular academic term in which the course falls is interrupted, for example, by Easter Holidays.
27 March 2013 Folio S1-F2-C2
Tuition fees for flying lessons are deductible if they are taken to become a commercial pilot of professional instructor. CRA discusses various factors, including that the cost of solo flying does not generally qualify as tuition.
Paragraph 118.5(1)(c)
Cases
Napier v. The Queen, 2002 DTC 6725, 2001 FCA 358
The graduation of the taxpayer from high school before attending a program did not demonstrate that the program provided courses at a post-secondary level.
See Also
Humphreys v. The Queen, 2010 DTC 1084 [at 2948], 2010 TCC 88
The taxpayer lived on the south of Vancouver Island and each week commuted for four hours to the Diver's Institute of Technology in Seattle. Sheridan J. found that the taxpayer lived "near the boundary between Canada and the United States" and so was entitled to tuition and textbook credits for his expenses.
Sheridan J. considered Van de Water v. MNR, 91 DTC 276 (TCC), in which a student whose home in a suburb of Montreal was 80 kilometers from the border and whose commute to a college in Plattsburg, New York did not qualify, noted that Dussault J. in that case stated that "the relief was granted so that those individuals could have access to educational institutions situated on the other side of the border but perhaps less distant than the ones situated in Canada...", and stated (para. 11) that "[w]hat may be 'not near enough' in the confined spaces of urban Quebec may be very 'near' indeed in the watery expanses of the Pacific coast."
Yankson v. The Queen, 2005 DTC 1346, 2005 TCC 527
The taxpayer, who resided in Calgary and was enrolled in the Seattle Midwifery School, attended classes in Seattle for five days a month initially and two days a month later on, and also did online studies and practical studies in Calgary.
In finding that the taxpayer "commuted" to Seattle, Rip J. stated (at p. 1349) "if the individual is wont to travel from his or her residence to another locality hundreds of miles away on a regular or frequent basis, that person is commuting between the two places." However, she did not reside "near" to the Canada-U.S. border.
Paragraph 118.5(1)(d)
Administrative Policy
1 October 2013 T.I. 2013-0478801E5 - Examination Fee under Tuition Tax Credit
Does the fee for the International Qualification Examination (IQEX), which is a reciprocity exam that allows Canadian Chartered Accountants to obtain their U.S. CPA designation, qualify for purposes of the tuition tax credit? CRA stated:
[P]ayment for the examination fees for the IQEX will not likely qualify under paragraph 118.5(1)(d) as there is no direct relationship between the examination and obtaining the professional status to practice in Canada.
27 March 2013 Folio S1-F2-C2
Examinations taken in order to begin study in a profession or field, such as a medical college admission test, are not considered to be an occupational, trade, or professional examination for purposes of paragraph 118.5(1)(d). In contrast, fees paid by a foreign-trained lawyer or law graduate to the National Committee on Accreditation (NCA) to undertake a challenge examination that is required to obtain a Certificate of Qualification to access the bar admission process of a Canadian law society would be considered an occupational, trade, or professional examination for purposes of paragraph 118.5(1)(d).