Tax Court of Canada Judgments

Date: 19980928

Docket: 97-3034-IT-I

BETWEEN:

JAN PERSAUD,

Appellant,

and

HER MAJESTY THE QUEEN

Respondent.

Reasons for Judgment

Christie, A.C.J.T.C.

[1] This appeal is governed by the Informal Procedure prescribed under section 18 and following sections of the Tax Court of Canada Act. The year under review is 1995.

[2] The issue is whether in computing her income for 1995 the appellant is entitled to a tuition credit in the amount specified in paragraph 118.5(1)(a) of the Income Tax Act ("the Act"). That portion of paragraph 118.5(1)(a) which is relevant to this appeal provides:

"(1) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted,

(a) 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 Employment and Immigration[1] 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[2] for the year is multiplied by the amount of any fees for the individual's tuition paid in respect of the year to the educational institution if the total of those fees exceeds $100 ..."

[3] The appellant paid triOS Training Centres Limited ("triOS") $7,995.00 in fees plus $559.65 in GST for a total of $8,554.65.

[4] Paragraphs numbered 1 and 7 of the Notice of Appeal read:

"1. The fees were paid for courses in Canada at a post secondary school level. I compared the syllabus for these courses with Sheridan College credit courses and found that the triOS Training Centre courses had more subject matter and more instructional hours than the Sheridan College course which are acceptable for Income Tax purposes.

The compared courses are:

triOS Training Centres (Exhibit B)[3]

a. Supporting Microsoft Windows 95 (540)

b. Supporting Microsoft Windows NT 3.51 (505)

c. Supporting Microsoft Windows NT Server 3.51 (487)

d. Interworking Microsoft TCP/IP on Windows NO Server 3.5 (472)

e. System Administrator for Microsoft SQL Server 6 and

Sheridan College (Exhibit C)[4]

a. Windows, Advanced (CWS3958)

b. Windows NT Installation and Administration (CWS3776)

c. Building and Managing a LAN – Operational Issues (CWS3790)

d. TCP/IP Understanding the internetworking Protocol Suite (CWS3778)

e. Database Programming 1 & 2 (DBP3201 & DBP3202).

The triOS courses covered and surpassed the Sheridan College courses in every aspect. The principal difference between the courses at the different institutions lies in the technology, whereas the triOS Training Centre courses are more advanced and suitable to current employment needs. I have included copies of the courses examined from both institutions.

7. The institution meets the criteria established by Human Resources Development Canada. It has a business name and gives the course or training in Canada. It is private business providing courses, other tan courses designed for university credits. It offers courses designed to furnish a person with skills for, or to improve a person's skills in a recognized occupation. The courses in question are not for conferences, workshops, seminars, courses leading to university credits, self-development courses, general knowledge course, religion courses, tutorial services, job interview techniques, preparation of curriculum vitae, etc. which do not qualify but they are highly technical training courses.

triOS Training Centres meets the required criteria established by Human Resources Development Canada for certification. That it fail (sic) to register should not be the only reason to disallow that claimed deduction."

[5] Paragraph 5 of the Reply to the Notice of Appeal reads:

"5. In assessing the Appellant and disallowing the Credit, the Minister made the following assumptions of fact:

(a) the Appellant attended the (triOS Training) Centre in 1995 in order to obtain computer training;

(b) in the 1995 taxation year, the Centre was not certified by the Minister of Employment and Immigration to be an educational institution providing courses that furnish a person with skills for, or improve personal skills in, an occupation;

(c) the amount of $7,995 tuition fees the Appellant paid to the Centre, and for which she claimed a non-refundable tax credit did not come within the provisions of subsection 118.5(1) of the Income Tax Act (the 'Act') for the 1995 taxation year."

[6] In her evidence-in-chief the appellant testified that triOS was not a registered institution. By that is meant it was not an education institution certified by the Minister of Employment and Immigration. She went on to say:

"Later, I went on to find out -- that I didn't know that you had, like -- ok. I was not aware of the fact that the institute had to be registered. So I assumed that my receipt that I paid would have been okay. I found out later that it wasn't, when I got the rejection from the government.

I requested triOS to register. From what I see that was sent to me from the government, it stated that they had tried to register them but they didn't register. But triOS teaches the identical courses through the Peel Board of Education, and these courses -- I've got a book that states that the identical program is being taught by triOS, but you can register through Peel Board of Education and get tax receipts.

The part I don't understand is the courses are identical. The program is identical. It's being taught by the institute, except I registered directly with the institute and not through Peel Board of Education. I was not given this information at the time, and this information I only -- actually, surfaced up in the last few months that I've actually seen it come through into my home in the form of a pamphlet that gets delivered to every home now. And in the fine print, it states that the courses are registered. If I register through them I would get a tax receipt. The courses are identical."

[7] In the course of the appellant being cross-examined this exchange took place:

"Q. Okay. Ms. Persaud, is triOS Training Centre Limited a college, from your understanding?

A. No, it's not.

Q. Is it a university?

A. No, it's not.

Q. And it's not a post-secondary level institution?

A. No, it's not. No directly.

Q. Right. Ms. Persaud, do you understand what a post-secondary level institution is?

A. Yeah. I think so. But you can go ahead and ...

His Honour: Well, tell us what you think it is.

The witness: I think it's something that's beyond the years of high school; that you would require your high school level education in order to further -- to go a little further in that.

Ms. Zaman: Do you know the difference between a post-secondary institution and a training school, Ms. Persaud?

A. Not the technical difference, no.

Q. Does a -- sorry. Go on.

A. Sorry. My assumption is, about training, in order to get a job, you know, for you career-wise.

Q. Does the program that you were enrolled in require post-secondary level education?

A. It requires experience in the field or it requires knowledge in the field.

Q. But it does not require post-secondary level education? It does not require high school diploma or high school graduation?

A. No, it does not."

[8] Counsel for the respondent placed in evidence an Affidavit sworn on August 27, 1998 that reads:

"I, Pierrette Thibodeau, of the City of Hull, in the Province of Quebec, MAKE OATH AND SAY AS FOLLOWS:

1. I am employed as a Certification Program Officer, in the Department of Human Resources Development in Hull, Quebec, and as such have personal knowledge of the matters hereinafter deposed to, save and except what is stated to be on information and belief, and where so stated, I verily believe them to be true.

2. Attached hereto and marked as Exhibit 'A' to this Affidavit is a copy of the list of all the private educational institutions for the Province of Ontario that were certified pursuant to subparagraph 118.5(1)(a)(ii) of the Income Tax Act by the Minister of Human Resources Development as of December, 1995.

3. This list is kept as part of a database of information maintained by the Department of Human Resources Development in the usual and ordinary course of business.

4. In February of 1998, I received an application from triOS Training Centres Limited wherein triOS sought certification. I am advised and do verily believe that this was the first application. I contacted triOS in March 1998 and requested further information. None was received.

5. I have reviewed the database and verily believe to be true that triOS Training Centres Limited was not a private educational institution in Canada certified by the Minister of Human Resources Development in 1995 pursuant to subparagraph 118.5(1)(a)(ii)."

[9] In Edwards v. the Queen, [1998] T.C.J. No. 712, Bowie, T.C.J., held that the onus of proof regarding the issue whether an educational institution has been certified by the Minister lies on the Crown. He said at paragraphs 4 and 5:

"4. Since the early part of this century the Supreme Court of Canada has held that the onus of disproving the facts upon which an assessment for tax is based, lies with the taxpayer. The most frequently cited authority is Johnston v. M.N.R., [1948] S.C.R. 486; see the judgments of Rand J. at p. 489, and of Kellock J. at p. 492. The most recent is Hickman Motors Ltd. v. Canada, [1997] 2 S.C.R. 336 per L'Heureux-Dubé J. at pages 378-81. The rationale placing this burden upon taxpayers is that they are the persons who, in most cases, have knowledge of the relevant facts. This was succinctly expressed by Duff J., as he then was, in the Anderson Logging case, [1924] S.C.R. 45 at 50:

'First, as to the contention on the point of onus. If, on an appeal to the judge of the Court of Revision, it appears that, on the true facts, the application of the pertinent enactment is doubtful, it would, on principle, seem that the Crown must fail. That seems to be necessarily involved in the principle according to which statutes imposing a burden upon the subject have, by inveterate practice, been interpreted and administered. But, as concerns the inquiry into the facts, the appellant is in the same position as any other appellant. He must show that the impeached assessment is an assessment which ought not to have been made; that is to say, he must establish facts upon which it can be affirmatively asserted that the assessment was not authorized by the taxing statute, or which bring the matter into such a state of doubt that, on the principles alluded to, the liability of the appellant must be negatived. The true facts may be established, of course, by direct evidence or by probable inference. The appellant may adduce facts constituting a prima facie case which remains unanswered; but in considering whether this has been done it is important not to forget, if it be so, that the facts are, in a special degree if not exclusively, within the appellant's cognizance; although this last is a consideration which for obvious reasons, must not be pressed too far.'

5. The only fact here in issue is whether the School was, at the relevant time, certified by the appropriate Minister. That, of course, is not in any way a matter as to which knowledge of the true facts lies with the taxpayer. To the contrary, it is a matter as to which the knowledge lies entirely with the Crown, and, as appeared from the evidence, that knowledge is not readily available to taxpayers from any primary source that they may themselves consult. Access to it is apparently available, as a practical matter, only by making an oral request to a Revenue Canada office, in person or by telephone, and then accepting the response given as being accurate."

In my opinion the Affidavit filed by counsel for the appellant discharges the onus of proof referred to.

[10] During argument the appellant said:

"The affidavit is not valid because the Peel Board of Education is not there. It's not on the list. I have a receipt from 1995 to prove that it was a qualified institute."

As the appeal is governed by the Informal Procedure I allowed the receipt in evidence even at this late stage. The document is a Revenue Canada form entitled: "TUITION AND EDUCATION CREDIT CERTIFICATE". It is dated March 11, 1996 and signed by the appellant. Tuition fees of $299.00 for the period February-March 1995 are stated. The receipt was sent to the appellant from: "The Peel Board of Education PEEL COMPUTER CENTRE". The receipt was tendered with the appellant's return of income for 1995 and accepted by Revenue Canada.

[11] The answer to the appellant's contention that the Affidavit is invalid for the reason given is that paragraph 2 thereof states: "Exhibit 'A' to this Affidavit is a copy of the list of all the private educational institutions for the Province of Ontario that were certified pursuant to subparagraph 118.5(1)(a)(ii) of the Income Tax Act by the Minister of Human Resources Development as of December, 1995." (emphasis added)

[12] I am satisfied on the whole of the evidence that the appellant is not entitled to a tuition credit under paragraph 118.5(1)(a) of the Act.

[13] The appeal is dismissed.

Signed at Ottawa, Canada, this 28th day of September 1998.

"D.H. Christie"

A.C.J.T.C.C.

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