Docket: 2003-3628(IT)I

BETWEEN:

CHRISTINE M. WELLINGTON,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

____________________________________________________________________

Appeal heard on February 19, 2004, at Windsor, Ontario

By: The Honourable Justice E.A. Bowie
Appearances:
Agent for the Appellant:	William Wellington
Counsel for the Respondent:	Marlyse Dumel

____________________________________________________________________

JUDGMENT

          The appeal from the assessment of tax made under the Income Tax Act for the 2001 taxation year is dismissed.

Signed at Ottawa, Canada, this 21st day of April, 2004.

"E.A. Bowie"

Bowie J.

Citation: 2004TCC313

Date: 20040421

Docket: 2003-3628(IT)I

BETWEEN:

CHRISTINE M. WELLINGTON,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

REASONS FOR JUDGMENT

Bowie J.

[1]      This appeal is brought from an assessment for income tax for the year 2001. The Appellant says that the Minister of National Revenue was wrong to deny her a tax credit of $9,137 that she claimed for tuition fees she had paid to Finch University of Health Sciences/The Chicago Medical School (Finch University) in Chicago, Illinois, U.S.A. for a course that she pursued through the medium of the Internet. The main issue in the appeal is the meaning to be given to the verb "to commute" (faire régulièrement la navette) as it is used in subparagraph 118.5(1)(c)(ii) of the Income Tax Act (the Act). The Appellant also argues that she should be given the tax credit because she inquired of an official of the Canada Customs and Revenue Agency (CCRA) prior to enrolling in the course of study, and she was assured that she would be entitled to the credit that she claims.

[2]      The facts are not in dispute. The Appellant works for the Sandwich Community Health Centre as a dietitian. She has a degree in dietetics from the University of Western Ontario, and she is a registered member of the Ontario College of Dietitians. It is a requirement of her job that she continue to be a registered member of the College, and that in turn requires that she regularly pursue continuing education courses. She also considers that her career path may some day lead her into teaching at the university level, for which she would require a post-graduate degree in dietetics. These considerations led her in 2001 to consider enrollment in a program leading to a Master's degree. A number of factors, none of which are relevant here, led her to conclude that her interests would be best served by enrolling in a distance learning course at Finch University. All the classes and seminars for this course were given interactively via the Internet, and papers and exams were conducted the same way. To obtain her degree the Appellant was required to complete 11 courses over six semesters. This required her to spend as much as 4 hours each evening, five evenings per week, and longer on weekends, at her computer terminal. She began the course in September, 2001. The first semester lasted 13 weeks, with a break of one week between the eleventh and twelfth weeks.

[3]      The course was an expensive one, and the Appellant's employer did not contribute to the cost of it, so before enrolling she investigated the income tax implications. She was unable to testify as to the name of the CCRA official with whom she spoke by telephone, but I believe her evidence that he told her that she would be entitled to both a tuition credit under section 118.5 and an education credit under section 118.6 of the Act if she took the course. I have no doubt that this advice had an influence on her decision to enroll. She was therefore surprised and disappointed when the Minister reassessed her in September 2002 to deny her both tax credits, and not much mollified by a subsequent reassessment in March 2003 that restored to her the relatively paltry credit under section 118.6, but not the much more significant one for tuition fees that section 118.5 provides.

[4]      The relevant provision of the Act reads:

118.5(1) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted,

(a)         ...

(c)         where the individual resided throughout the year in Canada near the boundary between Canada and the United States if the individual

(i)          was at any time in the year a student enrolled at an educational institution in the United States that is a university, college or other educational institution providing courses at a post-secondary school level, and

(ii)         commuted to that educational institution in the United States,

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 educational institution if the total of those fees exceeds $100, except to the extent that those fees

(iii)        are paid on the individual's behalf by the individual's employer and are 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).

118.5(1) Les montants suivants sont déductibles dans le calcul de l'impôt payable par un particulier en vertu de la présente partie pour une année d'imposition :

a)          [...]

c)          si, tout au long de l'année, le particulier réside au Canada près de la frontière entre le Canada et les États-Unis et si :

(i)          d'une part, il est inscrit à un moment de l'année à un établissement d'enseignement situé aux États-Unis - université, collège ou autre - offrant des cours de niveau postsecondaire,

(ii)         d'autre part, il fait régulièrement la navette entre sa résidence et cet établissement,

le produit de la multiplication du taux de base pour l'année par le total des frais de scolarité payés à l'établissement pour l'année si ces frais dépassent 100 $ et à l'exception des frais :

(iii)        soit qui ont été payés pour son compte par son employeur et ne sont pas inclus dans le calcul de son revenu,

(iv)        soit qui font partie d'une allocation que son père ou sa mère a reçue pour son compte d'un employeur et ne sont pas inclus dans le calcul du revenu de son père ou de sa mère par application du sous-alinéa 6(1)b)(ix).

[5]      The Appellant raised these issues:

(i)       Does a person who pursues a course at a distant university by interaction through the medium of the Internet "commute" to that university?

(ii)       In the alternative, is the Appellant entitled to the credit that she seeks by reason of the assurances given to her by a representative of CCRA in answer to her inquiry?

[6]      The Appellant's position is that the word "commute" has evolved to include "telecommute." The Appellant cites the 1958 edition of the Oxford International Dictionary of the English Language which defines commute as "to change, to exchange, to interchange". The Appellant also argues that the "spirit and intent" of the Act supports her position. The Appellant relies on a letter from the Minister of Finance who describes the purpose of the tuition tax credit as helping "Canadians gain or update work skills". Similarly, "telecommuting" is equivalent to "teleworking" which is a method of working recognized in a publication of Human Resources and Development Canada. Lastly, the Appellant notes that the Treasury Board Secretariat has established a telework policy for its employees.

[7]      The Respondent's position is that completing courses via the Internet, or "telecommuting", does not form part of the definition of "commute." Rather, the word "commute" refers to travelling daily back and forth from one location to another. The Respondent relies on a dictionary definition and the French version of subparagraph 118.5(1)(c)(ii). In addition, the restrictive nature of section 118.5 indicates that had Parliament intended the tuition credit to be available for Internet-based post-secondary programmes, it would be set out specifically.

[8]      The Respondent argues that the advice the Appellant received from the CCRA about her eligibility for the tuition credit was incorrect. Notwithstanding this fact, however, the Minister and the Court must apply the law as Parliament wrote it.

[9]      Paragraph 118.5(1)(c) provides for a tuition credit where the taxpayer:

(i)       lives near the Canada-U.S. boundary;

(ii)       is a student enrolled at an educational institution in the U.S. that is a university, or other institution, providing post-secondary courses; and

(iii)      commuted to that educational institution in the U.S.

It is not disputed that the Appellant satisfies the first two requirements of paragraph 118.5(1)(c).

[10]     In construing a statute, the preferred approach is to determine the ordinary meaning of the words used and to read them in light of the statutory context in which they appear.[1] Absent any ambiguity, the plain meaning of the words must be applied.[2]

[11]     "Commute" is not defined in the Act. I find that for subparagraph 118.5(1)(c)(ii) "commute" requires the physical movement of the taxpayer from Canada to the educational institution in the United States and then back to Canada on a regular basis and does not include "telecommute". This means travel back and forth between the two countries on a daily or weekly basis.[3]

[12]     The Canadian Oxford Dictionary defines commute as "travel to and from one's daily work, esp. from suburbs to the centre of a city by car or public transit." Notably, this same dictionary defines "telecommute" separately. The French language version of subparagraph 118.5(1)(c)(ii) refers to "il fait régulièrement la navette entre sa résidence et cet établissement". The Collins Robert French Dictionary defines "faire la navette" as "to commute between, to operate a shuttle (service) between". This phrase clarifies that Parliament intended physical movement on a regular basis.

[13]     Completing courses at an educational institution through the exchange of information via the Internet is not the same as physically travelling back and forth between Canada and the U.S. Parliament has given extensive consideration to the circumstances under which a taxpayer will qualify for the tuition credit in section 118.5. If Parliament had intended the tuition credit to be available to taxpayers who complete their education by staying in Canada and telecommuting via the Internet to an educational institution in the U.S., they would have put that in the provision.

[14]     The Appellant argues that it is within the spirit and intent of the Act that "commute" should be understood to include "telecommute". Interpreting the word this way would reflect the views and policies of federal government. Unfortunately, while I commend the efforts of the Appellant to seek out this information, I can attach no legal significance to it, because neither the English nor the French version of the statute is ambiguous.

[15]     I accept the evidence that the Appellant was given advice by an agent of the CCRA reassuring her that she would qualify for the tuition credit if she enrolled in the programme at Finch University. The Appellant, in effect, makes an estoppel argument that because of the advice she received, the Minister is precluded from denying her the tuition credit under paragraph 118.5(1)(c).

[16]     The agent of CCRA gave the Appellant wrong advice. A taxpayer's obligation to pay tax is not vitiated if the Minister has negligently advised the taxpayer that he or she will not have to pay tax. Justice Pigeon, in Canada (Minister of National Revenue) v. Inland Industries Ltd.,[4] stated the rule in terms particularly relevant to the current case: "...the Minister cannot be bound by any approval given when the conditions prescribed by law were not met".

[17]     The Internet has, and will no doubt continue, to transform the nature of education and work. It might be time for Parliament to re-examine subparagraph 118.5(1)(c)(ii) to reflect this transformation. However, until such time, I must apply the ordinary meaning of the words in the provision. Therefore, in spite of the advice that the Appellant received from the agent at CCRA as she did not meet the condition of subparagraph 118.5(1)(c)(ii) that she "commute" to the educational institution in the United States, I must dismiss the appeal.

Signed at Ottawa, Canada, this 21st day of April, 2004.

"E.A. Bowie"

Bowie J.

CITATION:

2004TCC313

COURT FILE NO.:

2003-3628(IT)I

STYLE OF CAUSE:

Christine M. Wellington and Her Majesty the Queen

PLACE OF HEARING:

Windsor, Ontario

DATE OF HEARING:

February 19, 2004

REASONS FOR JUDGMENT

The Honourable Justice E.A. Bowie

DATE OF JUDGMENT:

April 21, 2004

APPEARANCES:

Agent for the Appellant:

William Wellington

Counsel for the Respondent:

Marlyse Dumel

COUNSEL OF RECORD:

For the Appellant:

Name:

N/A

Firm:

N/A

For the Respondent:

Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada

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