T-4944-76
Alain G. L. Gaudet (Plaintiff)
v.
The Queen (Defendant)
Trial Division, Décary J.—Ottawa, May 11 and
June 10, 1977.
Income tax — Calculation of income — Deductions
Tuition fees — Wife in educational program within definition
of s. 110(9)(6) — Fully supported by husband — Whether or
not husband can deduct fees — Income Tax Act, R.S.C. 1952,
c. 148, s. 11(1)(qc), as amended by S.C. 1970-71-72, c. 63, ss.
60 (/), 110 ( 1 )(g).(h),( 9 )(a),(b).(c).
This is an appeal, by way of trial de novo, from the Tax
Review Board's dismissal of plaintiffs appeal. Plaintiffs wife
attended Ste. Foy College in a program within the definition of
section 110(9)(b). Plaintiff supported his wife in full during
this period and deducted her tuition fees from his 1973 income
tax. The Minister refused to allow the deduction on the ground
that she was not in full-time attendance within the meaning of
section 110(1)(h) and (9) and confirmed his reassessment after
plaintiff had filed a notice of objection. Plaintiff then appealed
to the Tax Review Board and subsequently to this Court.
Held, the appeal is allowed. The fact that the plaintiffs wife
was considered a part-time student by the institution does not
mean she has to be considered as such for income tax purposes.
Since the legislation, in section 110(9)(b), for the purpose of
section 110(1)(h), required a program of not less than three
consecutive weeks' duration and work or courses requiring at
least ten hours per week, this criterion must be used to deter
mine whether the student is in full-time attendance at the
designated educational institution. Since the plaintiffs wife met
all the criteria set out in section 110(9)(a),(6) and (c), the
provisions of 110(1)(h) apply and the evidence shows compli
ance with its provisions.
M.N.R. v. Ritchie 71 DTC 5503, distinguished. Moore v.
M.N.R. 63 DTC 734, considered.
INCOME tax appeal.
COUNSEL:
Pauline Gaudet for plaintiff.
Jean-Paul Fortin, Q.C., for defendant.
SOLICITORS:
Pauline Gaudet, Hull, for plaintiff.
Deputy Attorney General of Canada for
defendant.
The following is the English version of the
reasons for judgment rendered by
DÉCARY J.: The question is whether plaintiff,
who is married with four children, was entitled to
deduct from his income for 1973 tuition fees of
$180 that he paid for his wife, whom he was
supporting in full while she was a full-time student
under section 110(1)(h) of the Act.
The Minister of National Revenue refused to
allow the deduction of these tuition fees in a notice
of reassessment dated May 12, 1975. Plaintiff filed
a notice of objection to the reassessment on May
23, 1975. The Minister of National Revenue sent
plaintiff a notification dated January 26, 1976,
confirming the said assessment, and stating that
plaintiff's wife had not been in full-time attend
ance at a designated educational institution within
the meaning of sections 110(1)(h) and 110(9) of
the Act. Plaintiff filed an appeal with the Tax
Review Board, but the Chairman dismissed his
appeal on November 17, 1976; hence the appeal to
this Court, which is a trial de novo.
Section 110(1)(h) reads as follows:
110. (1) For the purpose of computing the taxable income
of a taxpayer for a taxation year, there may be deducted from
his income for the year such of the following amounts as are
applicable:
(h) where the taxpayer was the supporting individual for the
year in respect of a student who was in full-time attendance
at a designated educational institution and enrolled in a
qualifying educational program at that institution, the
amount by which
(i) $50 multiplied by the number of months in the year
during which the student was so in attendance and was so
enrolled
exceeds
(ii) the amount, if any, of the taxable income for the year
of the student computed before making any deduction
under paragraph (g).
Section 110(1)(h) was introduced into the
Income Tax Act by S.C. 1973-74, c. 14, s. 35(6),
and is applicable under subsection 35(9) to the
taxation years 1972 et seq. This subsection reads
as follows:
35....
(9) Subsections (1), (3) to (6) and (8) are applicable to the
1972 and subsequent taxation years.
In the 1948 Act, R.S.C. 1952, c. 148, as amend
ed, there were no provisions similar to those in
section 110(1)(h) of the Act now in effect. Section
11(1) (qc) of the 1948 Act provided conditions
which had to be met by students claiming fees, but
there were no provisions with respect to these fees
when they were paid by an individual supporting
the student.
Section 11(1) (qc) read as follows:
11. (1) Notwithstanding paragraphs (a), (b) and (h) of
subsection (1) of section 12, the following amounts may be
deducted in computing the income of a taxpayer for a taxation
year:
(qc) where a taxpayer was during the year a student enrolled
at an educational institution in Canada
(i) that is a university, college or other educational institu
tion providing courses at a post-secondary school level,
(ii) that is a school operated by or on behalf of Her
Majesty in right of Canada or a province, a municipality in
Canada, or a municipal or public body performing a
function of government in Canada,
(iii) that is a high school or secondary school providing
courses leading to a secondary school certificate or
diploma that is a requirement for entrance to a college or
university, or
(iv) that is certified by the Minister of Manpower and
Immigration to be an educational institution by which
courses are conducted that provide or improve the qualifi
cations of a person for employment or for the carrying on
of a business or profession,
The provisions of section 11(1) (qc) of the 1948
Act became section 60(f) (S.C. 1970-71-72, c. 63)
of the Income Tax Act in effect in 1972. The
provisions were substantially the same as those in
section 11(1) (qc) of the 1948 Act:
60. There may be deducted in computing a taxpayer's
income for a taxation year such of the following amounts as are
applicable:
(J) where the taxpayer was during the year a student
enrolled at an educational institution in Canada
(i) that is a university, college or other educational institu
tion providing courses at a post-secondary school level,
(ii) that is a school operated by or on behalf of Her
Majesty in right of Canada or a province, a municipality in
Canada, or a municipal or public body performing a
function of government in Canada,
(iii) that is a high school or secondary school providing
courses leading to a secondary school certificate or
diploma that is a requirement for entrance to a college or
university, or
(iv) that is certified by the Minister of Manpower and
Immigration to be an educational institution by which
courses are conducted that provide or improve the qualifi
cations of a person for employment or for the carrying on
of a business or profession,
It should be noted that both these sections apply
only to cases where the student himself pays his
tuition fees.
When another individual pays the student's tui
tion fees, as well as supporting him, this individual
must be related to the student to be entitled to the
deduction provided for in section 1 10(1)(h), since
the provisions of section 1 10(9)(c) read as follows:
11o. (9) ...
(c) "supporting individual" for a taxation year in respect of
a student means an individual (in this paragraph referred to
as a "relative" of the student) who was during the year the
student's spouse, parent, grandparent, brother or sister,
except that
It has been proven that plaintiff supported the
student and that the latter was his spouse, that the
Ste. Foy College which the plaintiff's wife attend
ed was a designated educational institution, and
that she was enrolled in a qualifying educational
program.
A qualifying educational program is defined in
section 110(9)(b), which reads in part as follows:
110. ...
(9) For the purposes of paragraphs (I )(g) and (h),
(b) "qualifying educational program" means a program of
not less than 3 consecutive weeks duration that provides that
each student taking the program spend not less than 10 hours
per week on courses or work in the program, but, in relation
to any particular student, does not include any such program
This definition establishes two conditions: the
number of consecutive weeks during which the
course is given, and the number of hours per week
that must be spent on courses or work in the
program. It has been proven that the course in
question here was of more than three weeks' dura
tion, and that plaintiff's wife spent at least seven
teen hours per week, that is, seven hours in courses
at night (two 3 1 / 2 -hour sessions) and ten hours of
work for the courses.
It should be noted that the context of this
expression in the 1948 Act is not the same as that
of section 110(1)(h) of the Act. Section 110(1)(h)
provides conditions of application, defined in sec
tion 110(9)(a),(b) and (c). In my opinion, the
definitions can affect the meaning to be given to
the expression "student ... in full-time attend
ance".
The differences between sections 60(f) and
110(1)(h) would appear to be the following: the
taxpayer referred to in section 60(f) is the student
himself who pays his own tuition fees, whereas the
taxpayer referred to in section 110(1)(h) is the
parent who pays the tuition fees of the student he
supports. In section 60(f), the range of educational
institutions is very wide, whereas in section
110(1)(h) it is restricted to assistance for educa
tional programs.
I believe that these two distinctions should be
considered when examining precedents, since the
Court has never had to decide as to the scope of
the provisions in section 110(1)(h), which provide
for the deduction of tuition fees by the parent of
the student. I believe that it will prove useful to
examine the precedents nonetheless, keeping in
mind that the context is different for section
110(1)(h). Since the Ste. Foy CEGEP where Mrs.
Gaudet studied in 1973 is an educational institu
tion provided for under section 60(f)(iv) of the
aforementioned Act, she would have been entitled
to deduct her tuition fees from her taxable income
had she had one, and had she paid these fees
herself.
In the cases decided by the Tax Appeal Board,
the Exchequer Court and the Federal Court, the
meaning of the expression "student in full-time
attendance" (and "un étudiant qui suivait [les
cours] Ã plein temps" in French) in section
11(1) (qb) and in section 60(f) of the Act now in
effect, in respect of a student who pays his tuition
fees himself, had to be established.
Two contrary judgments were handed down, one
by Dumoulin J. of the Exchequer Court, affirming
by an oral decision from the Bench the judgment
of Mr. W. S. Fisher, then a Member of the Tax
Appeal Board, and the other by Heald J. of the
Federal Court. Each of these cases was decided on
the basis of the provisions of section 11(1)(qb) of
the 1948 Act, where the context is not the same as
for section 110(1) (h) of the Act in effect in 1973.
Consequently, I believe that I need not refer to the
precedents, except as to the manner of interpreting
section 110(1)(h), that is, whether it should be
liberally or strictly interpreted.
In Moore v. M.N.R.,' the late Mr. W. S. Fisher,
Q.C., Member of the Tax Appeal Board, stated
the following with respect to interpretation, at
pages 735 and 736:
I fully realize that there is a rule established by the Courts
that exemption provisions, including, no doubt, provisions
regarding deductions, should be strictly construed. This, how
ever, is an interpretation in connection with taxation statutes
which has been established by the Courts and is not found, so
far as I am aware, in any legislation enacted by the Parliament
of Canada. Indeed the Parliament of Canada, in s. 15 of the
Interpretation Act, c. 158, R.S.C. 1952, has provided as
follows:
15. Every Act and every provision and enactment thereof,
shall be deemed remedial, whether its immediate purport is
to direct the doing of any thing that Parliament deems to be
for the public good, or to prevent or punish the doing of any
thing that it deems contrary to the public good; and shall
accordingly receive such fair, large and liberal construction
and interpretation as will best ensure the attainment of the
object of the Act and of such provision or enactment,
according to its true intent, meaning and spirit. [The italics
are mine.]
This provision in the law as enacted by Parliament is one of
long standing, and if it comes in conflict with a rule established
by the Courts, it is my opinion that the parliamentary law
should take precedence if it is the opinion of the Court or a
Board that the true intent and spirit of the legislation enacted
by Parliament is of such a nature that it should not be
interpreted only in the narrowest sense which might be put
upon the specific words contained in the said legislation—
unless, of course, there is a very clear indication that Parlia
ment intended the words enacted by it to be open only to an
extremely strict interpretation within the terms of a set
definition.
From my reading of the provisions of paragraph (qb) (quoted
above), I am of the opinion that Parliament did not intend that
too strict an interpretation should be put upon either of the
following expressions "in full-time attendance" or `other edu
cational institution in Canada". Parliament was no doubt well
aware that many students, for example those in medicine,
spend only some seven or eight months at university during the
first two or three years of their course, and for the balance of
the year take employment in any number of types of occupation
in order to derive income from which they may be enabled to
pay, not only their medical school fees, but also their board and
lodging while in attendance at a medical college away from
home.
63 DTC 734.
Similar observations could be made in connection with stu
dents in dentistry, theology, or a number of other professions
where students must go through a prescribed course of instruc
tion in order to be fully qualified to offer their services to the
public in their chosen field, and surely Parliament must have
been aware of this situation when enacting its legislation and
when it used the term "in full-time attendance at a[n] ...
educational institution in Canada in a course at a post-second
ary school level."
As for the interpretation to be given to "attend-
ance", the following is stated at pages 739 and 740
of the same judgment:
In his notice of appeal to the Board, the appellant stated that
the correspondence course portion of his training and instruc
tion covered the period "from September through April, inclu
sive, with variations of a couple of weeks due to a varying
number of lessons in different years," and dealt with the theory
of accountancy. In the said notice of appeal, the appellant dealt
with the word "attendance", and submitted that physical
attendance was not necessary. He quoted the Oxford English
Dictionary as defining the word "attendance" as "the act of
attending", and since "attending" is the present participle of
the verb "to attend", he looked to the definition of "attend",
which read as follows: "1. To turn the mind to; 2. To apply
oneself to; or 3. Be present at." He submitted, therefore, that it
was very obvious, from the facts in connection with his own
case, that it was necessary for him to both "turn his mind to"
and "apply himself to" the course in question, and accordingly
he contended that the requirements of attendance, as stipulated
in the Income Tax Act, were met, beyond any doubt, in the
case of the chartered accountant's course. He submitted that it
was not necessary that there should be physical attendance at
any institution, although in fact there was physical attendance
by the appellant at his principal's office where he received his
practical instruction. The appellant contended that it was most
unreasonable and unrealistic for the respondent to attempt to
confine the meaning of the word "attendance" to the third
definition, only, and to argue that the meaning of "attendance"
was not met also by the first two definitions of the verb "to
attend" as quoted above.
At page 741 of the same judgment, it is stated
that:
In the light of all these representations, and the facts in
connection with this particular taxpayer's case, and my under
standing of the intention of the legislature when s. 11(1)(qb) of
the Income Tax Act was enacted, and in view of the "fair, large
and liberal construction and interpretation" which I think
should be given to the wording as contained in the said para
graph, I have reached the conclusion that this appeal should be
allowed for the reasons indicated above and, more particularly,
for the reasons outlined by the appellant in his notice of appeal
in support of the interpretations which he considers should be
put upon the words "full-time attendance" and "other educa
tional institution", with which I am in agreement.
This judgment was affirmed by the oral decision
of Dumoulin J., dismissing the appeal of the Min
ister of National Revenue.
The same interpretation of the provisions of
section 11(1) (qb) as in Moore v. M.N.R. was given
by Cecil L. Snyder, Q.C., Chairman of the Tax
Appeal Board, in Carson v. M.N.R., 2 where he
stated at page 426:
Tuition fees were paid by the appellant for a course which he
was required by the terms of his contract to pursue. In the year
1963, section 11(1)(qb) of the Income Tax Act permitted the
deduction of tuition fees paid by a student in full-time attend
ance at an educational institution in Canada in a course at a
post-secondary school level. This section was reviewed in Moore
v. Minister of National Revenue, 63 DTC 734, 33 Tax A.B.C.
160, and it was held that the instruction received by a student
in accountancy, articled to a chartered accountant who was a
member of the Institute of Chartered Accountants of British
Columbia, and pursuing his studies through a "correspondence
course", was instruction in a course at post-secondary school
level. It was decided that the appellant in the Moore case was
in full-time attendance at an educational institution and en
titled to deduction of his tuition fees. In the Moore appeal it
was further held by this Board, and the decision was affirmed
by oral judgment in the Exchequer Court of Canada, that the
provisions of section 11(1)(qb) should receive a fair, large and
liberal construction and interpretation to ensure the attainment
of the object of the Act. It would seem, indeed, that this was
the intent of Parliament because in 1964 paragraph (qc) was
enacted and it provided for the deduction of tuition fees paid to
an educational institution providing courses at a post-secondary
school level if such amount exceeded $25. This new enactment
did not require "full-time attendance" at an educational insti
tution. Of course, this paragraph (qc) is not applicable to the
taxation year 1963 but it seems to confirm the intention of
Parliament that tuition fees paid by a student pursuing a course
at post-secondary school level are deductible from his income in
any event. The appellant's evidence indicated that he continued
his studies commenced in the summer of 1963 throughout the
year with assistance from the principal of the school. This fact,
considered with the decision in the Moore case and the subse
quent enactment of paragraph (qc) of section 11(1), leads to
the conclusion that the appellant should be permitted to deduct
from his income tuition fees paid in 1963.
It should be noted that Chairman Snyder
referred to an amendment to the Act in the follow
ing year to try to determine the intent of Parlia
ment. In 1964, new provisions had been adopted,
those of section 11(1) (qc) of the 1948 Act, and at
page 426 ibid. it is stated that:
Although section 11(1)(qc), enacted in 1964, permits the
deduction of tuition fees paid by a taxpayer, it is noted that
2 66 DTC 424.
section 5(1)(a) which sets out specifically the deductions per
mitted from income received from an office or employment was
not amended in 1964 to include the deduction provided in
paragraph (qc) from income arising from an office or employ
ment. Surely it was not the intention of Parliament to deny to
employed persons the deduction set out in section 11(1)(qc).
Such an interpretation would lead to a distorted result to hold
that the provisions of section 11(1)(qc) are applicable only to
self-employed persons or those with income from other sources.
It is likely that paragraphs (qb) and (qc) of section 11(1) were
enacted to encourage students to pursue higher education and it
would defeat the purpose of the legislators if a narrow and
limited interpretation was given to these provisions.
I would respectfully distinguish the case at bar
from the judgment of Heald J. in M.N.R. v.
Ritchie' with respect to the interpretation to be
given to such provisions, because I believe that
section 110(1)(h) requires a more liberal interpre
tation, and further, I believe that the fact that the
case at bar comes under section 110(1)(h), where
the context is not the same as for section 11 (1) (qb)
of the 1948 Act, is sufficient in itself to distinguish
it from Ritchie.
In Ritchie, Heald J. did not have to consider
provisions similar to those in section 110(9)(a),(b)
and (c), which define the following expressions for
the purpose of sections 110(1)(g) and 110(1)(h):
"designated educational institution" in paragraph
(a), "qualifying educational program" in para
graph (b), and "supporting individual" in para
graph (c).
Section 110(9)(b), cited above, defines "qualify-
ing educational program" as a program of not less
than three consecutive weeks' duration in which
the student spends at least ten hours per week on
courses or work in the program.
There were no provisions similar to those in
section 110(9)(a),(b) and (c) in sections 11 (1)(qb)
and 11(1)(qc) of the 1948 Act, except the refer
ence to thirteen consecutive weeks for a university
outside Canada in section 11(1) (qb).
I believe that since Parliament required in sec
tion 110(9)(b) for the purposes of section
110(1)(h) a program of not less than three con
secutive weeks' duration and courses or work
3 71 DTC 5503.
requiring at least ten hours per week, this criterion
can and must be used to determine whether a
student is in full-time attendance at a designated
educational institution.
Since the wife of plaintiff was enrolled in a
program of thirteen consecutive weeks' duration,
with seven hours of courses and ten hours of work
per week, since plaintiff met the requirements of
section 110(9)(a), which defines a "designated
educational institution", and the Ste. Foy CEGEP
is such an institution, and since plaintiff also met
the requirements of section 110(9)(c), which
defines a "supporting individual", I believe that
the provisions of section 110(1)(h) apply: all the
requirements of section 110(1)(h) have been met,
as is shown by the evidence. Consequently, plain
tiff is entitled to deduct $200 from his taxable
income for 1973, this amount being equal to the
sum of $50 for each month during which his wife
was taking the course, as provided for in the
aforementioned section.
I firmly believe that the definition of "qualifying
educational program" in section 110(9)(b) pro
vides us with a useful and reasonable criterion of
whether a person is a "student . .. in full-time
attendance at a designated educational institution"
for the purposes of section 110(1)(h). A person fits
this description when he attends a designated edu
cational institution and is enrolled in a course of
the duration provided for in section 110(9)(b), that
is, a course of not less than three consecutive
weeks' duration, and spends a minimum of ten
hours per week on courses or work in the program.
Had Parliament intended us to refer to the
personal qualifications of the student, as was
maintained at the hearing, I do not see why it
would have legislated as it did in section
110(9)(b).
This interpretation of section 110(1)(h), which,
on the one hand, avoids considering each student's
case with respect to the time available for his
training program, and on the other hand, enables
us to judge clearly whether a student qualifies as a
student in full-time attendance at a designated
educational institution, appears to correspond very
well with the intent of Parliament.
The fact that the wife of plaintiff was con
sidered a part-time student by the institution she
attended for purposes of establishing tuition fees
does not mean that she has to be considered as
such, that is, a part-time student for the purposes
of income tax, since Parliament provided in section
110(9)(b) that a minimum of three consecutive
weeks and ten hours of courses or work in the
program per week will be considered sufficient to
be entitled to the deduction under section
110(1)(h) of the Act, provided that all other con
ditions are met.
This designation by the educational institution
does not bind the Department any more than the
designation of capital with respect to a payment
received by one of the parties to a contract affects
it if this payment is considered to be income under
a provision of the Act or by the courts.
Further, I believe that this interpretation of
section 110(1)(h) does away with all possibilities
of discrimination, since there is a fixed criterion
with regard to the duration and no reference to the
individual situation of the student.
The appeal of plaintiff is therefore allowed and
the assessment cancelled, and defendant will pay
the costs of the case.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.