Does the term "commuting" also include "telecommuting?" A tax case decided last
month dealing with the tax treatment of post-secondary tuition fees had to make
that determination.
Christine Wellington works for a community health centre as a registered
dietitian. To maintain her membership in the Ontario College of Dietitians, she
is required to regularly take continuing education courses.
In 2001, Ms. Wellington decided to enroll, part-time, in a distance-learning
course leading to a post-graduate degree in dietetics at Finch University of
Health Sciences/The Chicago Medical School in Illinois. All the classes were
presented over the Internet and the exam was also administered online.
Since Ms. Wellington's employer did not cover the cost of the course, she was
counting on the tuition credit, since she paid more than $9,000 in tuition fees
in 2001. In September, 2002, she was both "surprised and disappointed" to learn
that the Canada Revenue Agency denied her claim for the tuition credit.
Under the Income Tax Act, Canadian students can claim a tax credit for
tuition fees paid to a university, college, or other educational institution in
Canada. If the university is outside of Canada, the tuition fees only qualify if
the student was enrolled in a course leading to a degree on a full-time basis.
Part-time tuition fees paid to a U.S. institution may still be eligible for the
credit but only if the student "commuted" to the school.
The main question before the Tax Court was whether a person who pursues a
course at a distant university through the Internet "commutes" to that
university.
Ms. Wellington tried to convince the court "that the word 'commute' has
evolved to include 'telecommute.' In so doing, she cited the Oxford
International Dictionary, which defines commute as "to change, to exchange, to
interchange." She also argued that the "spirit and intent" of the Act supports
her position.
The CRA disagreed and felt that "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.
One of the basic principles of tax law interpretation is that, absent any
ambiguity, the plain meaning of the words in the Income Tax Act should be
applied. Since the term "commute" is not specifically defined in the Act, the
judge concluded the meaning of "commute" in this context requires physical
movement, and therefore does not include "telecommute."
"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."
The judge therefore ruled that Ms. Wellington was not entitled to the tuition
credit. He did, however, invite Parliament to modernize the law: "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 [these rules] to reflect this
transformation."