Delmer E Taylor:—This is an appeal against an income tax assessment in which the Minister of National Revenue disallowed a deduction of $17,057.13 claimed for the year 1973 as tuition fees. The respondent relied inter alia upon subsection 15(1), and paragraphs 60(e), (f) and
(g) of the Income Tax Act, SC 1970-71-72, c. 63, as amended.
Facts
The appellant is an airline pilot with Wardair Canada Ltd and the training in question was for skills he required for such employment in flying Boeing 707 aircraft for the Company. Such training could be taken in Canada on other aircraft—Boeing 727, 737 and 747—but not the 707. His arrangements were made with the student training facilities of Western Air Lines, Inc of Los Angeles, California, obviously not an academic institution in Canada, and agreed by both parties not approved for such training by the Government of Canada. The result of the added proficiency gained by the appellant has been a substantial increase in earning capacity.
Contentions
The appellant’s position can be summarized as pointing up a deficiency he perceived in the Income Tax Act which affected him adversely for no apparent sensible reason.
Evidence and Argument
The appellant reviewed the facts with the Board, pointing out that almost any type of aircraft flying training (even personal and for pleasure) was deductible to the extent of the tuition fees and that had the training been available in Canada he would certainly have taken it in this country.
From the respondent’s viewpoint, although there could be nothing but- sympathy for the apparent dilemma the income tax law and regulations caused to this taxpayer and nothing but commendation for his effort in pursuing his employment goal, the matter by definition was itself outside the provisions allowing a deduction under the Act
—the institution was not accredited and it was not in Canada.
Findings
It may appear that to deny deductibility of training cost on a Boeing 707, paid for at personal expense even though taken outside Canada, while allowing similar training on the other Boeing aircraft is patently unfair. That however is not precisely the point at issue. Training on Boeing 727, 737 and 747 aircraft is available in Canada but if, for any reason, the appellant had acquired such training and had chosen to take it (on 727, 737 and 747) outside Canada at a nonaccredited institution, such cost incurred would not have been deductible either. It can only be assumed that the fundamental position of the Parliament of Canada, in allowing tuition fee deductibility, was to reflect the general need in employment skills of Canada, and provide for these to the greatest degree practical in taxable deductions, in Canadian institutions. It is unavoidable in my view that there would remain advanced academic and professional specialties for career and income earning improvement for which the training would not be provided in this country. I would believe this to be particularly true in medicine and science, although probably of some consequence in every field of endeavour. A small provision for certain circumstances is reflected in paragraph 60(g) of the Act when a taxpayer commutes to an institution outside this country, but this apparently gives relief only because of the proximity of some Canadian taxpayers to the border, and does not appear to me to indicate any modification of the general principle evident in the requirements for tuition fee deductibility—an accredited institution in Canada. The appellant made a very strong point that such training (outside Canada at a non-accredited institution) paid for by an employer (eg Wardair) would have been deductible by that corporation. Counsel for the respondent agreed that this would probably be the case. One could draw from that (as was done by the appellant) a further inconsistency—the legislators of Canada “subsidizing” one expense (that of the corporation) and refusing the other (that of the individual) for precisely the same training. It should be noted, there is at least one difference—that it appears Parliament would observe. In the case of the corporation (eg Wardair) the training presumably would be designed to provide employment in Canada by a Canadian company; in the case of the individual it would be to seek employment (although perhaps with some prior assurance) and that employment or practice of the newly acquired skills might be in Canada or might be outside of Canada.
This appellant regards the expense involved in his Boeing 707 training as providing him with skills which have allowed him to earn greater income and thereby contribute, through income taxes, greater amounts to the Canadian economy. This is an understandable perspective and one often raised in these circumstances. It is equally valid however, that, if the initial expenditure claimed is to be subsidized (through income tax deductibility) by all the taxpayers of Canada and the additional or special skills acquired available thereafter solely at the discretion and disposition of the appellant, this should be done within rules and regulations designed (however inadequately or incompletely) to utilize to the utmost the training facilities currently in Canada. Presumably this would provide the skills deemed by Parliament as most needed in Canada. That any citizen might for good reasons wish to acquire other skills (the training for which is not available in Canada) is highly commendable and in many cases of great benefit to Canada. However, it is evident that Parliament has attempted in the legislation to support, through income tax deductions, a broad spectrum of requirements, rather than trying to accommodate each specific situation. The basis of that effort by Parliament is clear, and it does not include the appellant’s case.
Decision
The appeal is dismissed.
Appeal dismissed.