Principal Issues: [TaxInterpretations translation]
Does interest paid on a loan received under the S.P.R.I.N.T. program qualify for the tax credit for interest on student loans under section 118.62 of the Income Tax Act?
Position:
No.
Reasons:
A loan received under the S.P.R.I.N.T. program is not a loan made under a statute stipulated in section 118.62 of the Act.
November 29, 2000
Quebec Tax Services Office Headquarters
Nancy Deslandes
Client ServicesAttention: Ms. Lise Potvin 2000-005143
S.P.R.I.N.T Program and Section 118.62
This is in response to your fax of October 13, 2000, in which you requested our opinion on the above subject.
Situation:
The S.P.R.I.N.T. program, which was abolished in 1999, was a program of grants and individual loans paid to workers who, having lost their jobs, returned to school to upgrade their skills in another field. The program had three components: a training benefit, a deduction from Quebec income tax payable on repayment of the loans granted, and a loan guarantee. You referred to technical interpretation F9221855, which explains the tax treatment of grants received. You wish to know our position on the deductibility of interest, related to loans granted by this program, under section 118.62 of the Income Tax Act (the “Act”).
Our Comments:
The credit for interest on student loans is provided for in section 118.62. One of the essential conditions for the application of this section is that the loan be granted under the Canada Student Loans Act, the Canada Student Financial Assistance Act or a law of a province governing the granting of financial assistance to students at the post-secondary school level.
In Quebec, the law governing the granting of financial assistance to post-secondary students is the Act respecting financial assistance for education expenses. Based on the information obtained, it appears that the S.P.R.I.N.T program was created by a Ministerial order issued by the Ministère de la Solidarité Sociale [Ministry of Social Solidarity]. The loans granted under this program were therefore not granted under the terms of either the Canada Student Loans Act, the Canada Student Financial Assistance Act or similar provincial legislation. Consequently, interest paid by an individual in respect of a loan granted under the S.P.R.I.N.T. program does not qualify for the tax credit for interest on student loan under section 118.62.
We hope you find these comments useful.
Ghislaine Landry, CGA
Acting Manager
Individuals and Business Section
Business and Publications Division
Income Tax Rulings Directorate
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