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4. Certification of Educational Institutions

Human Resources Social Development Canada (HRSDC) Certification Policy for Private Educational Institutes

1. Background

The purpose of certifying private educational institutions that provide courses specifically designed to build occupational skills is to allow students, 16 years of age or more, who attend courses at these educational institutions to qualify for Tuition Tax Credits in recognition for these tuition costs and, in cases of full-time attendance, for Education Tax Credits.

2. Legal Authority

The Authority for the Minister of Human Resources and Social Development (HRSD) to certify institutions (i.e. certifying in effect, that these EI’s provide or improve occupational skills, as set out in Sections 118.5 and 118.6 of the Income Tax Act, or the purpose of entitling them to provide tuition tax receipt, was first established in 1988 by the Minister of Employment and Immigration Canada and the power was then transferred to the Minister of Human Resources and Development Canada effective July 12, 1996 (S.C. 1996, ch 11, s.95).

3. List of Certified Private Institutions in Canada

HRSD maintains the List of Certified Private Canadian Educational Institutions. Given that certification of an educational institution is valid from January 1 to December 31 of a given year, the list is updated at the beginning of the following year and provided to CRA for the previous taxation year.

4. Eligibility Criteria

Eligibility criteria for certification are established by the Minister of HRSD and delegated to the Canada Student Loans Directorate. Eligibility criteria may change, to reflect occupational skill requirement s for example, as well as any changes, to the Income Tax Act or to the Income Tax Regulations. Certification from HRSD occurs only when an educational institution in Canada provides courses (other than courses designed for university credit) that furnish a student with skills for, or improve a student’s skills in, an occupation (paragraph 118.5(1)(a)(ii).

To be eligible for certification an institution must:

• Have a legally registered business name and give courses or training in Canada;
• Be a private school or college, a professional organization or business providing courses, other than courses designed for university credits;
• Offer a qualifying educational program, that is, courses specifically designed to furnish a person with skills, for, or to improve a person’s skills in a recognized occupation. (Consult Appendix A for further details).
• Be provincially licensed as a private vocational, trade school, or the equivalent, if that is a requirement in the province/territory where the courses are given.
• Submit a written request for certification to the Minister of HRSD by December 31 of a given year to:

5. Application Process

Requests for certification must be received by December 31 of a given year for the certification to be effective for that same tax year.

Applicants for certification must provide to HRSD copies of:

• Certificate of registration (provincial license) or written statement from the provincial/territorial authority that no license is required for online (internet) or correspondence courses outside the home province a license or written statement from all provincial/territorial authorities is required as training is a provincial/territorial responsibility.
• legal registration of the operating/firm name of the institution (i.e. a numbered company is not accepted)
• flight training schools and clubs are required to provide a copy of the operating certificate from Transport Canada;
• the list of occupations for which training is given by the institution that furnishes students with occupationally specific skills sufficient to work in the occupation or to improve these skills; Please specify if the students will be taking this course to upgrade their skills in their present occupation.
• a description of each of the courses, including pedagogical content, duration, costs, types of participants and certificates issued upon completion;
• if more than one location, a separate application must be completed for each address; and,
• the name (in block letters and original signature) of the individual (owner/president/Director General) who, on the basis of the information given to HRSD and the material attached is duly authorized to apply for certification on behalf of the institution.

6. Determination Process

HRSD will review the documentation provided and ensure that the courses offered are eligible for certification.^Footnote1 If any documentation is missing, a “lack of information letter” will be sent by mail and/or by fax to the applicant, requesting that the concerned documentation be provided to HRSD within 30 days. If the required documentation is not received within the 30-day delay and, if the applicant has not requested an extension, the file will automatically be closed, as stated in the lack of information letter.

CRA will be contacted if there is a question about whether or not the course is provided at the post-secondary level. A copy of the documents will be forwarded to CRA for their review. Upon CRA’s review, if the course is found to be at the post-secondary level then CRA will advise HRSD. HRSD will afterwards send a standard letter to the client on behalf of CRA and if the institution also offer courses that can be certified by HRSD then HRSD will send a letter to the client on behalf of both department which states the following:

Your request to be certified as an educational institution, under the name and address shown above, has been approved by the Minister of Human Resources and Skills Development Canada under Sections 118.5 and 118.6 of the Income Tax Act. Furthermore, because you also provide training at the post-secondary level, CRA has recognized your educational institution under subparagraph 118.5(1)(a)(i) of the Income Tax Act.

Once the review is completed, HRSD will inform the applicant, in writing, of the decision reached. If the institution is certified, the applicant must keep the letter for Income Tax purposes.

7. Duration of Certification

Certification of an educational institution for the purpose of the Tax Credit is valid for a period of up to five fiscal years, subject to review.

HRSD needs to be informed of any of the following changes: name (owner to provide new legal registration certificate), address, courses (provide content, duration, costs, type of participants, etc.) during the certification period, as stipulated in the original approval letter. The applicant will be informed in writing of the certification status of the new courses.

8. Revision Process

After the five-year period, a revision letter is sent to the certified educational institutions, along with a new application package. The owner is required to go through the certification process by completing the certification questionnaire and provide HRSD with the required information and documentation within 60 days. A review of this information will determine as to whether the educational institutions still meet the certification criteria. If the required information is not received by HRSD with the 60-day delay, the certification status of the educational institution will be removed and the file will be automatically closed, as stipulated in the revision letter. Certification will also be revoked if courses no longer meet the certification criteria, if the provincial license or letter of exemption is not provided. In the case of revision, the legal registration is not required, unless there has been a name change, as it was already provided to HRSD at the time of the original application.

This process enables HRSD to maintain an adequate list of certified private educational institutions in Canada, which is provided to Canada Revenue Agency on a yearly basis for the ongoing taxation period.

9. Appeal Process

If the applicant does not agree with HRSD’s decision regarding certification, she/he may appeal this decision within 30 days of receiving the decision letter by requesting, in writing, a further review of their file. Additional information may be provided at this time by the educational institution.

A review will be conducted on the material originally submitted, along with any further information provided at the time of the appeal. Once the review process is completed, HRSD will inform the applicant in writing of the decision reached.

10. De-certification

Rational

Educational Institutions may be de-certified if the courses no longer meet the certification criteria or if they fail to provide the required information/documentation for the revision in the fifth fiscal year from the date of original certification and every 5 years from there after.

Procedure

• If during a review HRSD determines that an educational institution no longer meets the certification requirements, certification will be revoked.
• If courses are no longer eligible for certification due to changes in the Income Tax Act, certification will be revoked.
• If the information provided by the applicant clearly demonstrates that the courses offered do not lead to an occupation or upgrade a person’s skills, certification will be revoked.
• A letter is sent by HRSD to the educational institution, indicating that the certification will be revoked on December 31 of the current year. The reason for de-certification is explained and the appeal process is outlined. If the educational Institution does not appeal this decision or is unsuccessful in its appeal. The educational institution is then removed from the list of Certification of Private Canadian Educational Institutions, which is maintained by HRSD.

11. Retroactivity

There is no regulatory provision in the Income Tax Act allowing for retroactivity. However, the Minister of HRSD may allow retroactivity in exceptional cases (i.e. if an educational institution has been operating for less than one year) and requests will be treated on a case-by-case basis which may also require a provincial license for the year of retro request in the case where institutions need to be provincially licensed.

Appendix A: Occupational Courses - Definition of Terms

In order for a course to be considered as furnishing a student with skills for an occupation the course must directly lead to an occupation (a trade) i.e. Teacher, Tutor, Instructor, programmer, Nurse, etc.

The following are examples of courses that are being certified because some students are taking them to acquire skills for an occupation:

Recreational/Social Courses: Example: Dance/Music

While these courses can be taken for recreational/social purpose at the same time they can be taken towards an occupation in that field. As such, these types of courses will be eligible for certification to the extent that it is shown that they are being taken to work in that field as a teacher, instructor, or a professional in that field of work and/or if an institution offers upgrading courses for teachers, instructors, or professionals in that field then it can also be eligible as upgrading the skills in an occupation.

Adult Basic Education:

Courses taken to upgrade the individual’s skills in his/her present occupation will be certified, if these skills are required to perform their occupation.

Note – Math, Science and basic education at the secondary school level will not qualify. However, if an adult education offers occupational courses then can be eligible such as: Office Administration, Management Studies, Health: Nursing Access Program, Teacher Education, Carpentry etc. these are considered eligible and as such, this educational institution will be certified.

Reading and Spelling Systems

Courses taken to upgrade reading and spelling skills of individual’s in their present occupation will be certified.

Second Language:

Courses can be taken to upgrade a individual skills in his/her present occupation if these skills are required to perform their present occupation.

Driving Schools

Training taken to obtain a license of commercial nature will be certified, however basic driver training provides a personal benefit and as such will not be certified by HRSD.

Religion

Similarly, training taken to become a Minister, Priest, or training that will upgrade the skills of a student in an occupation will be certified, however personal religious courses that do not lead to an occupation or upgrade the skills in that occupation will not be certified.

Reading and Writing Courses

A course that is taken to improve the student's reading and writing levels in order for the student to improve those skills for their present occupation will be certified.

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¹ Consult Appendix A for definitions used by HRSD in determining whether a course provides occupational skills. Return to reference 1.

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Date Modified:

2011-12-06