Posts tagged tuition
The dean of McGill University’s Faculty of Law, Daniel Jutras, released his report last week about a disturbing violent incident at the heart of McGill’s downtown campus on November 10, which grew out of a massive protest on impending tuition increases that involved tens of thousands of student marchers.
According to the CBC and the Montreal Gazette, several students occupied part of the administration building and the office of McGill’s principal, Heather Monroe-Blum (Wikipedia), but the most contentious issue appears to have been the involvement of riot police and the use of shields and pepper spray.
Justras was asked in mid-November by the Principal to investigate the events surrounding the violence and to make any recommendations he considered to be appropriate. It appears he went to considerable lengths to engage in a proper fact-finding mission, which adds to the legitimacy of an internal inquiry on a very divisive issue.
(Full disclosure: I had Jutras as a professor for several classes when I was at McGill, and I thought he was an excellent teacher, wonderfully brilliant and always willing to engage every perspective and argument – which appears to come through in the report.)
His recommendations are valuable to any university administrator intent on addressing concerning aspects of campus activism, particularly:
Recommendation 1: University authorities should provide and participate in a forum open to all members of the University community to discuss the meaning and scope of the rights of free expression and peaceful assembly on campus.
Jutras emphasizes that students at McGill have broad rights of free expression, which are reflected in Article 25 of the Charter of Students’ Rights:
Every student enjoys within the University the freedoms of opinion, of expression, and of peaceful assembly.
However, he also makes clear that there are administrative procedures in place to regulate free speech and assembly on campus, and there are limits on those rights to avoid harm from befalling other students or university staff or property. He teased apart the various challenges in defining the term “peaceful assembly”.
Again, this is an important read for anyone looking to have a sophisticated conversation about some of the legal issues connected to campus activism.
Clark Wilson LLP released an excellent edition this morning of its “Campus Counsel” newsletter, which deals with the legislative autonomy granted to student societies. I reproduce it in full below.
The Vancouver Province newspaper has recently reported on problems of the Kwantlen Student Association (the student society at Kwantlen Polytechnic University), which is involved in three legal actions. At the centre of these problems are questions regarding financial management by Kwantlen Student Association. As the Vancouver Sun reports, controversy and litigation regarding the financial management of the student societies of British Columbia institutions of higher learning is not new, with past instances arising at Douglas College in 2006 and at the University of Victoria in 2001. This article is a brief review of the legal framework within which these controversies arise.
In both the University Act and the College and Institute Act, a “student society” is defined as an organization incorporated as a society under the Society Act whose purpose is to represent the interests of the general student body, but does not include a provincial or national student organization. By definition, all student societies in British Columbia are created under the Society Act and, as a result, they are legal entities which are separate and apart from their respective academic institutions, with internal governance which is different from that of their institutions.
Section 21 of the College and Institute Act and section 27.1 of the University Act deal with student fees and are almost identical. In essence, the boards of colleges, institutes and universities are required to collect and remit student society fees to the respective student societies of their institutions. Neither statute stipulates the purposes for which student fees may be collected or imposes any controls on how they are administered. Both statutes permit a student society to increase student fees if authorized by student referendum.
Section 27.1 of the University Act and section 21 of the College and Institute Act were introduced pursuant to the Miscellaneous Statutes Amendment Act (No. 3) 1999. Certainly, from the perspective of business efficacy, it makes sense that student fees be collected with tuition; however, according to Hansard, there was no legislative debate focused on these sections when they were grafted onto the legislation. Accordingly, the rationale behind these provisions is not clear, although the Vancouver Province reported that the changes were the result of lobbying by the Canadian Federation of Students, requesting more autonomy. One presumes that a key objective of the legislation regarding student fees was to ensure the independence of student societies and that they have the means to achieve student goals, as determined by the students, and not the administration.
Pursuant to both the University Act and the College and Institute Act, the board of a college, institute or university may only stop collecting and remitting student fees if its student society does not make audited financial statements available or if the student society is struck off the register pursuant to section 71 of the Society Act. Otherwise, an institution’s board has no right to direct the purposes for which student fees are collected or how the fees are administered after they have been remitted to its student society. From the perspective of most students, they pay one global amount to their institution for their education and related benefits and services and often do not distinguish the amount being paid over to a student society. Many students may wrongly assume that their institutions administer or at least monitor how student fees are handled. A failure on the part of a student society to properly administer its resources may therefore affect the reputation of the institution as a whole, even though it has limited ability to manage the situation. Nevertheless, absent legislative change, the boards of British Columbia academic institutions are not in a position to intervene in their student societies’ affairs.
Some student societies work closely with their institution’s administration and share resources or facilities and agree to make payments to their institutions in respect of such arrangements. Other student societies carefully guard their independence. The legislation does not provide a specific mechanism for academic institutions to recoup the cost of services of facilities that they provide to their student societies nor does it constrain the kinds of agreements that an academic institution may enter into with its student society. As the institutions and student societies are separate and independent legal entities, they are free to enter into legally binding agreements which govern their relationship. These agreements may include binding obligations on the part of a student society to pay funds derived from student fees to their institutions for services rendered or facilities provided by the institution to the student society. These agreements may also include mechanisms pursuant to which such obligations may be satisfied from the amounts to be remitted by the institution to its student society.
In light of the controversies that have arisen in recent years, it may be time to review the provisions of the University Act and College and Institute Act which apply to student fees.
Teachers in the private school system often enjoy the perk of being able to send their kids to the school they teach at with the help of a considerable discount on the tuition amounts normally paid by other parents. This usually involves getting to send a child to their school for half the amount other parents shell out, or in some cases being able to do it for free. Schools, as employers, do this for a number of reasons, including:
- Like any other employee perk, it incentivizes good job performance and attracts stronger teacher candidates.
- It shows other parents that teachers think highly enough of the school to send their own children there.
- It encourages teachers to feel more invested in the organization they work for, and without the discount they likely wouldn’t be able to enroll their children.
Other parents at the school often agree with the policy on the basis that teachers “don’t get paid enough anyways”. The problem is that when tax season comes, this perk isn’t a pure windfall for the teachers – like any perk that isn’t strictly necessary for job performance it will be taxable in the hands of the teacher, as if the value of the perk was added on to the teacher’s salary. Here is a link to the Canada Revenue Agency’s guide on taxable benefits. The basic idea is that anything an employer gives an employee because of their employment that is for a personal rather than profession purpose is generally going to be treated as if it was a bump in their salary (and hence they have to pay more tax than they would otherwise have to). For example, when an employer pays for an employee’s buspass, the amount the employer pays will be treated as if it was part of the employee’s salary. Paying for an employee to fly to Las Vegas and stay in a comfy hotel for the purpose of representing the company at a conference – generally not a taxable benefit.
The challenging part of the analysis for the courts isn’t whether some expense paid by an employer is a taxable benefit but how much that benefit was worth to the employee (and how much income tax they should have to pay on it).
When it comes to teachers, how do you put a value on a tuition discount?
The Federal Court of Appeal ruled last week (CanLII) that private school teachers who receive tuition discounts for their children’s enrollment have to pay tax on the full value of the discount. Jamie Golombek summarized the decision well in this article in the Financial Post. In a nutshell, he writes: “the value of the free tuition was the difference between the normal tuition fee less the amounts actually paid.”
The debate on this issue involves two different positions on the method of valuation. The first position, which was argued by the teachers in this case, is that the value of the taxable benefit should be the amount the benefit costs to the employer. In other words, suppose a private school charges $10,000 per student in tuition. If the cost of educating a teacher’s son costs the school an extra $6,000 and the teacher, with a tuition discount, pays $5,000, then the teacher should only be taxed on the balance ($1,000) and not on the amount they saved had they not been a teacher.
The other position in the debate, and the one accepted by the court, is that they teacher should be taxed on the whole $5,000, and the cost to the school is irrelevant. Here is how it is explained by tax professor Kim Brooks, who was cited in the decision:
Employers can often provide some goods or services to employees at very little cost to themselves. It is sometimes argued as a result that because these benefits are provided at no substantial cost to employers, they should not be taxed in the hands of employees. However, the obvious reason for discarding this test is that it is the employee’s income that is in issue. The employer’s cost of providing these goods is irrelevant to this issue.
The “cost to the employer” method assumes that the value of the benefit to the employee will equal the cost of the benefit to the employer. Both of these empirical assumptions are wrong. Employees may receive a huge personal benefit from employer-provided goods and services even though they cannot sell the goods and services, and there is no reason for supposing that the value of a benefit to an employee should be in any way related to its cost to the employer.
The court’s ruling overturned the earlier decision (CanLII) of the Tax Court of Canada, which disagreed with Professor Brooks in this context.
Since these tuition discounts can mean a big benefit for teachers, it is important that teachers understand the tax implications of accepting this perk. If they can’t otherwise afford to pay the regular tuition amount, they may possibly have trouble paying the tax on the perk, in which case it may be necessary for them to decline altogether. Their employers, too, should have a sense of how courts treat these discounts and, without giving their employees any tax advice, schools may want to alert teachers to this issue.
Bradley Head, Director of Academic Affairs for the Kwantlen Student Association, announced (BClocalnews.com) recently that the KSA is considering taking legal action against the Kwantlen Polytechnic University over its recent decision to refuse to accept credit cards for tuition payments. Kwantlen’s decision appears to reflect a position shared with other major universities in the province.
The exception to this restriction: international students. They can continue to pay tuition by credit card. The university justifies this distinction on the basis that international student do not have the same banking options as non-international students given their immigration issues. The KSA is now considering out loud whether this distinction amounts to discrimination that violates principles of human rights law. Whether the KSA actually commences a lawsuit on this basis is another matter, but the threat does raise the question of what human rights legislation would apply. The news piece refers to a lawyer suggesting that Kwantlen’s decision amounts to a violation of “the Charter of Rights and Freedoms and B.C. Human Rights Code”.
Universities, particularly those in British Columbia, are likely familiar with how the Canadian human rights regime applies to public bodies and private bodies and where universities and other educational institutions fall among those categories. In addition to other potential issues that may be raised by the KSA, the question of whether the Canadian Charter of Rights and Freedoms applies to universities has been considered in several prominent decisions:
- In McKinney v. University of Guelph (CanLII), eight professors and a librarian applied for a declaration that the university’s policy of mandatory retirement at age 65 was a violation of the equal protection provision of the Charter. La Forest J. of the Supreme Court of Canada found that the Charter does not apply to the university’s decision and even if it did the policy was justified.
- In Harrison v. University of British Columbia (CanLII), there was a similar claim and a similar outcome. Former employees of UBC who were let go through a mandatory retirement policy at age 65 sought a declaration that the policy violated s. 15 of the Charter. Dickson C.J. of the Supreme Court of Canada applied the tests set up in McKinney and denied that the Charter applied to the university.
- In Maughan v. University of British Columbia (CanLII), which I discuss in a previous post, a graduate student alleged that she suffered discrimination at the hands of the university and tried to turn it into a Charter claim. The British Columbia Court of Appeal soundly rejected her argument, saying that UBC is not a government actor.
The rationale behind this position is that the Charter is structured to serve as a check on government power; it doesn’t apply to every institution, organization or business. Universities, by and large, fall outside the scope. Accordingly, La Forest wrote as follows in McKinney:
The government thus has no legal power to control the universities even if it wished to do so…
The fact is that the universities are autonomous, they have boards of governors, or a governing council, the majority of whose members are elected or appointed independent of government. They pursue their own goals within the legislated limitations of their incorporation…
The legal autonomy of the universities is fully buttressed by their traditional position in society. Any attempt by government to influence university decisions, especially decisions regarding appointment, tenure and dismissal of academic staff, would be strenuously resisted by the universities on the basis that this could lead to breaches of academic freedom. In a word, these are not government decisions. Though the legislature may determine much of the environment in which universities operate, the reality is that they function as autonomous bodies within that environment. There may be situations in respect of specific activities where it can fairly be said that the decision is that of the government, or that the government sufficiently partakes in the decision as to make it an act of government, but there is nothing here to indicate any participation in the decision by the government …
The human rights law that may apply is the Human Rights Code (UBC), which sets out the following at s. 8(1) (BCLaws):
(1) A person must not, without a bona fide and reasonable justification,
(a) deny to a person or class of persons any accommodation, service or facility customarily available to the public, or
(b) discriminate against a person or class of persons regarding any accommodation, service or facility customarily available to the public
because of the race, colour, ancestry, place of origin, religion, marital status, family status, physical or mental disability, sex, sexual orientation or age of that person or class of persons.
It is always challenging to try to learn legal information from the media. Regardless what KSA decides to do in these circumstances, they would be wise to explore each possible law that may apply in terms of crafting a human rights complaint.