Tax Court Rejects Student Loan Remittance as Taxable Income

OUTCOME: Allowed

Docket: 2025-2047(IT)I BETWEEN: [APPELLANT] Appellant, and HIS [NAME] THE [NAME], Respondent . Appeal heard on January 20, 2026, at Halifax, Nova Scotia Before: The [NAME] [NAME] [NAME] : For the Appellant: [redacted] Counsel for the Respondent: [redacted] The appeal of the reassessment of the appellant’s 2023 taxation year, raised September 3, 2025 per the federal Income Tax Act is allowed, and the reassessment is referred back to the [NAME] for reconsideration and reassessment on the basis that the amount of $5,423 is not taxable income, as addressed in the Reasons for Judgment associated herewith; the whole without costs. Signed this 16th day of June 2026. [NAME]. [NAME]” [NAME] J. Citation: 2026 TCC 113 Date: 20260616 Docket: 2025-2047(IT)I BETWEEN: [APPELLANT], Appellant, and HIS [NAME] THE [NAME], Respondent.

REASONS FOR

JUDGMENT [NAME] J.

I. Introduction: [ 1 ] The appellant, Ms. M. [APPELLANT], appeals the reassessment of her 2023 taxation year, raised September 3, 2025 by the [NAME] (Minister) under the federal Income Tax Act (Act). [ 2 ] The appellant specifically appeals the amount of $5,423 being included in taxable income, as reflected in the appealed reassessment. That amount is what amount the [NAME] in 2023 remitted to the [NAME]’s [NAME] loan debt account for the appellant. The appellant did not receive this amount personally. [ 3 ] Currently the appellant works as a schoolteacher (having completed being a [COMPANY] in 2021) and makes monthly payments reducing the balance of her [NAME] loan debt account.

II. Issue: [ 4 ] The issue is whether the $5,423 remitted by the [NAME] in 2023 to the appellant’s [NAME] loan debt account is taxable income as reassessed by the Minister per paragraph 56(1)(n) of the Act.

III. Law: [ 5 ] The Minister reassessed the remitted amount on the basis of paragraph 56(1)(n) of the Act. That provision provides: 56(1) Amounts to be included in income for year - Without restricting the generality of section 3, there shall be included in computing the income of the [NAME] for a taxation year… (n ) scholarships, bursaries, etc. - the amount if any by which (i) the total of all amounts (other than amounts described in paragraph (q), amounts received in the course of business, and amounts received in respect of, in the course of or by virtue of an office or employment) received by the [NAME] in the year, each of which is an amount received by the [NAME] as or on account of a scholarship, fellowship or bursary, or a prize for achievement in a field of endeavour ordinarily carried on by the [NAME] (other than a prescribed prize) exceeds (ii) the [NAME]'s scholarship exemption for the year computed under subsection (3);

IV. Analysis: [ 6 ] The respondent [NAME] submits that the subject 2023 [NAME] loan remission amount of $5,423 was, per paragraph 65(1)(n), “an amount received by the [NAME] as or on account of a scholarship, fellowship or bursary” . [ 7 ] Paragraph 56(1)(n) provides that each of a scholarship, fellowship and bursary is taxable. Of these three items - scholarship, fellowship and bursary - the [NAME] says that in the case at bar the subject amount was remitted, “as or on account of a…bursary” . The Act does not define the word “bursary” . [ 8 ] However, jurisprudence has addressed the meaning of “bursary” for purposes of paragraph 56(1)(n). In [NAME] v. R. , 2004 FCA 41, the Federal Court of Appeal (FCA) at para. 32 approvingly reiterated from the below Tax Court decision (2003 TCC 36 at paras. 38 to 42) the following several definitions of “bursary” :

38. The [NAME], Revised, [COMPANY] - defines “bursary” as: 1. a grant, especially one awarded to a [NAME].

39. The [COMPANY], Toronto - defines “bursary” as: 2. a monetary grant to a needy [NAME]. 40. [NAME] - [COMPANY] - contains the following definition of “bursary”: 3. financial award to a [COMPANY] made primarily on the basis of financial need or some other criterion in addition to academic merit.

41. The same dictionary defines “grant” in this manner: a sum of money given by the state for any of various purposes, e.g. to finance education.

42. The French version of the provision in question uses the terms, “bourse d’études” and “bourse”, although having other definitions, is also defined by [NAME] - 1994 - as follows:

3. Pension accordée par l’[NAME] ou par une institution a un [NAME], a un [NAME] ou à un [NAME] pour l’aider a poursuivre ses études.

9. In paras. 33 and 34 of the Federal Court of Appeal decision itself, Nadon JA for the Court added further definitions of “bursary”, as follow:

33. To these definitions can be added the following: Le grand Robert - dictionnaire de la langue française, Dictionnaire le Robert - Paris, deuxième édition:

3. Bourse d’études et. absolt, bourse: pension accordée à un [NAME], un [NAME], pour subvenir à ses besoins pendant le temps de ses études. The New Oxford Dictionary of Engli sh, Clarendon Press - Oxford 1998 p. 246: Bursary 1. a grant, especially one awarded to someone to enable them to study at university or college. Canadian Dictionary of English Language , [NAME] 1997 p. 188: Bursary: 1. a university scholarship based primarily on need Shorter Oxford English Dictionary, [COMPANY] 5th edition, 2002, p. 311:

3. An endowment given to a [NAME].

34. These definitions of the word “bursary” highlight that bursaries are grants given to [NAME] in need of financial help so as to allow them to continue their studies. [ 9 ] I will proceed on the basis of the FCA conclusion (para. 34, immediately above), that “bursaries are grants given to [NAME] in need of financial help so as to allow them to continue their studies.” [ 10 ] The [NAME] asserts that the $5,423 amount of the 2023 remission to the appellant’s then balance of the appellant’s [NAME] loan account is taxable, asserting that the said amount remitted is a “bursary” , per paragraph 56(1)(n). [ 11 ] I do not accept this. First, the herein remittance is not a bursary, for the clear reason that in 2023 the appellant was not (since 2021), “a [NAME] in need of financial help so as to allow [her] to continue [her] studies.” Thus, the above-noted FCA definition of bursary was not met, thus rendering paragraph 56(1)(n) not applicable. [ 12 ] Second, paragraph 56(1)(n) would apply only if the said amount remitted in the year (of 2023), was “an amount received by the [NAME] as or on account of a …bursary.” [ 13 ] We have already identified that it was not a bursary. But was it received “on account of a bursary” ? [ 14 ] The answer to that is also in the negative. The remission was not “received on account of” a bursary. The subject remission was “received on account of” a [NAME] loan. And who would or could plausibly assert that a [NAME] loan is a bursary? [ 15 ] Thus, for these reasons, the definition of bursary does not at all accord with the clear, factual circumstances of this appeal, thereby refuting the Minister’s herein attempted application of paragraph 56(1)(n). The appealed reassessment is mistaken insofar as it purports to include the remitted $5,423 amount as taxable income.

V. Conclusion: [ 16 ] Accordingly, this informal procedure appeal will be allowed, without costs. Signed this 16th day of June 2026. “[NAME]. [NAME]” [NAME] J. CITATION: 2026 TCC 113 COURT FILE NO.: 2025-2047(IT)I STYLE OF CAUSE: [APPELLANT] AND HIS [NAME] THE [NAME] OF HEARING: Halifax, Nova Scotia DATE OF HEARING: January 20, 2026

REASONS FOR

JUDGMENT BY: The [NAME] [NAME] [NAME] OF

JUDGMENT: June 16, 2026 APPEARANCES: For the Appellant: [redacted] Counsel for the Respondent: [redacted] COUNSEL OF RECORD: For the Respondent: [redacted] Ottawa, Canada