OFF Training  Fast Track:
With the predicted growth of the Airline Industry flying
schools are busy. It is not always possible to receive training at the speed you desire.
This is especially true when it comes to an Instructor rating and the same can be said for
Multi and/or IFR training. We at OFF Training are in a position to start your training
today and are set up to have you train at as fast a pace as you can accommodate. We
recently trained a 45 hour private pilot (35 years old and dedicated full time) all the
way to a 'Commercial Multi-IFR' written exams and flight test in 2 months 8 days. This is just a reminder that we are situated at the best airport for training in Canada and we have instructors and examiners for every phase of training and testing. You require advance booking for the Instructor ride but all other testing can be set up on a moments notice 7 days a week. Barry. Mid-life Career Changers: How Practical Is a Dream? We must ask ourselves that question, whenever certain wide-eyed customers approach us for encouragement. We all know the pitfalls, yet here we are in that business and most of us love it. Many of these mid-life career changers are exactly the sorts of people we want working for us, having maturity, a boundless love for aviation, ties to our home community, and in many cases, limited ambition for those glittery airline positions. We need to be honest with career changers who walk in our doors seeking new lives. But that honesty must include addressing the bright futures they face in our current aviation economy. Flying opportunities for most of these folks are limited only by how much their ambition drives them. And who are we to counsel them against dreams we in fact pursue ourselves. To those career-changers who walk in our doors I say, "You may or may not make 777 captain at a major airline, but if you can accept that, there's a whole wide world of exciting flying careers waiting for you." And you know what? Almost none of them walk away disappointed. They haven't limited themselves to just one narrow vision of a dream, like kids do; they just want to be pilots. And that's one dream we can deliver. Don't be a Coal Mine Canary! By Greg Brown - (Courtesy of Be A Pilot News - Oct. 2000 issue) My good friend, "Donna", phoned the other day, with a big problem that I suspect afflicts many of us. A dedicated instructor, Donna owns a small flight school at a mid-sized city. She doesn't have the newest airplanes or the fanciest facility, but she's a talented and inspirational teacher, sharp at marketing, and fanatically well-liked and respected by her many customers. The problem? Donna has more business than she can handle, although working 60 or more hours a week can barely pay her bills. She has now retained a part-time instructor to help out, and is pondering whether hiring more will allow her to increase margins without working even more hours herself. But Donna's reputation is so good that every new customer wants only to fly with her, despite the presence of another well-qualified instructor. Most alarming is seeing formerly enthusiastic Donna become unrecoverably discouraged from working herself dry without adequate reward. If she were to quit, it would be tragic not only for her customers but for her community - Donna is one of those tireless aviation proponents who serves on the local airport board, offers young people's programs, and speaks and writes widely in her community about flying. "What am I going to do?" she pleaded, dejected, "I don't want to let my customers down, but I just cannot go on like this." Such complaints from experienced and respected CFI's bode ill. Any rational business type from outside of flight training would share the same simple suggestion with Donna - define reasonable annual earning given her experience and popularity, decide how many hours she actually wants to instruct per week, and dived to compute a new hourly rate for her services. "But that would make me very expensive, " she said, alarmed, "and many of my customers couldn't afford it!" So be it, but imagine the loss to her remaining customers, and to our aviation community in general, if too many fine instructors like Donna burn out and quit. "And what would my customers say," she asked, "if I nearly doubled my rates?" "They need you," I suggested. "Call a coffee-and-donuts meeting of your customers and lay your problem on the table; many will beg to pay more to keep you flying with them." I haven't mentioned that there's another flight school at Donna's airport. They charge half as much but despite much lower rates are only half as busy. "Students who can't afford your services can always go next door." I added, "Or you could chare a lower rate for your employed instructors...everyone knows you'd employ only the best instructors you could find." We've simply got to get over this egalitarian idea that all flight instructors should earn the same wage. There will always be novices and part-timers and experience-builders to ably serve the price-sensitive end of the market. But CFI's good enough to have customers beating down their doors must apply the ol' law of supply and demand and charge accordingly. Otherwise we'll lose too many irreplaceable pros like Donna. Learn from the Canary You know about coal mine canaries, right? In the old days birds were kept down in the mines to warn of toxic gases or oxygen depletion. Being more sensitive to respiratory distress, they'd collapse before the effects were felt by minors, hopefully allowing workers time to escape before it was too late. Well, too many fine instructors like Donna are suddenly starting to keel over in their cages, and if we don't respond promptly there's gonna be a mass exodus out the flight school door - this during the first time in history when customers are willing to pay a premium for quality flight instruction. Donna, please start charging what you're worth, and trim your hours before it's too late. We desperately need you...as do those lucky flight students who'll gladly invest in the special brand of learning they can get only from the best. |
GST/HST
Policy Statement Please note that the following Policy Statement, although correct at the time of issue, may not have been updated to reflect any subsequent legislative changes. P-034R Tax Status of Flying Time Pursuant to Section 8 of Part III of Schedule Vto the ETA. DATE OF ISSUE Revised: September 29, 1999 SUBJECT TAX STATUS OF FLYING TIME PURSUANT TO SECTION 8 OF PART III OF SCHEDULE V TO THE ETA. LEGISLATIVE REFERENCE(S) Section 8 of Part III of Schedule V to the ETA, as amended by 1997, c.10, s.99(1) NATIONAL CODING SYSTEM FILE NUMBER(s) 11915-7-2 EFFECTIVE DATE April 1, 1997 with respect
to HST The Department's general administrative position respecting the application of section 8 of Part III of Schedule V to the ETA is outlined in Policy Paper P-231 " Courses That Qualify for Exemption Pursuant to Section 8 of Part III of Schedule V to the Excise Tax Act". The Aeronautics Act, the Canadian Aviation Regulations (CARs) and the Canadian Aviation Regulations Standards (CARs Standards), which are collectively referred to herein as "federal legislation", set out the flight time requirements, and other requirements or qualifications, an individual must meet in order to obtain a Commercial Pilot Licence (Aeroplane) and the Airline Transport Pilot Licence. The federal legislation also sets out the flight time requirements, and other qualifications, an individual must meet in order to obtain classes or ratings in respect of these licences. A rating is an authorization associated with, and forming part of, a licence setting out special conditions, privileges or limitations attaching to the licence (e.g., night rating). This paper addresses the GST/HST status of these supplies of flight time by educational institutions, pursuant to section 8 of Part III of Schedule V to the ETA. Generally, the federal legislation outlines various amounts of flight time an individual must complete in order to obtain a pilot licence or a class or rating in respect of a pilot licence. The Department considers this federally required flight time to fall into 3 main classifications: (1) dual flight time, (2) solo flight time, and (3) build-up flight time. For the purposes of the dual
flight time and solo flight time, the student is considered by the Department to be under
instruction and direct supervision. Therefore, both dual flight time and solo flight time
are exempt supplies under section 8 of Part III of Schedule V to the ETA where all other
requirements of that section are met. Accordingly, the following tax treatment is afforded flight time required by the federal legislation: (1) Commercial Pilot Licence (Aeroplane) The following flight time
must be completed, pursuant to the federal legislation, in order for an individual to
obtain a Commercial Pilot Licence (Aeroplane): The 35 hours of dual flight time and the 30 hours of solo flight time are considered by the Department to be exempt supplies where all other requirements of section 8 of Part III of Schedule V to the ETA are met. The 45 hours flight time
from the private licence instruction is not exempt under section 8 of Part III of Schedule
V to the ETA, since it is does not otherwise meet the requirements of the section.
Specifically, the Department considers the Private Pilot's Licence (Aeroplane) to
be taken for personal interest, providing the individual with the right to fly a vehicle,
and therefore not related to a trade or vocation. The following flight time
must be completed, pursuant to the federal legislation, in order for an individual to
obtain an Airline Transport Pilot Licence: The 625 hours of solo flight
time is considered by the Department to be an exempt supply where all other requirements
of section 8 of Part III of Schedule V to the ETA are met. The flight time required by the federal legislation for the following ratings in respect of the Commercial Pilot Licence (Aeroplane) and the Airline Transport Pilot Licence, is exempt under section 8 of Part III of Schedule V to the ETA, provided that all other requirements of section 8 of Schedule V to the ETA are met:
The federal legislation sets out 4 different Classes of flight instructor rating. Pursuant to the federal legislation, an individual must complete a minimum amount of dual flight time and a minimum amount of solo flight time, in order to obtain each Class of flight instructor rating. This dual flight time and solo flight time is exempt pursuant to section 8 of Part III of Schedule V to the ETA. The federal legislation also mandates that a student complete an additional 100 hours of build-up flight time for the Class 1 flight instructor rating and 150 hours of build-up flight time for the Class 2 flight instructor rating. Neither of these blocks of build-up time are exempt under section 8 of Part III of Schedule V to the ETA. In order to obtain a Class 3 or Class 4 flight instructor rating a student must complete a certain amount of dual flight time and solo flight time. These blocks of time are exempt pursuant to section 8, since the Department considers a student to be under instruction and direct supervision for the purposes of dual flight time and solo flight time. The federal legislation does not require the completion of build-up time in order to obtain a Class 3 or Class 4 flight instructor rating. Sample Rulings: Facts 1. A school qualifies as a vocational school pursuant to section 1 of Part III of Schedule V to the ETA, and is registered under and governed by provincial legislation respecting vocational schools. 2. The Aeronautics Act, Canadian Aviation Regulations and Canadian Aviation Regulations Standards ("federal legislation") set out certain written examination and flight test requirements that must be met in order for individuals to obtain various aeroplane pilots' licences. The examinations are administered by Transport Canada. 3. A vocational school operates as a flight school and offers a full-time program designed to prepare students to write their examination and take their flight test for the Commercial Pilot Licence (Aeroplane). 4. There are several elements to the Commercial Pilot Licence (Aeroplane) program, including ground school preparatory courses and flight test preparatory courses. Pursuant to the federal legislation, the vocational school's flight test preparatory course consists of 35 hours of dual flight time, 30 hours of solo flight time and, in some instances, 90 hours of build-up time. 5. The curriculum and promotional materials of the vocational school indicate that the Commercial Pilot's Licence (Aeroplane) program provides skills related to the ability to gain or retain employment in the transportation industry. Therefore it relates to a trade or vocation. 6. The promotional materials of the vocational school indicate that students wishing to obtain their Commercial Pilot Licence (Aeroplane) may choose one of the following three study packages: Scenario No. 1: The vocational school provides each student with an aeroplane for the purpose of completing the dual and solo flight time. The aeroplane, 35 hours of dual flight time and 30 hours of solo flight time are provided by the vocational school for a single consideration. The vocational school does not provide the additional 90 hours of build-up time required by the federal legislation. Ruling Given The supply of a service of instructing in courses is made by a vocational school, and the documents and ratings to which the courses lead are prescribed by federal regulation. Therefore, based on the facts set out above, and as outlined in Policy P-*, Courses That Qualify for Exemption Pursuant to Section 8 of Part III of Schedule V to the Excise Tax Act, the supplies by the vocational school of an aeroplane, dual flight time and solo flight time, and ground school instruction constitute a single supply of instruction that is an exempt supply pursuant to section 8, assuming that section 18 of Part V of Schedule VI to the ETA does not apply. Scenario No.2: The vocational school provides the 35 hours of dual flight time, 30 hours of solo flight time, 90 hours of build-up time, ground school instruction and the use of an aeroplane for the purposes of completing the flight time, for a single consideration. Ruling Given The supply of a service of instructing in courses is made by a vocational school, and the documents and ratings to which the courses lead are prescribed by federal regulation. Therefore, based on the facts set out above, and as outlined in Policy P-231 "Courses That Qualify for Exemption Pursuant to Section 8 of Part III of Schedule V to the Excise Tax Act", we rule as follows: There are two separate supplies made by the vocational school. The first supply is a single exempt supply of instruction consisting of solo flight time, dual flight time, the aeroplane for the purposes of the instruction, and ground school instruction. The supply by the vocational school of build-up time constitutes a separate taxable supply of an aeroplane by way of lease, license or similar arrangement that is not incidental to the supply of instruction. Since there is no element of instruction involved in build-up time, the supply is not exempt under section 8. The value of this separate supply of build-up time must be determined on a reasonable basis. Scenario No. 3: The vocational school provides the solo flight time, dual flight time and ground school instruction for a single consideration. Students rent aeroplanes from a third party, since the vocational school requires that they provide their own aeroplane for the purposes of the solo flight time and dual flight time. The vocational school does not provide supplies of build-up time required by federal legislation. Ruling Given The supply of a service of instructing in courses is made by a vocational school, and the documents and ratings to which the courses lead are prescribed by federal regulation. Therefore, based on the facts set out above, and as outlined in Policy P-231 "Courses That Qualify for Exemption Pursuant to Section 8 of Part III of Schedule V to the Excise Tax Act", we rule as follows: The supplies by the vocational school of solo flight time, dual flight time, and ground school instruction constitute a single supply of instruction that is exempt pursuant to section 8, assuming that the supply is not a zero-rated supply pursuant to section 18 of Part V of Schedule VI to the ETA. The supply by a third party of the aeroplane is not exempt pursuant to section 8. |