Section 3 – Education
Main sources of income for students include scholarships, research grants, training allowances, and RESP payments. It is also expected that the new Employment Insurance Training Support Benefit, which will provide workers with up to four weeks of income support through the Employment Insurance (EI) system, will be implemented by the end of 2020 (see Section XII).
A scholarship is an amount granted to a student to help him/her continue studying and includes any amount received as a bursary or fellowship. A scholarship also includes reimbursements or allowances to pay education-related costs, such as lodging, travel, supplies, textbooks or materials as well as benefits in kind, such as free housing or materials.
Generally, scholarships received by a primary or secondary school student as well as a student registered in a post-secondary program leading to a college or CEGEP diploma or a bachelor, master or PhD degree (or equivalent) are not taxable. There is a $500 exemption in other cases, including post-doctoral scholarships. Certain limits may apply if the student is registered part-time in a program.
Awards for achievements in the arts, sciences or public service (e.g. Governor General’s literary award or other public recognition awards) are completely tax-free.
In Quebec, scholarships and awards are not taxable and are not subject to the 1% contribution to the HSF.
Program Offered by an Employer
Expenses paid or reimbursed by an employer in connection with a program enabling an employee’s family members to undertake studies may, under certain conditions, be considered for a scholarship received by the student rather than a taxable benefit received by the employee. In Quebec, such treatment is only available as financial aid for post-secondary studies.
Research grants are taxable. However, taxpayers can deduct reasonable travelling expenses (meals, lodging, travelling) for working out of town, fees paid to assistants, the cost of equipment and laboratory fees up to the amount of the grant.
This document is up to date as of September 3, 2020 and reflects the status of legislation, including proposed amendments at this date.