The Federal Court of Appeal on December 5, 2019 dismissed the appeal in Markou V. Canada relating to the ‘abusive charity gifting tax scheme’ “Donation Program for Medical Science and Technology”.   The Tax Court of Canada had followed the precedent in Marechaux, involving the same scheme.   The Tax Court had rejected that there was a gift either under common law or under the Quebec civil law.  The FCA has upheld that decision.

The Judge noted:

Because none of the appellants had the requisite donative intent in making their cash contribution, the Tax Court judge concluded that no gift could be recognized, whether the term “gift” in section 118.1 of the Act is given its common law or civil law meaning. As held in Maréchaux TCC and confirmed in Maréchaux FCA, each purported gift “was just one interconnected transaction and no part of it can be considered a gift that was given in expectation of no return” (Reasons, at para. 109).


As well there was a discussion of whether you can have a ‘profitable gift’ and the courts suggested otherwise:

… where a person anticipates receiving tax benefits that exceed the amount or value of an alleged gift, the donative intent is necessarily lacking. Impoverishment being an essential element of a gift under both the civil law and the common law, the purported gift constituted by the cash contribution would fail on this account as well


Apparently their lawyers will be trying to obtain leave to appeal from the Supreme Court of Canada.

These schemes have already been dragged out for over 20 years and hopefully, the Supreme Court of Canada will not waste its time dealing with this case.