French – Federal Court of Appeal finds that it is arguable that Parliament would have intended what constitutes a gift outside Quebec to be informed by the Civil Code

The position that a Canadian individual residing outside Quebec could generate a credit for at least the cash portion of his “donations” made as part of a leveraged donation tax shelter was buttressed in his pleadings by advancing the proposition that Parliament did not intend for split gifts to receive significantly different treatment in the rest of Canada as contrasted to Quebec (where split gifts were accepted in the Civil Code) even before the introduction of the split gift rules in the Act effective after 2002.

In accepting a submission that these pleadings should not be struck, Noël JA stated that “it cannot be said with certainty that the meaning of ‘gift’ prior to the [December 31] 2002 amendments excluded the notion of split gift in the common law provinces,” and that “it would have been open to Parliament to attribute to the word gift a meaning which coincides with the civil law and...it is arguable that this is what Parliament intended.” In other instances where there are apparent differences in the common law and civil law concepts, it may also be appropriate to consider that Parliament would likely not have intended differing tax results based on which provincial law applies.

Neal Armstrong. Summary of French v. The Queen, 2016 FCA 64 under s. 118.1(1) - Total Charitable Gifts and Interpretation Act, s. 8.1.