Markou – Federal Court of Appeal finds that Quebec and ROC donations have similar requirements for a donative (impoverishing) intent

Ontario and Quebec taxpayers had engaged in the same leveraged donation program which Maréchaux had found did not give rise to any “gifts” for charitable credit purposes, even for the cash portions. In Markou, Paris J found thatdonative intent in civil law, as in common law, is always an essential element of a gift, even a partial gift,” whereas here “there was just one interconnected transaction and no part of it can be considered a gift that was given in expectation of no return.” In dismissing the appeal, Noël CJ stated that this finding:

...necessarily flows from … the loan agreements which made each of the appellants’ entire donation conditional on the loan being approved by the lender.

As “no part of [the interconnected transaction] can be considered a gift that the appellant[s] gave in the expectation of no return” … [i]t follows that there was no gift whether the matter is considered from a common law or a civil law perspective. …

He also stated:

[W]here 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… .

Neal Armstrong. Summaries of Markou v. Canada, 2019 FCA 299 under s. 118.1(1) – total charitable gift and General Concepts – Stare Decisis.