The Federal Court of Appeal has upheld the denial of charitable donation tax credits to two participants in the Global Learning and Gifting Initiative, rejecting challenges to the trial court’s findings and explanations.
In Malone v. Canada, 2026 FCA 166, decided October 2, 2026, the court dismissed Barry Malone’s and Brandon Malone’s appeals and ordered each to pay $500 in costs.
The underlying Tax Court reasons, 2025 TCC 43, explain the program: participants contributed cash, purportedly received educational software licences worth several times that amount, then donated the licences. Receipts covered both components.
The anticipated tax benefit exceeded the cash outlay. Eligibility depended on charitable intent, ownership and valuation. A gift requires a voluntary transfer of property owned by the donor. The court assessed intention objectively, considering the whole arrangement rather than accepting the participants’ description of their purpose.
Why the donation claims failed
At trial, the Malones said they could help disadvantaged Canadians while receiving refunds. They relied on internet access to establish software ownership and appraisals to support its value.
Justice Randall Bocock rejected those positions. Applying earlier GLGI cases, he found that expecting refunds exceeding cash contributions conflicted with an intention to become poorer through giving. Their stated charitable purpose was not decisive.
The appraisals did not match the program years; the software was worth a fraction of the claimed amounts. A vague description and limited online viewing did not establish possession or control.
CRA delay, earlier processing of returns, charity registration and a tax shelter number did not validate ineligible gifts. The issue was the correctness of the assessments.
Appeal court finds no basis to intervene
On appeal, the Malones argued that their evidence had been overlooked and the reasons lacked an adequate explanation. Justice Monica Biringer, writing for a unanimous panel, found the relevant evidence had been addressed. The court would not reweigh it.
The reasons also adequately connected the evidence to the outcome; judges need not discuss every argument. The ruling applies existing principles to these GLGI transactions rather than creating a new rule for ordinary charitable giving.
The distinction matters because donation tax credits remain available for qualifying gifts. The CRA’s gifts and income tax guide explains that an official receipt may support a claim, subject to eligibility rules. It separately warns prospective participants in tax-shelter gifting arrangements to obtain independent professional advice before signing documents.
