Arnold H. Bornstein

The appellant, a gay single man, claimed the medical expense tax credit (METC) for expenses incurred in 2015 for egg donation and gestational surrogacy services.

The Minister disallowed the claim.

The Tax Court of Canada held that the egg donor and surrogates did not meet the statutory definition of 'patient' under the Income Tax Act, as they were not the appellant's spouse, common-law partner, or dependant.

The Court also found that the denial of the METC did not infringe section 15 of the Charter, as the legislation did not treat the appellant differently from others in 2015.

The appeal was allowed only to the extent of a concession made by the Crown regarding DNA fragmentation expenses.

The appellants were employees who received distributions from a trust established by their employer following a corporate reorganization.

The Minister reassessed the distributions as employment benefits under paragraph 6(1)(g) of the Income Tax Act.

The appellants argued the trust was governed by subsection 7(2), allowing the distributions to be characterized as dividends and taxable capital gains.

The Tax Court of Canada dismissed the appeals, finding that no particular number of shares was allocated to any particular employee, meaning the requirements of subsections 7(1) and 7(2) were not met.

The distributions were properly taxed as employment benefits.

The appellant corporation was continued into the British Virgin Islands, thereby ceasing to be a Canadian-controlled private corporation (CCPC) but remaining a resident of Canada.

Shortly thereafter, it sold shares and realized a capital gain.

The Minister reassessed the appellant under the General Anti-Avoidance Rule (GAAR), arguing that the continuance was an abusive avoidance transaction designed to avoid the refundable tax on CCPC investment income under section 123.3 and to claim the general rate reduction under section 123.4.

The Tax Court of Canada allowed the appeal, finding that while the transactions were avoidance transactions that resulted in a tax benefit, they were not abusive.

The Court held that the Act contains distinct taxing regimes for CCPCs and non-CCPCs, and Parliament intended to allow corporations to move between these regimes.

The appellant's choice to be taxed as a non-CCPC, with its associated benefits and detriments, did not frustrate the object, spirit, and purpose of the relevant provisions.

The Appellant brought a motion to strike portions of the Respondent's Further Amended Reply in a GAAR appeal.

The Tax Court of Canada found the pleadings deficient for failing to clearly articulate the basis for the alleged abuse, but concluded the defect was curable.

The motion was allowed in part, striking the impugned paragraphs with leave to amend.