Background
Ordia Kelly participated in the Global Learning and Gifting Initiative (“GLGI”), a charitable donation program that the Tax Court of Canada has repeatedly found to be a tax avoidance scheme. The Canada Revenue Agency reassessed Kelly’s 2007, 2008, 2009, 2010, 2011, and 2013 taxation years, disallowing charitable donation credits claimed in connection with her participation in GLGI. Kelly, self-represented, appealed those reassessments to the Tax Court.
By order dated March 19, 2026, Justice Graham gave Kelly and ten other GLGI participants the opportunity to explain, by written submissions, why their appeals should not be struck without leave to amend on the basis that continuing them would constitute an abuse of the Court’s process. The Court identified the core obstacle as the “donative intent problem” — the settled judicial finding that GLGI participants lacked the genuine charitable intent required to support a valid donation claim.
Kelly filed written submissions asserting: that she believed GLGI was helping people in the developing world; that she could not afford to pay the reassessed amounts; that she exercised due diligence in relying on GLGI’s charitable registration; and that she was deceived by the scheme’s operators. She did not address a separate program, the Universal Donation Program, which appeared on the face of her appeal, and so the Court treated it as not in dispute.
The Court’s Holding
Justice Graham struck Kelly’s appeals without leave to amend and awarded costs to the Crown. The Court found that Kelly’s submissions raised no new facts or arguments capable of overcoming the donative intent problem. Her belief that GLGI was helping people abroad did not address whether she expected to profit from her purported donations — the operative legal question — and she offered no explanation on that point.
The Court rejected each of her ancillary arguments in turn. Her inability to pay the reassessed tax was found legally irrelevant: the Court has no jurisdiction to waive or reduce taxes on the basis of financial hardship, and financial circumstances do not bear on the question of donative intent. Her due diligence argument was inapplicable because she had not alleged that the reassessments were issued outside the normal reassessment period or that gross negligence penalties had been imposed — the two contexts in which due diligence is a legally material defence. Finally, while the Court accepted that Kelly was likely deceived by GLGI’s operators, it held that being a victim of fraud does not supply the donative intent that was absent at the time of the purported donations.
The Court concluded that allowing the appeals to proceed would be an abuse of process, as Kelly was advancing the same arguments that have failed before the Tax Court repeatedly in GLGI litigation. The appeals were accordingly struck on the motion, determined on written submissions, without a hearing on the merits.
Key Takeaways
- A taxpayer’s subjective belief that a donation scheme was legitimate or charitable does not satisfy the legal requirement of donative intent if the taxpayer stood to profit from the arrangement.
- Financial inability to pay reassessed taxes is not a defence in income tax appeals; the Tax Court has no equitable jurisdiction to reduce or forgive tax owing on hardship grounds.
- Due diligence is a legally relevant defence only where the taxpayer challenges the timeliness of a reassessment or contests gross negligence penalties — not in a straightforward assessment dispute.
- Being deceived or victimized by the operators of a donation scheme does not retroactively supply donative intent required for a valid charitable donation claim.
- Advancing arguments already conclusively rejected in prior GLGI litigation constitutes an abuse of the Court’s process and may result in an appeal being struck without leave to amend.
Why It Matters
This decision is one of several arising from Justice Graham’s March 2026 omnibus order targeting a cohort of GLGI appeals still working their way through the Tax Court. It reinforces that the GLGI donative intent issue is settled law in Canada and that individual appellants — even self-represented ones raising sympathetic circumstances such as financial hardship or fraud victimization — cannot reopen the question by repeating arguments the Court has consistently rejected. The striking of appeals without leave to amend is a significant procedural sanction, signalling the Court’s willingness to use its abuse-of-process jurisdiction to manage repetitive, meritless litigation efficiently.
For tax practitioners, the decision provides a clear map of which defences are and are not available in charitable donation scheme appeals: donative intent is the threshold issue, and arguments sounding in hardship, good faith reliance on CRA registration, or fraud victimization will not substitute for it. Practitioners advising clients who participated in GLGI or similar programs should carefully assess whether any genuinely novel facts exist before pursuing appeals that risk a costs award against an already financially stressed client.