Yves Des Groseillers, et al. v. Agence du revenu du Québec

(Quebec) (Civil) (By Leave)


Taxation — Income tax — Assessment — Stock options — Charitable donation — Whether donation of stock options by individual to registered charity gives rise to taxable employment benefit where donor receives no actual consideration — Taxation Act, CQLR, c. I-3, ss. 48, 50, 54, 422.


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The appellants, Yves Des Groseillers and BMTC Group Inc., appealed assessments made by the respondent, the Agence du revenu du Québec (“ARQ”). In the course of tax audits, the ARQ added amounts to Mr. Des Groseillers’s taxable income as additional employment income. Those amounts represented the total value of the stock options donated by Mr. Des Groseillers to registered charities, for which he had claimed tax credits. The ARQ therefore added the amounts to BMTC’s payroll as well.

The Court of Québec allowed Mr. Des Groseillers’s application and vacated the notices of assessment. It allowed BMTC’s application in part and referred the notices of assessment to the Minister for reconsideration and reassessment. In the court’s view, although the transactions were subject to the special rules on the issuance of securities to employees, it would find that Mr. Des Groseillers had not received any benefit, because the evidence showed that he had not received any consideration for the donation and that he had not paid anything to acquire the options. The ARQ could not rely on the presumption set out in another division of the statute to the effect that the disposition of property is deemed to be made at its fair market value, because the special rules form a complete code. The Court of Appeal allowed the ARQ’s appeal, set aside the Court of Québec’s judgment and rendered the decision that ought to have been rendered, that is, it dismissed the appeals brought by Mr. Des Groseillers and BMTC from the notices of assessment. It held that the special rules do not exclude the application of the presumption.

Lower Court Rulings

March 11, 2019
Court of Quebec

2019 QCCQ 1430, 500-80-034362-161, 500-80-034363-169
Notices of assessment against Yves Des Groseillers vacated and notices of assessment against BMTC referred to Minister for reconsideration
June 1, 2021
Court of Appeal of Quebec (Montréal)

2021 QCCA 906, 500-09-028245-199
Appeal allowed and appeals from notices of assessment dismissed