On January 22, 2015, an alumnus of the UBC law school, Peter A. Allard, Q.C., made a whopping $30-million donation to the faculty.

In a ceremony that day, the university announced that this school was being renamed as the Peter A. Allard School of Law.

"My gift supports pillars of excellence in human rights, and international integrity and ethics, and my hope is that the law school will become a beacon for justice, and the promotion of human rights and the rule of law around the world," said Allard.

With his gift, Allard, a nonpractising lawyer and son of Canadian broadcasting tycoon Charles Allard, became the largest donor to any law school in Canada.

Under the law, a person can only receive a charitable-donation receipt if they voluntarily transfer a "gift" for no consideration.

In 2016, the Income Tax Act offered a tax-credit rate of 33 percent to donations above the first $200 when a person's taxable income exceeded $200,000. 

"A gift must be given freely. If a gift is made as a result of a contractual or other obligation (for example, a court order) a receipt cannot be issued," the Canada Revenue Agency states on its website.

In recent years, these charitable tax receipts have been issued in connection with naming rights for buildings. There are several of them at UBC. 

But Allard wanted his gift to go further than just having his name on a building. He has maintained that his "gift agreement" with UBC also required campus officials to put his name on all degree certificates from the law school.

These included graduate degrees for students based on recommendations from the faculty of graduate and postdoctoral studies. UBC disagreed and it went to arbitration.

In 2019, the arbitrator ruled in UBC's favour. Allard's name would only appear on certificates that mentioned the "faculty of law" and would not appear on graduate degree certificates that don't include the words "faculty of law".

Allard and the Allard Prize Foundation then filed a petition seeking leave to appeal the arbitrator's ruling in B.C. Supreme Court.

In addition, the petitioners argued that the arbitrator should not have awarded legal costs to UBC or, conversely, was required to limit these costs to $30,000.

On January 14, Allard and the foundation were unsuccessful with this legal gambit when Justice Karen Douglas rejected their petition.

Douglas awarded costs to UBC, which means that Allard and/or his foundation will have to fork out more money to the university's lawyers if this isn't overturned on appeal.

Canada Revenue Agency rules

There's a question arising from the litigation with respect to Allard's $30-million donation to UBC.

Was this indeed a gift made for no consideration? Or was it part of a contractual obligation?

In other words, is the "gift agreement" a "contract"?

If the Canada Revenue Agency were to conclude that Allard viewed this as a binding contract, would that have any tax implications for him personally or for the foundation that bears his name?

Douglas's decision didn't address this question because it wasn't raised by either party in the litigation.

The Canada Revenue Agency website states that gifts provided in exchange for advertising or sponsorship generally do not qualify for charitable tax receipts.

If Allard wants his name on degrees, could that be construed as advertising his good name? Or is advertising only defined as something that could generate revenue for the advertiser?

Again, the recent court ruling was silent on this matter because it wasn't raised by the parties.

According to the Canada Revenue Agency, when a donor receives an "advantage" for a donation, some or all of the contribution may no longer qualify as a gift.

One thing is clear: Allard made a bargain with UBC.

One might argue that his gift agreement was intended to enhance his reputation for many years to come—and more so if his name were to appear on degrees recommended by the faculty of graduate and postdoctoral studies.

If UBC faculty, staff, or students—or any member of the public—are bothered by Allard's litigation, they have an option.

They could ask Canada Revenue Agency to issue a ruling on whether any money that flowed from this gift agreement met the legal test of being a "gift" under Canadian tax law.