Executive Summary: Key Legal and Evidentiary Issues

• Determined whether professional poker play constituted a business under the Income Tax Act.

• Assessed the inapplicability of paragraph 40(2)(f) regarding gambling and lottery gains.

• Evaluated if appellants demonstrated an intention to earn profit through sustained poker activity.

• Analyzed use of software, strategy, and discipline as indicators of commercial conduct.

• Considered whether factual conclusions by the Tax Court judge involved palpable and overriding errors.

• Addressed admissibility concerns over the expert report submitted by the Minister of National Revenue.

Facts and outcome of the case

Background and the parties involved

This case involves three consolidated appeals heard together by the Federal Court of Appeal: Fournier-Giguère c. Canada, Bérubé c. Canada, and D’Auteuil c. Canada. The appellants, Martin Fournier-Giguère, Antoine Bérubé, and Philippe D’Auteuil, were all professional poker players whose earnings between 2008 and 2012 were reassessed by the Minister of National Revenue. The government treated their poker winnings as taxable business income under sections 3 and 9 of the Income Tax Act. The appellants contested these reassessments before the Tax Court of Canada, arguing that poker was a game of chance and their earnings should be exempt from taxation under paragraph 40(2)(f) of the Act, which excludes gains from lotteries and bets from capital gains calculations.

Procedural history and legal framework

The Tax Court judge rejected the appellants' arguments, finding that their poker activities were sufficiently commercial to be considered a source of business income. The appellants appealed, raising legal issues about the interpretation of the Income Tax Act, the application of paragraph 40(2)(f), and the proper assessment of the evidence, including expert reports. The Federal Court of Appeal, composed of Justices LeBlanc, Locke, and Pamel, rendered its judgment on June 10, 2025.

Key findings by the court

The court upheld the lower court’s decision, emphasizing that the appellants demonstrated consistent profit-making behavior, structured their lives around poker, and applied strategic planning and skill in their gameplay. The court noted that poker, though influenced by chance, involved a high degree of skill and thus could not be equated with lotteries or pure games of chance under paragraph 40(2)(f). The appeal judges found that the Tax Court judge had correctly applied the legal framework from cases like Stewart and Moldowan regarding profit intention and commerciality.

The appellants’ use of software tools, risk management techniques, and time investment in poker were cited as factors supporting the commercial nature of their activities. The court rejected claims that the Tax Court misapplied evidentiary standards, especially regarding the expert report submitted by the Minister, stating that even if inadmissible in part, it was not determinative of the outcome.

Rejection of comparators and precedents

The appellants attempted to compare their case to Duhamel, where poker earnings were not deemed business income. However, the court distinguished that decision on factual grounds, noting the differences in professional conduct, earnings trajectory, and additional revenue streams in Duhamel. The court emphasized that each tax case must be decided on its specific facts and evidence.

Conclusion and judgment

The Federal Court of Appeal dismissed all three appeals, concluding there was no error of law or palpable and overriding error in fact by the Tax Court judge. The court awarded costs to the Crown but did not specify a monetary figure, leaving it to be assessed under standard federal procedural rules.