Unanimous ruling in favour of former Blue Jays players draws a clear line on cross-border taxation
The Federal Court of Appeal has unanimously upheld the Tax Court of Canada’s 2024 decision in favour of former Toronto Blue Jays players Russell Martin and Joshua Donaldson in His Majesty the King v Martin and Donaldson, 2026 FCA 144 – a landmark ruling on how Canada taxes non-resident professional athletes.
What Was at Stake
At the heart of the dispute was whether the Canada Revenue Agency (CRA) could tax retirement compensation arrangement (RCA) contributions made by a Canadian employer on behalf of non-resident players beyond the portion attributable to services actually performed in Canada. RCAs, unregistered pension plans created under the Income Tax Act (Canada), are a key incentive used by professional Canadian sports teams to recruit international talent.