The Ontario Court of Appeal ruled that the trial judge who convicted him in 2011 made no errors in the case.
Lavigne was sentenced to six months in jail and six months of house arrest.
The one-time Liberal MP was convicted of fraud for claiming travel expenses for trips actually taken by his staffers.
He was convicted of breach of trust for having his staff work on his personal farm while on taxpayer time.
Lavigne resigned 10 days after being convicted, trading in his $132,000 annual salary for a parliamentary pension that could reach $79,000 a year.
He was appointed to the Senate in 2002 by then-prime minister Jean Chretien.