Samson et Fréres Ltée v. The Queen, 97 DTC 642 (TCC)

Dussault T.C.J. found that the taxpayer, which had carried on a meat processing business, had ceased to carry on that business by the second anniversary of the destruction of virtually all its equipment by fire because no decision had yet been made as to whether to acquire the assets and personnel necessary to start up again. Accordingly, various expenses were non-deductible. He stated (at p. 645):

"... For a business to exist and to have commenced, one must have gone beyond the stage of merely intending to commence it. ... The essential elements relating to the very structure of the business, that is the necessary financing, assets and labour, must have been sought out and brought together before it can be stated that the business exists and that it has commenced."

After finding that expenses incurred by the taxpayer were non-deductible because it had not yet commenced to carry on a business, Dussault TCJ. went on to reject a submission that the taxpayer's activities could constitute an adventure or concern in the nature of trade because "none of the activities relating to the efforts to set up the new business was in itself capable of generating income". (p. 647)