Couture,
C.J.T.C.
[Translation]:—The
appellant
appealed
from
an
assessment
dated
May
28,
1985
concerning
the
1984
taxation
year.
Her
testimony
was
that
since
October
1983
she
has
operated
a
foster
home
in
the
municipality
of
Joly,
in
the
province
of
Quebec.
This
home
is
operated
in
premises
which
she
rents,
and
in
which
she
can
house
and
attend
to
the
needs
of
a
maximum
of
nine
people.
Each
resident
pays
$415
per
month
for
his
or
her
room,
board
and
miscellaneous
services
provided.
In
her
return
for
the
taxation
year
under
appeal,
the
appellant
did
not
include
the
benefits
that
she
received
from
operating
this
establishment,
on
the
ground
that
she
is
exempt
from
income
tax
by
reason
of
the
social
and
humanist
nature
of
her
operation.
The
respondent
submitted
that
she
was
operating
a
business
within
the
meaning
of
this
expression
as
set
out
in
subsection
248(1)
of
the
Income
Tax
Act
(the
Act),
and
that
there
was
no
provision
in
the
Act
which
would
exempt
the
income
in
question
from
income
tax.
In
support
of
her
argument,
the
appellant
entered
a
passage
from
the
information
provided
to
taxpayers
in
Quebec
with
their
income
tax
returns
by
the
provincial
Ministry
of
Revenue.
The
following
information
appears
in
this
document:
[Translation]
Benefits
received
by
a
foster
family
are
business
income
within
the
meaning
of
the
Taxation
Act
and
as
such
must
be
included
in
the
income
of
the
person
who
is
responsible
for
the
home.
The
amount
of
this
income
corresponds
with
the
gross
income
of
the
foster
family,
less
expenses
incurred
to
earn
the
income
(for
example,
expenses
for
the
residents'
room
and
board
and
for
supervising
them).
However,
if
a
foster
family
has
fewer
than
ten
residents,
Revenue
Quebec
considers
that
they
cannot
have
a
reasonable
expectation
of
profits.
Accordingly,
if
you
are
the
person
responsible
for
a
foster
family
with
fewer
than
ten
residents,
you
need
not
report
the
income
that
you
receive.
On
the
basis
that
she
had
only
nine
residents
during
the
1984
taxation
year,
the
appellant
argued
that
she
may
benefit
from
this
treatment
of
the
income
that
she
received.
The
information
contained
in
the
publication
issued
by
the
Quebec
Ministry
of
Revenue
to
which
reference
was
made
in
a
preceding
paragraph,
with
respect
to
exemption
from
income
tax
for
a
taxpayer
who
operates
a
foster
home
with
fewer
than
ten
residents,
is
only
an
administrative
practice
on
the
part
of
that
Ministry.
Furthermore,
this
practice
is
not
followed
or
accepted
by
Revenue
Canada,
which
relies
on
the
legislation
enacted
by
the
federal
Parliament,
and
argues
that
the
appellant
was
operating
a
business
within
the
meaning
of
the
Act
for
the
1984
taxation
year,
and
is
taxable
on
the
income
that
she
earned
from
the
business
in
that
year.
In
view
of
the
facts
in
the
case
at
bar,
the
Court
accepts
the
respondent's
argument
and
finds
that
the
appellant
was
operating
a
business
in
1984.
Furthermore,
the
financial
statement
of
the
business
which
was
attached
to
the
appellant’s
income
tax
return
for
the
taxation
year
under
appeal
relates
to
the
period
beginning
on
October
1,
1983
and
ending
on
December
31,
1984,
a
period
of
15
months.
The
financial
statement
shows
gross
income
on
the
order
of
$42,390,
on
the
basis
of
which
amount
the
respondent
established
the
appellant's
taxable
income
for
the
1984
year.
The
expression
“fiscal
period”
is
defined
in
subsection
248
of
the
Act
as
follows:
“Fiscal
period"
means
the
period
for
which
the
accounts
of
the
business
of
the
taxpayer
have
been
ordinarily
made
up
and
accepted
for
purposes
of
assessment
under
this
Act
and,
in
the
absence
of
an
established
practice,
the
fiscal
period
is
that
adopted
by
the
taxpayer
(but
no
fiscal
period
may
exceed
(a)
in
the
case
of
a
corporation,
53
weeks,
and
(b)
in
the
case
of
any
other
taxpayer,
12
months,
and
no
change
in
a
usual
and
accepted
fiscal
period
may
be
made
for
the
purposes
of
this
Act
without
the
concurrence
of
the
Minister).
[Emphasis
added.
I]
The
evidence
showed
that
the
appellant
housed
four
people
in
her
home
during
the
months
of
October,
November
and
December
1983,
and
that
she
was
paid
$415
per
month
for
each
person,
for
a
total
of
$4,980.
This
amount
must
therefore
be
deducted
from
the
appellant's
income
for
the
1984
taxation
year,
since
it
relates
to
another
fiscal
period.
The
expenses
claimed
by
the
appellant
and
allowed
under
the
assessment
relating
to
the
1983
taxation
year
must
therefore
be
disallowed
in
1984.
For
these
reasons
the
appeal
for
the
1984
taxation
year
is
allowed
and
the
assessment
is
referred
back
to
the
respondent
for
issuance
of
a
proper
assessment
which
reflects
the
corrections
set
out
above.
The
appellant
is
not
entitled
to
costs.
Appeal
allowed
in
part.
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