Roland
St-Onge
(orally:
December
8,
1977):—The
appeal
of
Mr
F
W
Beyer
came
before
me
on
December
8,
1977
at
the
City
of
Ottawa,
Ontario
and
the
issue
is
whether
the
appellant’s
racing
activities
in
1974
can
be
considered
as
the
carrying
out
of
a
business
with
a
reasonable
expectation
of
profit.
The
appellant
was
at
all
material
times
an
analyst
employed
in
Ottawa
by
the
Government
of
Canada
for
which
he
reported
net
employment
earnings
of
$19,461.06
in
1974.
He
reported
a
loss
of
$13,065.11
in
respect
of
his
car-racing
activities
in
the
4974
taxation
year,
determined
as
follows:
receipts,
$315;
total
expenses,
$13,380.11;
expenses
less
receipts,
$13,065.11
which
he
deducted
from
his
other
income.
The
respondent.
disallowed
the
deduction
of
the
alleged
loss
of
$13,065.11
on
the
assumption
that
the
loss
was
not
incurred
in
connection
with
a
business
carried
on
for
profit
or
with
a
reasonable
expectation
of
profit.
Heard
as
a
witness,
the
appellant
explained
that
he
has
a
degree
in
journalism,
that
he
has
been
interested
in
racing
activities
purely
as
a
hobby
since
the
age
of
11.
In
1972
he
wanted
to
be
in
the
business
of
car-racing.
He
went
to
Mont
Tremblant
and
followed
a
course
and
in
1973
he
received
a
national
driving
licence.
In
that
year
he
also
built
a
sports-car.
In
1974
he
purchased
a
racing-car
and
he
qualified
in
three
or
four
races.
He
finished
fourteenth
in
one
race
in
Newfoundland.
In
that
year
he
also
approached,
among
others,
two
companies,
MacMillan
Bloedel
and
the
Ford
Company.
The
former
told
him
that
they
were
interested—and
I
use
his
words,
“.
.
.
in
less
frivolous
activities”.
In
that
year
most
of
his
spare
time
was
spent
in
promotion
and
in
fixing
the
car.
In
1975
he
qualified
in
three
races,
but
did
not
obtain
any
sponsor.
Finally
he
quit
car
racing
because
he
was
told
by
the
Department
of
National
Revenue
that
such
activity
could
not
be
considered
as
a
business
activity
or
enterprise.
He
also
stated
that,
when
he
entered
into
this
activity,
his
intention
was
to
make
money
“in
something
he
enjoyed’’.
He
explained
that
there
was
a
possibility
of
getting
a
profit
by
saying
that
sometimes
One
client
is
enough
and,
in
terms
of
hope,
he
wished
to
be
able
to
get
more.
Counsel
for
the
appellant
referred
the
Board
to
many
cases,
most
of
which
were
farm
cases.
In
this
type
of
case,
the
Board
must
look
at
the
facts
and
what
struck
me
in
the
appellant’s
argument
is
that
he
contends
that
the
appellant
was
in
marketing
and
not
in
racing;
to
that
I
answer
that
companies
like
MacMillan
Bloedel
and
the
Ford
Company
prefer
to
advertise
on
winners
and
not
on
a
loser.
The
facts
before
me
are
sufficient
to
allow
me
to
decide
that
this
type
of
activity
can
in
no
way
whatsoever
be
considered
as
a
business.
The
appellant
was
very
honest
in
answering,
but
by
the
same
token
his
answers
show
that
there
was
no
hope
whatsoever
to
earn
income
with
the
activity
he
has
described
before
the
Board.
He
could
not
even
earn
enough
money
to
pay
the
expenses.
By
looking
at
the
nature
of
the
expenses,
and
I
would
like
to
mention
a
few
such
as
capital
cost
allowance
in
the
sum
of
$4,439.37;
truck
expenses,
$1,108.32;
travelling
expenses,
$492.80
and
automobile
expenses,
$2,489.71,
it
shows
that
it
was
absolutely
impossible
to
make
a
profit
with
the
type
of
activity
the
appellant
was
carrying
on.
So,
for
these
reasons,
I
have
to
dismiss
the
appeal.
Appeal
dismissed.
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