Sennaike – Tax Court of Canada finds that personal business development was a personal element that weighed against an Amway distributorship being a business

The taxpayer devoted approximately 15 to 20 hours per week in 2019 and 2020 selling Amway products, generating a total of $8,706 in revenues from sales to 40 customers over the two years, while claiming expenses of over $32,000 for those years.

In finding that the taxpayer’s Amway activities did not constitute a source of income, so that his losses were not deductible, Cook J. first found that there was a significant, if not predominant, personal element in the taxpayer’s Amway activities. In particular, his level of activity (e.g., attending numerous workshops and other Amway functions) was disproportionate to his modest sales and likely reflected a strong interest in business networking, developing business partners, and participating in educational programs.

That was not the end of it, as Stewart had indicated that “where a taxpayer’s venture has elements that suggest it could be considered a hobby or other personal pursuit, it will be considered a source of income if it is undertaken in a sufficiently commercial manner”. However, Cook J found that the taxpayer’s activities were not undertaken in a sufficiently commercial manner to be considered a source of income.

Neal Armstrong. Summary of Sennaike v. The King, 2025 TCC 122 under s. 3(a) – business.