Brulé,
T.C.J.:—
These
are
appeals
from
reassessments
of
income
tax
for
the
years
1982,
1983
and
1984
in
which
the
appellant
claimed
business
losses
totalling
$4,215.17
in
1982,
$5,725.08
in
1983,
and
$4,924.48
in
1984.
Facts
In
the
years
in
question
the
appellant
carried
on
an
operation
under
the
name
of
J
&
G
(Kusick)
Services.
In
1982,
at
the
outset,
a
daycare
operation
was
entered
into
along
with
what
was
described
in
the
notice
of
appeal
as
a
"custom
clothing
manufacture”
service.
Both
of
these
were
conducted
in
the
appellant’s
home.
In
addition
to
claiming
expenses
for
the
residence
the
spouse
of
the
appellant
was
paid
for
her
services
as
a
part
of
the
operation
and
a
capital
cost
allowance
was
claimed
for
the
appellant's
automobile.
Advertisements
for
the
services
were
placed
in
local
area
shopping
centres
and
at
dry
cleaning
establishments.
No
market
surveys
were
carried
out.
By
1984
the
appellant
realized
that
the
undertaking
would
not
be
profitable
and
so
dropped
the
daycare
service
and
switched
to
vehicle
repairs
and
product
demonstrations.
By
the
end
of
1986
the
financial
picture
was
as
follows:
Summary
of
Revenue,
Expenses
and
Losses
|
1982
-
1986
|
|
|
Revenue
|
Expenses
|
Loss
|
Loss
|
|
1982
|
$
442.55
|
$
4,657.72
|
|
$(4,215.17)
|
|
1983
|
550.00
|
6,275.08
|
|
(5,725.08)
|
|
1984
|
958.13
|
5,882.61
|
|
(4,924.48)
|
|
1985
|
906.00
|
3,176.00
|
|
(2,270.00)
|
|
1986
|
3,451.00
|
5,238.00
|
|
(1,787.00)
|
|
TOTAL
|
$6,307.68
|
$25,229.41
|
$(18,921.73)
|
|
Analysis
|
|
The
appellant
maintained
that
the
expenses
were
necessary
start-up
costs
for
his
operation
and
should
be
allowed.
He
indicated
that
a
profit
was
likely
in
1987.
The
Minister’s
position
was
that
there
was
no
reasonable
expectation
of
profit
during
the
years
under
appeal
and
that
the
amounts
expended
were
not
for
the
purpose
of
gaining
or
producing
income
from
a
business.
It
is
obvious
that
there
was
no
reasonable
expectation
of
profit
from
the
first
endeavour
as
was
evidenced
by
the
appellant
changing
the
services
offered.
After
the
change
there
might
be
a
possibility
of
success
but
this
period
is
not
under
review.
This
is
similar
to
the
situation
found
in
the
unreported
case
in
1986
of
Harbans
Singh
Athwal
v.
M.N.R.,
wherein
the
appellant
changed
his
farming
activities
from
growing
in
one
year
potatoes,
then
garlic
and
then
corn,
and
finally
to
strawberries.
The
latter
change
seemed
to
provide
the
necessary
profit
area
but
the
Court
held
that
the
earlier
years
failed
to
show
any
expectation
of
profit
and
the
appeal
was
dismissed
for
those
years.
Here
the
situation
is
practically
identical.
In
the
early
years
Mr.
Kusick
had
no
chance
of
making
a
profit.
His
opinion
as
to
profitability
was
purely
subjective
and
not
objective.
The
end
result
then
is
that
these
appeals
are
dismissed.
Appeals
dismissed.
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