Couture,
CJ.T.C.:—
These
appeals
deal
with
the
appellant's
1980
and
1981
taxation
years
and
more
specifically
with
the
deduction
of
losses
he
incurred
in
carrying
on
an
undertaking
that
the
respondent
alleges
did
not
have
a
reasonable
expectation
of
profit.
The
appellant
acted
on
his
own
behalf
and
the
substance
of
his
evidence
is
this.
He
is
of
Egyptian
descent,
a
member
of
a
prominent
family.
He
emigrated
to
Canada
some
15
years
ago.
He
was
educated
at
one
of
the
most
prestigious
schools
in
the
Middle
East,
Victoria
College,
Cairo.
He
is
married
and
the
father
of
three
children.
He
is
an
engineer
by
profession
and
during
the
relevant
taxation
years
was
employed
as
a
senior
engineer
with
DuPont
Canada
Inc.
The
1973
oil
crisis
in
the
Middle
East
triggered
a
tremendous
flow
of
money
into
the
Arab
world
and
this
provided
opportunities
and
opened
new
markets
to
the
Western
world.
The
people
of
the
Middle
East
were
somewhat
suspicious
of
and
reticent
to
deal
with
Europeans
and
Americans.
Because
of
his
ethnic
background
and
his
large
number
of
friends
and
acquaintances
in
the
area
the
appellant
saw
an
opportunity
to
capitalize
on
this.
He
was
also
influenced
by
a
Dr.
Sherif
who,
under
similar
circumstances,
had
created
a
prosperous
brokerage
business
that
supplied
his
Arab
clients
with
a
large
range
of
commodities.
On
a
trip
to
Egypt
in
1978,
the
appellant
established
business
contacts
with
the
expectation
that
this
would
lead
to
agreements
for
the
supply
of
goods
and
services
of
Canadian
or
American
origin.
He
explained
that
while
it
was
relatively
easy
to
contact
potential
clients,
it
was
another
thing
to
bind
them
to
firm
agreements
because
of
their
peculiar
methods
of
doing
business.
Further,
because
of
his
full-time
employment
with
DuPont
his
involvement
in
this
undertaking
was
restricted.
In
1978
he
was
unsuccessful
in
making
any
agreements
and
did
not
earn
income
from
this
source.
In
1979
his
work
at
DuPont
Canada
Inc.
prevented
him
from
pursuing
this
activity
for
most
of
the
year.
In
1980
he
returned
to
Egypt
for
a
period
of
three
weeks,
his
wife
accompanied
him
and
they
stayed
with
his
mother
in
Cairo
during
their
visit.
While
in
Cairo
the
appellant
spent
half
his
time
endeavouring
to
establish
business
contacts
and
managed
to
meet
with
five
or
six
potential
clients.
However,
nothing
tangible
resulted
from
these
meetings
or
from
the
whole
undertaking
and
no
income
was
earned
from
that
source
in
1980.
In
1981
he
and
his
wife
revisited
Egypt
for
two
and
a
half
weeks.
Again
they
lived
with
his
family
and
he
pursued
the
same
course
of
conduct
as
he
had
in
1980.
However,
this
time
he
carried
on
differently.
As
is
shown
in
his
income
tax
return,
he
was
then
associated
in
some
way
with
an
export/
import
firm
named
Intercan
Development
Corporation.
This
was
the
name
under
which
Dr.
Sherif
was
carrying
on
his
operations.
Whatever
was
the
true
nature
of
this
arrangement
it
is
immaterial
for
the
purpose
of
determining
whether
the
appellant
had
a
reasonable
expectation
of
profit
from
the
export/import
"business"
referred
to
in
his
income
tax
return.
Upon
his
return
from
Egypt
in
1981
his
employer
assigned
him
to
new
duties
that
required
extensive
travelling.
This
caused
him
to
suspend
all
business
relationships
with
people
in
the
Middle
East.
At
the
time
of
the
hearing
in
April
1986
these
had
not
been
reactivated.
Between
1978
and
1981
he
carried
on
his
sideline
business
from
his
home,
using
a
portion
of
the
kitchen
as
an
office.
His
wife
assisted
him
in
his
work.
The
contention
of
the
respondent
is
that
the
appellant
did
not
have
a
reasonable
expectation
of
profit
from
the
commercial
activities
that
have
been
described
and
consequently
they
did
not
constitute
a
"business"
under
the
meaning
of
the
Income
Tax
Act.
Rather,
says
the
respondent,
the
expenses
incurred
were
of
a
personal
nature
and
not
deductible
in
computing
income.
The
test
that
the
appellant
has
to
meet
to
prove
that
the
assessments
for
his
1980
and
1981
taxation
years
are
wrong
is
well-defined.
It
is
incumbent
on
him
to
show
that
when
regarded
objectively
his
operations
carried
with
them
a
reasonable
expectation
of
profit.
The
evidence
shows
that
between
1978
and
1981,
in
spite
of
all
his
alleged
efforts,
they
did
not
yield
one
dollar
of
income.
I
am
prepared
to
accept
that
the
appellant
exerted
energy,
sacrificed
money
and
time
in
pursuing
these
activities
but,
in
my
estimation,
this
is
insufficient
to
establish
the
foundations
of
a
business
structure.
He
was
hopeful
that
some
day
he
might
be
successful
in
negotiating
business
deals
with
clients,
but
this
possibility
is
too
remote
to
permit
the
conclusion
that
a
business
was
carried
on
in
the
process.
For
the
above
reasons,
the
appeals
are
dismissed.
Appeals
dismissed.
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