Bonner,
TCJ:—The
appellant
appeals
from
assessments
of
income
tax
for
the
1977
and
1978
taxation
years.
During
those
years
the
appellant
carried
on
two
types
of
activity.
He
carried
on
the
profitable
business
of
a
self-employed
paper
hanger
and
he
preached
the
gospel
as
a
self-employed
minister.
His
activities
as
a
minister
resulted
in
financial
losses.
The
respondent,
when
determining
the
appellant’s
income
under
section
3
of
the
Income
Tax
Act
for
1977
and
1978,
disallowed
the
deduction
of
the
losses.
He
based
his
action
on
a
finding
or
assumption
that
“.
.
.
the
ministry
or
preaching
activities
of
the
appellant
were
not
carried
on
for
profit
for
the
said
taxation
years”.
Prior
to
1977
the
appellant
served
in
the
United
States
as
an
ordained
minister.
In
1977
he
moved
to
Canada
and
was
ordained
as
a
minister
by
the
Independent
Assemblies
of
God
of
Canada.
It
was,
the
appellant
testified,
his
intention
to
establish
a
congregation
using
as
a
nucleus
a
small
group
of
people
in
Calgary
to
whom
he
had
previously
ministered
on
a
visiting
basis.
The
attempt
was
unsuccessful.
The
appellant
said
that
he
could
not
get
“.
.
.
the
commitment
out
of
the
people
to
support
the
work,
both
financially
and
with
their
time
.
.
.”.
While
making
the
attempt
the
appellant
worked
to
support
himself
by
hanging
wallpaper.
After
1978
the
appellant
abandoned
the
attempt
in
Calgary.
He
tried
again
to
establish
a
congregation,
this
time
in
the
Edmonton
area.
By
1983
his
efforts
were
rewarded
by
a
modest
profit.
The
position
taken
by
the
agent
for
the
appellant
was
that
the
appellant’s
activity
as
a
preacher
was
the
exercise
of
a
profession;
that
the
definition
of
the
word
“business”
contained
in
subsection
248(1)
of
the
Income
Tax
Act
includes
a
“profession”;
and
that
the
losses
are
therefore
business
losses.
That
definition
is
as
follows:
248(1)
In
this
Act,
.
.
.
“business”
includes
a
profession,
calling,
trade,
manufacture
or
undertaking
of
any
kind
whatever
and,
except
for
the
purposes
of
paragraph
18(2)(c),
an
adventure
or
concern
in
the
nature
of
trade
but
does
not
include
an
office
or
employment;
Counsel
for
the
respondent
argued
that
the
losses
resulted
from
activities
carried
on
neither
with
a
view
to
profit
nor
with
a
reasonable
expectation
of
profit.
He
referred
to
the
oft-quoted
statement
of
Cotton,
LJ,
in
Erichsen
v
Last
(4
TC
422
at
427)
.
.
.
when
a
person
habitually
does
a
thing
which
is
capable
of
producing
a
profit
for
the
purpose
of
producing
a
profit
and
enters
into
a
contract
habitually,
he
is
carrying
on
a
trade
or
business,
The
question
whether
an
activity
is
or
is
not
a
business
is
not
answered
by
reference
to
any
single
test.
Thus,
the
presence
or
absence
of
an
intention
to
earn
a
profit
is
not
determinative.
In
I
R
v
Incorporated
Council
of
Law
Reporting
(3
TC
105,
113)
Lord
Coleridge
said:
It
is
not
essential
to
the
carrying
on
of
a
trade
that
the
people
carrying
it
on
should
make
a
profit
.
.
.
or
wish
to
make
a
profit.
Furthermore,
although
the
appellant
seems
to
have
been,
to
a
degree,
indifferent
to
wordly
matters
it
was
quite
obvious
that
any
increase
in
his
success
as
a
preacher
would
almost
inevitably
have
been
attended
by
an
increase
in
financial
returns.
The
activities
of
the
appellant
were
indistinguishable
from
those
of
any
other
self-employed
minister
who
carries
on
his
activities
as
a
means
of
earning
his
livelihood.
The
appellant’s
activities
were
quite
capable
of
generating
a
profit
and
ultimately,
by
1983,
they
did
so.
The
respondent’s
arguments
based
on
the
absence
of
a
reasonable
expectation
of
profit
also
fail.
They
do
so
for
want
of
proof.
There
was
simply
no
evidence
on
the
point.
The
respondent
did
not,
in
the
reply
to
notice
of
appeal,
plead
the
absence
of
such
expectation.
If
he
had
done
so
the
onus
would
have
been
upon
him
because
the
fact
was
not
found
or
assumed
on
assessment.
As
I
see
it,
this
is
simply
a
case
in
which
the
appellant
suffered
losses
during
a
period
while
he
was
attempting
to
establish
himself
in
his
chosen
profession.
The
activity
was
clearly
a
“business”
within
the
meaning
of
subsection
248(1)
of
the
Act.
The
losses
were
therefore
losses
from
business
within
the
meaning
of
section
3
of
the
Act.
The
appeals
will
therefore
be
allowed
and
the
assessments
referred
back
to
the
respondent
for
reconsideration
and
reassessment
on
the
basis
that
the
appellant’s
losses
from
preaching
are
deductible.
Appeals
allowed.
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