Bonner,
TCJ:—The
appellant
appeals
from
assessments
of
income
tax
for
the
1979
and
1980
taxation
years.
In
his
returns
of
income
for
those
years
he
sought
to
deduct
from
income
from
other
sources
losses
resulting
from
his
activities
as
a
writer.
The
losses
were
$6,164
for
1979
and
$6,153
for
1980.
The
Minister
disallowed
the
deductions
and
in
his
reply
to
the
notice
of
appeal
he
pleaded
that
he
did
so
on
the
basis
of
an
assumption
that:
.
.
.
there
was
no
reasonable
expectation
of
profit
arising
out
of
the
Appellant’s
activities
as
a
freelance
writer
in
1979
and
1980.
In
other
words,
it
was
the
Minister’s
position
that
the
appellant
did
not
carry
on
the
business
of
a
writer
and
that
in
consequence
the
losses
were
not
losses
from
a
business
within
the
meaning
of
paragraph
3(d)
of
the
Income
Tax
Act.
There
was
no
dispute
as
to
quantum.
The
losses
resulted
primarily
from
work
on
two
books.
The
only
revenue
generated
by
the
appellant’s
writing
during
the
two
years
under
appeal
was
a
Canada
Council
grant
in
the
amount
of
$650.
The
appellant
is
now
and
has
since
1975
been
a
professor
in
the
Division
of
Humanities
at
York
University.
Prior
to
1975
the
appellant
taught
English
literature
at
universities
in
the
United
States.
During
the
pre-1975
period
the
appellant
earned
some
money
from
writing
short
stories
and
book
reviews,
but
it
was
not
suggested
that
he
earned
profits.
The
appellant
testified
that
since
1977
he
put
all
of
his
energies
into
two
books.
One
is
a
study
of
the
meaning
of
“failure”
in
the
modern
world.
It
has
not
been
completed.
The
second
book
is
an
historical
novel
set
in
Nazi
Germany.
It
was
sent
to
a
publisher
and
to
a
literary
agent
in
or
about
the
year
1981.
Subsequently,
the
appellant
revised
the
novel.
He
submitted
the
manuscript
for
reading
by
others
and
has
recently
made
further
changes.
No
publisher
has
yet
agreed
to
publish
either
work.
The
appellant’s
object
in
writing
was
neither
exclusively
or
even
primarily
financial
reward.
He
testified
that
if
he
had
wanted
to
make
money
he
could
have
done
so
by
now.
Rather,
he
said,
he
wanted
to
create
something
lasting.
Persons
who
carry
on
a
business
may,
by
virtue
of
section
3
of
the
Income
Tax
Act,
deduct
the
losses
of
that
business
from
income
from
other
sources.
The
problem
in
this
case,
as
in
many
similar
cases,
arises
because
many
activities
which
can
be
carried
on
as
a
business
can
also
be
carried
on
as
a
hobby.
The
distinction
between
the
two
classes
of
activity
turns
on
the
question
whether
the
activity
was
carried
on
with
a
reasonable
expectation
of
profit.*
It
does
not
turn
on
the
artistic
quality
of
the
end
product
of
the
activity,
save
to
the
extent
that
quality
makes
the
product
saleable
at
a
price
likely
to
generate
a
profit.
It
does
not
turn
on
the
question
whether
the
person
who
carried
on
the
activity
devoted
a
great
deal
of
time
and
effort
to
it,
save
again
to
the
extent
that
effort
is
likely
to
generate
a
profit.
The
time
and
effort
invested
by
the
appellant
and
his
educational
background
are
all
factors
which
tend
to
indicate
some
likelihood
of
producing
a
work
of
quality.
However,
the
evidence
left
unanswered
the
question
whether
and
to
what
extent
such
quality
was
likely
to
generate
profits,
that
is
to
say,
revenues
in
excess
of
costs.
In
an
income
tax
appeal
the
onus
is
on
the
appellant
to
establish
that
the
factual
premise
upon
which
the
assessment
rests
is
erroneous.
The
appellant
has
failed
to
discharge
that
onus.
For
the
foregoing
reasons
the
appeals
will
be
dismissed.
Appeals
dismissed.
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