A
J
Frost:—This
is
an
appeal
from
income
tax
assessments
with
respect
to
the
appellant’s
1967
and
1968
taxation
years.
Upon
notices
of
objection,
duly
signed
and
filed,
the
Minister
of
National
Revenue
reconsidered
the
assessments
and
confirmed
them
on
the
ground
that
the
deductions
from
income
claimed
by
the
appellant
in
respect
of
farm
losses
were
personal
or
living
expenses.
The
appeal
was
heard
at
Hamilton,
Ontario,
on
November
22,
1971
by
the
Tax
Appeal
Board
as
it
was
then
constituted.
The
appellant
is
employed
on
a
full-time
basis
with
Ford
Motor
Company
of
Canada.
In
1966
he
purchased
a
house
and
two
acres
of
land
and
decided
to
breed
and
grow
chinchillas,
housing
them
in
the
basement
of
his
home
where
pens
were
constructed
to
accommodate
the
animals.
He
initially
purchased
10
animals
at
a
cost
of
$1,048
as
breeder
stock.
At
the
end
of
1968
there
were
approximately
75
chinchillas
in
the
breeder
stock
but
no
sales
took
place
until
1969.
Counsel
for
the
respondent
contended
that
the
appellant
raised
chinchillas
in
his
spare
time
as
a
hobby,
and
that
the
raising
of
chinchillas
does
not
constitute
farming
within
the
meaning
of
paragraph
139(1
)(p)
of
the
Income
Tax
Act.
Chinchillas
are
bred
for
their
fur,
and
it
is
implicit
in
the
language
of
the
Act
that
breeding
animals
for
their
fur
is
“farming”.
The
sole
question
before
the
Board
is:
did
the
appellant
have
a
reasonable
expectation
of
profit
so
as
to
entitle
him
to
claim
the
deduction
of
his
farm
losses
in
1967
and
1968
from
other
income?
The
appellant
is
an
industrious
man
and
no
doubt
expected
to
make
a
reasonable
return
on
the
raising
of
chinchillas.
He
might
have
done
so
had
he
invested
more
capital
and
been
able
to
devote
his
full
time
to
the
task.
Unfortunately,
the
chinchilla
business
is
extremely
hazardous
and
the
appellant’s
operation
never
achieved
the
status
of
a
viable
business.
The
few
pelts
he
did
sell
in
1969
did
not
return
a
profit
and
the
entire
stock
was
barely
sufficient
to
produce
enough
pelts
to
make
a
single
fur
coat.
As
objective
criteria
only
can
be
used
to
determine
whether
the
appellant
had
a
reasonable
expectation
of
profit,
I
can
only
conclude
he
lacked
such
expectation
within
the
meaning
of
paragraph
139(1)(ae)
of
the
Income
Tax
Act.
Appeal
dismissed.
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