A
W
Prociuk:—The
appellant
was
disallowed
farming
losses
incurred
in
the
years
1967
and
1968
to
be
deducted
from
his
other
income
and
this
is
the
subject
matter
of
this
appeal.
The
case
was
heard
on
March
25,
1971
at
a
hearing
held
at
the
City
of
Kitchener,
in
the
Province
of
Ontario,
at
which
the
presiding
member
was
J
O
Weldon,
Esq,
QC,
then
a
member
of
the
Tax
Appeal
Board
which,
on
December
15,
1971,
became
the
Tax
Review
Board.
However,
judgment
was
reserved
and
no
decision
was
rendered
by
him
prior
to
his
retirement
from
the
Board
in
March
of
1972.
Accordingly,
by
consent
of
both
parties,
this
Board
has
now
been
given
jurisdiction
to
issue
its
decision
and
judgment
on
the
basis
of
the
transcript
of
the
evidence
and
the
argument
taken
before
Mr
Weldon,
without
further
representation
by
counsel.
The
appellant,
age
34,
is
a
farmer
and
construction
worker
and
resides
in
the
district
of
Guelph,
Ontario.
In
1965
he
acquired
the
family
farm
consisting
of
100
acres,
the
principal
operation
of
which
was
livestock
raising.
In
1966
he
operated
the
farm
and
also
worked
at
other
employments.
Farm
gross
receipts
for
that
year
totalled
$5,514.10
and
after
deducting
all
expenses
relative
thereto,
the
net
income
was
$463.54.
His
other
income
was
$3,333.81.
In
1967
and
1968
the
appellant
was
not
as
successful
with
the
farm.
He
claims
that
market
conditions
were
the
main
factor
responsible
for
the
losses
he
sustained.
By
the
end
of
1968
he
concluded
that
he
could
not
operate
his
farm
profitably
and
in
the
ensuing
year
leased
same
to
another
party.
The
question
to
determine
here
is
whether
or
not
the
appellant
in
the
years
1967
and
1968
engaged
in
farming
with
a
reasonable
expectation
of
profit.
In
1967
the
appellant
sold
his
livestock
with
the
expectation
of
purchasing
feeders
and
to
this
end
concentrated
in
acquiring
feed
for
them.
In
1968
the
appellant
states
that
he
continued
to
raise
grain
and
hay
for
feed
but,
because
of
market
conditions,
he
decided
not
to
buy
any
cattle
and
thereafter
sold
the
feed
he
had
raised.
The
evidence
of
the
appellant
satisfies
me
that
in
both
years
he
expected
to
make
a
profit
and
he
expected
to
carry
on
in
subsequent
years
on
a
profitable
base.
In
1969
he
changed
his
mind
and
ceased
farming
entirely.
The
fact
that
a
loss
is
incurred
in
any
given
year
is
not
the
criterion
of
determining
whether
or
not
there
was
a
reasonable
expectation
of
profit.
The
appeal,
accordingly,
is
allowed.
Appeal
allowed.
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