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ANALYSIS ENTITLEMENT [15]          In computing a taxpayer's income for a taxation year from an office or employment, there may be deducted sales expenses where the taxpayer was employed in the year in connection with the selling of property or negotiating of contracts, and, when under the contract of employment, the taxpayer was required to pay the taxpayer's own expenses and, inter alia, was remunerated in whole or in part by commissions or other similar amounts fixed by reference to the volume of the sales made on the contracts negotiated. [16]          This Appellant received a salary that was subject to an annual review adjustment based on performance, and she also received (in the next fiscal year) an incentive bonus based on a formula that included sales performance, control of direct expenses, control of inventory shrinkage and control of workrooms. [17]          The Appellant bases her claim on paragraphs 8(1)(f), (h), (h. 1) and (i) which permit the deduction of expenses incurred by employees in conjunction with their employment and for which they are not entitled to reimbursement from their employers. [18]          An employee seeking to claim a deduction under paragraph 8(1)(f) must meet each of the following tests: (1)            The taxpayer must be employed in the year in connection with the selling of property or negotiating of contracts for the taxpayer's employer. ... She was not a person, as such, employed in connection with the selling of property or the negotiating of contracts. (2)            The Expenses Must Be Borne by Employee (subparagraph (i)): If an employee is entitled to reimbursement from an employer, the employee clearly cannot expect to deduct the expenses for income tax purposes. ... There is an insufficient degree or nexus given her several work duties and responsibilities to conclude her remuneration was in whole or in part by commission or other similar amounts fixed by reference to sales volume in connection with selling of property or negotiating of contracts for her employer. (5)            No Tax-Free Allowance Received (subparagraph (iv)): The evidence provided in the two sets of forms is contradictory. ...

The Minister is disallowing the deduction of rental losses for those years in connection with properties in which Ms. ... Of the approximate $17,300 in repairs and maintenance expenditures claimed in 1997 on the Caledon property, approximately $9,900 was in connection with the roof and $7,400 was for the repairs of the water damage. ... In connection with the Caledon property, again her evidence was that it was a true sharing arrangement as far as the use of the property went. ...

A Settlement Agreement between the lender and Odessa was entered into on March 5, 1986, the relevant provisions of which were: (a)           Odessa would release the lender from any liability in connection with any matter arising out of the property or the legal action between the lender and Teacher's; (b)            The lenders would commence legal proceedings to effect a judicial sale of the property and arrange for the submission of a tender in the amount of $16,100,000. ... By this document, those parties:... release and forever discharge The Odessa Partnership and each of the partners, and Odessa-Durbin Developments Ltd. from any and all causes of action, liabilities, claims and demands whatsoever at law or in equity which the undersigned had, or hereafter can, shall or may have for any matter whatsoever arising out of or in connection with the Emerson Centre, the mortgage granted by Crown Trust Company to Odessa-Durbin Developments Ltd., the guarantees given by the partners in connection thereto and all matters in connection with the Emerson Centre and in connection with The Court of Queen's Bench Action No. 8301-09434. ...

Its principal provisions are as follows: 1.0 Client hereby engages Sempre to assist Client in its financing of the Project through a securities offering that will either be (i) registered for public sale or (ii) sold privately pursuant to an exemption from registration with the Securities and Exchange Commission and the applicable state securities administrators and/or other source(s) of financing if determined to be in the best interest of Client. 1.1 The purpose of this engagement contract (the “Agreement”) is to formalize the relationship between McCannel Properties and its affiliates (the “Client”) and Sempre Corporation (“Sempre”) regarding the collection and complication [sic] of certain information, data and documents in connection with the proposed private placement pursuant to an exemption from registration with the Securities and Exchange Commission and the applicable state securities administrators for the McCannel Properties Project (the “Project”). 2.0 SCOPE OF ENGAGEMENT 2.1 Sempre will assist the Client with the following: 2.1.1 Comprehensive review of the Project, including recommendations to the Client of alternative means for obtaining the Client’s desired objectives; 2.1.2 Collection and compilation of certain information, data and documents relating to the Project and the offering of the securities; 2.1.3 Preparation of a due diligence disclosure document with respect to the Project and the Issuer of the securities to be offered; 2.1.4 Assistance with the administrative and clerical tasks required for the preparation of a private placement memorandum, or similar disclosure documents required to comply with the applicable manner of offering and sale of the securities in connection with financing the Project; 2.1.5 Coordination with the professionals employed by Client in connection with Client’s Project, including, but not limited to, financial consultants, bankers, venture capitalists, qualified accredited institutions, accountants, and attorneys, and such third parties as may be involved in the securities aspect of the Project, including the National Association of Securities Dealers, Inc. ... In addition, certain other persons associated with the Offering may have conflicts of interest in connection with the Offering. ... In the preamble thereto, it is stated: “In addition, certain other persons associated with the Offering may have conflicts of interest in connection with the Offering. ...

In order to determine whether it is appropriate in a given case to invoke the remedy, the Supreme Court proposed a “causal connection” test. ... The question of a connection between the deprivation and the property is further explained as “an issue of fact”. ... In my view there is no reasonable connection between the contribution or alleged deprivation and the property. ...

“Qualified activities” as defined in section 5202 of the Regulations are activities that are performed in Canada directly in connection with manufacturing or processing but do not include “storing, shipping, selling and leasing of finished goods". Therefore, in order to determine whether the appellant is entitled to a manufacturing and processing profits tax credit under section 125.1 of the Act, it is necessary to ascertain whether the chip bin is used in Canada directly in connection with the manufacturing and processing of goods for sale or lease. The appellant submitted that the chip bin is used directly in connection with activities listed in subparagraphs (a)(iii)and (a)(vii) of the definition and that the capital cost of the bin was therefore properly included in the computation of its manufacturing and processing profits for the purposes of section 125.1 of the Act. ...

The Minister recognized the $4,000 as employment income but the Minister refused to recognize the claimed loss as being a loss or, if it was, that it was a loss in connection with a business. ... But the car was his and there was very limited evidence that she would need the car much in connection with her business. ... That is a significant amount of money for any person to pay out in connection with a business over an eight month period if that person does not have a bank account. ...

The Minister recognized the $4,000 as employment income but the Minister refused to recognize the claimed loss as being a loss or, if it was, that it was a loss in connection with a business. ... But the car was his and there was very limited evidence that she would need the car much in connection with her business. ... That is a significant amount of money for any person to pay out in connection with a business over an eight month period if that person does not have a bank account. ...

Such a computation is not made where, as here, the land in question was not used or held in connection with the generation of income, whether from business or from the property itself. ... There was nothing in the way of substantive evidence advanced which would clearly refute that perspective, and there was a high degree of uncertainty regarding not only the payment itself but the alleged adjustments in connection with permits, zoning, etc. ... Shtabsky, in his testimony, did not divorce himself from the actions taken by Vollan in connection with this project. ...

Subparagraphs 6(1)(b)(v), (vi) and (vii) provide: 6(1) There shall be included in computing the income of a taxpayer for a taxation year as income from an office or employment such of the following amounts as are applicable: (b) all amounts received by him in the year as an allowance for personal or living expenses or as an allowance for any other purpose, except (v) reasonable allowances for travelling expenses received by an employee from his employer in respect of a period when he was employed in connection with the selling of property or negotiating of contracts for his employer, (vi) reasonable allowances received by a minister or clergyman in charge of or ministering to a diocese, parish or congregation for expenses for transportation incident to the discharge of the duties of his office or employment, (vii) allowances (not in excess of reasonable amounts) for travelling expenses received by an employee (other than an employee employed in connection with the selling of property or negotiating of contracts for his employer) from his employer if they were computed by reference to time actually spent by the employee travelling away from (A) the municipality where the employer’s establishment at which the employee ordinarily worked or to which he ordinarilly made his reports was located, and (B) the metropolitan area, if there is one, where that establishment was located, in the performance of the duties of his office or employment. ... M.N.R., 3 Tax A.B.C. 141; 50 D.T.C. 479, the Income Tax Appeal Board gave consideration to the meaning of the word “allowances” in subsection 3(4) of the Income War Tax Act which provided that any payment made to any person in connection with any employment as allowances on a per diem or other periodic basis shall, subject to certain specified exemptions, be salary of such person and taxable as income. ... Bearing in mind the conjunctive nature of this subparagraph in relation to subparagraphs 8(1)(h)(i) and (ii), I regard that portion as meaning that if a taxpayer is in receipt of an allowance for travelling expenses which can be excluded in computing his income for a taxation year because: (a) it was reasonable and he was employed in connection with selling property or negotiating contracts for his employer (subparagraph 6(1)(b)(v)); (b) it was reasonable and he was a minister or clergyman incurring expenses for transportation incident to the discharge of the duties of his office or employment (subparagraph 6(1)(b)(vi)); or (c) it was not in excess of a reasonable amount, his employment is not of the kind described in subparagraph 6(1)(b)(v) and the allowance was computed by reference to time actually spent by him travelling away from the municipality where his employer's establishment at which he ordinarily worked or reported was located and the metropolitan area, if there is one, where that establishment was located, in the performance of the duties of his office or employment; the taxpayer is not qualified for a paragraph 8(1)(h) deduction. ...