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In the first alternative, counsel is asking that subclause (C) be declared inoperative as it applies to his client so that there would be no requirement of connection in paragraph 109(1)(b) by blood, relationship, marriage or adoption with the taxpayer and the dependant. ... In enacting subparagraph 109(1)(b) Parliament required that there be a degree of connection between the dependant and a taxpayer for the taxpayer to be permitted the deduction. To sever the connection is a function of the legislature, not the Court. ...

At the trial, counsel for the appellant indicated that the issue relating to the treatment of a capital loss raised in the notice of appeal for the 1978 taxation year had been disposed of and nothing was required from the Court in this connection. ... In this connection, the assumptions made by the Minister in the reply to notice of appeal for each of the years in issue regarding the number of shares bought and sold by the appellant as well as the total proceeds and net gains from the sale of these shares, were not disputed. ... Appellant's employment connections with BX and Brent and the nature of his duties with these companies had a bearing on his activities relative to the purchase and sale of BX and Brent shares. ...

His income tax return for the 1984 year (Exhibit 1-1, line 108) indicates that the appellant took the $500 deduction provided by the Act in connection with his employment. ... The explanations about the appellant's work and his professional or administrative responsibilities, as well as the expenses that he alleged that he had incurred in connection with his own businesses, were very vague, to the point of substantially diminishing his credibility (A-1). ... As well, the $705.51 for stationery and office expenses includes $500 for depreciation of the typewriter and the balance, $205.51, is composed of a series of small expenses such as postage for which no connection was established with the operating expenses of the appellant's businesses. ...

There has been difference of opinion on whether the word “combination” in subsection 13(1) requires some “connection” by way of physical relationship or integration or inter-connection between farming and the subordinate activity which provides another source of income. Paragraph 3(f) of the Income War Tax Act of 1917, as amended, made reference to “connection” in defining the permissible deductions from income derived from the chief business, trade, profession or occupation of the taxpayer in determining his taxable income. ...

In so assessing and in conceding that the appellant is entitled to a business investment tax credit of $1,310.33 to be applied in the 1982 taxation year the respondent relied upon the following assumptions in paragraph 11 of his reply to notice of appeal: (a) during the 1977 to 1981 taxation years, inclusive, the Appellant was engaged in scientific research, within the meaning of Regulation 2900 of the Income Tax Regulations, in connection with inventing activities he was carrying on in his spare time at his personal residence; (b) during the 1982 and 1983 taxation years the Appellant was engaged in a sideline business in connection with his inventing activities but he was not engaged in scientific research within the meaning of Regulation 2900 of the Regulations; (c) in his returns of income for the 1977 to 1983 taxation years the Appellant reported business expenses in connection with his inventing activities in the following amounts: 1977 $ 1,704.02 1978 4,496.64 1979 7,056.23 1980 11,029.96 1981 10,332.97 1982 17,777.42 1983 15,892.59 particulars of which amounts are set out in Schedule 1 to this Reply; (d) in his return of income for the 1977 taxation year the Appellant applied for and was allowed a business investment tax credit in the amount of $85.20 to be applied in the 1977 year, based upon scientific research expenditures made by him in that year of $1,704.02, and his subsequent claim for a business investment tax credit in respect of expenditures made in that year must be reduced accordingly by that amount; (e) in the 1983 calendar year the Appellant applied for business investment tax credits to be applied in the amount of $3,211.87 in the 1982 taxation year and $4,557.00 in the 1983 taxation year and indicated his intention that the amounts of such credit to be carried forward from the 1977 to 1981 years, inclusive, should first be applied in the 1982 year and the balance carried forward to 1983, and he claimed the following amounts of business investment tax credit for the 1977 to 1983 taxation years inclusive, based upon the following amounts of scientific research expenditures made by him in those years: S.R.E. ...

(k) As a consequence of this sale by the partnership, Mr C Pelletier brought an action against it in connection with certain rights relating to the “claims” sold In 1965. ... Facts 1.1 Messrs James G Russell, Louis Landry, Jean-Yves Bérubé and Yvon Pelletier on May 23, 1963 formed a partnership known as the “Société d’Exploitation and d'Exploration Minière Boisbuisson Enr" (hereinafter referred to as (’’Boisbuisson’’); as can be seen from a document filed as No A-1. 1.2 The appellant became a partner in Boisbuisson in June or July 1963, by a verbal agreement. 1.3 As a consequence of certain exploration and development activity and certain legal steps (the formation of companies, the purchase or sale of mining rights and company shares and various transactions), Boisbuisson and/or one or more of the partners individually, including the appellant, acquired certain rights to income, as can be seen from documents filed jointly as No A-2. 1.4 On September 17, 1966 Messrs Charles-Eugène Pelletier and Paul E Dumont filed an action in the Superior Court to dissolve the partnership and obtain an accounting, and in addition to the principal action, a claim in the amount of $1,500,000 for unjust enrichment against Messrs James G Russell, Louis Landry, Jean-Yves Bérubé, Yvon Pelletier and Leopold Langlois, the partners in Boisbuisson, as can be seen from documents filed as No A-3. 1.5 On February 8, 1974 Georges Pelletier J of the Quebec Superior Court dismissed the action by Messrs Charles-Eugène Pelletier and Dumont, as can be seen from a document filed as No A-4. 1.6 Mr Charles-Eugène Pelletier, one of the plaintiffs, appealed the decision of Georges Pelletier J of the Superior Court, and on December 27, 1978 Owen, Crête and Dubé JJA of the Court of Appeal dismissed Mr Charles-Eugène Pelletier’s appeal, as can be seen from a document filed as No A-5. 3.02 The respondent admitted that there was a direct connection between all the expenses mentioned in subparagraph (c) of paragraph 13 of the reply to the notice of appeal, cited above, and the action successfully defended by the appellant and his partners. ... (c) an outlay or expense to the extent that it may reasonably be regarded as having been made or incurred for the purpose of gaining or producing exempt income or in connection with property the income from which would be exempt. ...

He raced his horses under the name of “Ace Stables”, and felt that his clients, even the general public made a direct connection between “Ace Stables” and “Ace Salvage Alberta Ltd”. ... According to counsel nothing had been brought out in evidence which would support any direct beneficial connection whatsoever. ... As opposed to these, there was no hard empirical evidence whatever that a connection existed between the horse-racing expenses and the salvage income; again, a situation which might not be completely fatal under certain circumstances, but is of serious proportions in this situation, because of the unusual nature of the proposition put forward by the appellant. ...

The Appellant respectfully submits that, inasmuch as its chief source of income for the 1977 taxation year was a combination of thoroughbred horse breeding and racing and the provision of building supplies, section 31 of the Income Tax Act did not operate to constrain the taxpayer from deducting the loss that it sustained in connection with thoroughbred horse breeding and racing in the said year. ... There is a connection and the connection that does exist on the evidence has relevance as I mentioned earlier, that the expenses incurred in the horse-racing activity can properly be viewed as an expense incurred in the course and for the purpose of earning income from the business, however that business may be characterized. ...

Clause 122.3(1)(b)(i)(B) of the Act reads as follows: (1) Where an individual is resident in Canada in a taxation year and, throughout any period of more than 6 consecutive months that commenced before the end of the year and included any part of the year (in this subsection referred to as the “qualifying period”) (a) was employed by a person who was a specified employer, other than for the performance of services under a prescribed international development assistance program of the Government of Canada, and (b) performed all or substantially all the duties of the individual’s employment outside Canada (i) in connection with a contract under which the specified employer carried on business outside Canada with respect to (A) the exploration for or exploitation of petroleum, natural gas, minerals or other similar resources, (B) any construction, installation, agricultural or engineering activity, or there may be deducted, from the amount that would, but for this section, be the individual’s tax payable under this Part for the year, an amount equal to that proportion of the tax otherwise payable under this Part for the year by him that the lesser of.... ... As to the services to be rendered by Canadian Helicopters Limited, counsel for the Respondent referred the Court to clauses 4.1 and 4.2 of the latter agreement which read as follows: 4.1 The Carrier recognizes that the UN requires air transportation services to be performed in connection with the United Nations peacekeeping activities mandated by the Security Council. ... The first, based on the interpretation of subparagraph 110(l)(f) of the Act, was that the use of the expression “employment with” did not mean “employment by” and could encompass employment activities performed at the request of the United Nations and that a person did not need to be an employee of the United Nations as long as that person carried on his or her employment activities in connection with the United Nations. ...

For purposes of this set of reasons, I would break it down into four basic areas: (1) The rentals were on a “commercial basis”. (2) It provided the taxpayer with rental income in excess of rental operating expenses. (3) (It) includes an add back of the taxpayers personal expenses (in) connection with the property. (4) A distinction for purposes of deduction should be made between “operating expenses” and “interest charges”. ... Counsel for the Respondent pointed out the “personal element” connection with the property- the use of portions of it as a “principal residence” over several years. ... The “interest charges” on these capital costs, are deductible only under circumstances which would equate them with current operating expenses but only after it is established that the current expenses themselves qualify for deduction, for purposes of this appeal. (3) (It) includes an add back of the taxpayers personal expense (in) connection with the priority. ...