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Furthermore, the Appellant’s testimony as well as his representations to Revenue Canada at various times, demonstrates that he considered the entire business as a single entity and a single source of income for the purposes of sections 3 and 9 of the Income Tax Act. ... As counsel for the Minister observed, in order to properly make such a claim, it would be necessary for the Appellant to seek to amend the Company’s T2 return for the year in which the loss was crystallized before adjustments of any kind might be considered to his personal returns with respect to any ABIL which might have been sustained by the Appellant. ...

There is nothing on the Court file to show that the question whether “it would be impracticable in the circumstances” or whether “exceptional circumstances” existed was considered. ... The following criteria should be considered: the profit and loss experience in past years, the taxpayer’s training, the taxpayer’s intended course of action, the capability of the venture as capitalized to show a profit after charging capital cost allowance. ...

In the original Mo/dowan decision, these factors were enumerated as follows: The following criteria should be considered: the profit and loss experience in past years, the taxpayer’s training, the taxpayer’s intended course of action, the capability of the venture as capitalized to show a profit after capital cost allowance. ... However, these amounts must be considered in the light that the Appellant did not establish at the outset of the operation of his business that there was a reasonable expectation of profit. ...

In making the reassessments dated October 30, 1995, for the 1992 and 1994 taxation years, the Minister considered the following facts, inter alia, to be true: (a) during the taxation years at issue, the appellant and Solange Crevier (hereinafter “the spouse”) were equal co-owners of a property located at 1554 Des Chenaies in the municipality of Boisbriand in the province of Quebec (hereinafter “the property”); (b) the property was acquired in 1988; (c) the property is a single-family home with an apartment in the basement; (d) the property has just one street address, namely the appellant’s address, 1554 Des Chenaies; (e) the following income and expenses were reported in respect of the property for the 1992, 1993 and 1994 taxation years (a detailed account is appended hereto): 1992 1993 1994 Gross rental income $ 4,275 $ 4,800 $ 4,920 Rental expenses $19,805 $16,113 $14,578 Net rental loss ($15,530) ($11,313) ($ 9,658) (f) the appellant estimated that the basement took up one third of the total area of the property and said that the rental expenses he submitted represented one third of all the expenses for the property; (g) the appellant claimed the following proportions of the total net rental losses for the property as his net rental losses: 100 per- cent for the 1992 taxation year, O percent for the 1993 taxation year and 50 percent for the 1994 taxation year; (h) the following net losses have been reported in respect of the property since it was purchased: Year Loss reported 1988 ($7,788) 1989 ($8,480) 1990 ($8,634) 1991 ($24,914) 1992 ($15,530) 1993 ($11,232) 1994 ($9,658) (i) since the mortgage interest, property tax and insurance carrying charges alone totalled $7,536 for the 1992 taxation year, $7,622 for the 1993 taxation year and $7,409 for the 1994 taxation year, they exceeded the gross income by $3,261 in 1992, $2,822 in 1993 and $2,489 in 1994; (j) during our audit, the appellant said that he knew he would not make a profit on this investment and that the only reason he rented his basement was to help pay the mortgage; (k) the appellant filed no vouchers in support of his expense claims for the 1992 taxation year and filed only $3,000 worth of receipts for repairs for the 1994 taxation year, of each amount 50 percent was attributable to him; (l) for the taxation years at issue, the appellant created an increase in his net rental loss by claiming capital cost allowance; (m) the appellant has not shown that the sums of $13,913 for the 1992 taxation year and $4,829 for the 1994 taxation year were spent for the purpose of earning income from a business or property; (n) during the taxation years at issue, the appellant had no reasonable expectation of profit in respect of his property. 9. ... In making the reassessments dated October 30, 1995, for the 1993 and 1994 taxation years, the Minister considered the following facts, inter alia, to be true: (g) the appellant claimed the following proportions of the total net rental losses for the property as her net rental losses: 0 percent for the 1992 taxation year, 100 percent for the 1993 taxation year and 50 percent for the 1994 taxation year; (k) the appellant never filed any vouchers in support of her expense claims for the 1993 taxation year and filed only $3,000 worth of receipts for repairs for the 1994 taxation year, of which amount 50 percent was attributable to her; (m) the appellant has not shown that the sums of $11,232 for the 1993 taxation year and $4,829 for the 1994 taxation year were spent for the purpose of earning income from a business or property. ...

The amounts of income not reported were from an objective viewpoint substantial, especially if considered in terms of the income reported by the appellant for the three taxation years in question. ... There is no need to refer to a list of precedents on the concept of gross negligence and extenuating circumstances that should be considered for the purposes of s. 163(2) of the Act when the evidence shows that a taxpayer deliberately failed to report money received that he or she knew to be taxable. ...

[13] Paragraph 6(1)(f) of the Act requires that all amounts received by a taxpayer in a year that were payable to the taxpayer on a periodic basis in respect of the loss of all or any part of the taxpayer’s income from an office or employment pursuant to a disability insurance plan to or under which the taxpayer’s employer has made a contribution be included in the taxpayer’s income employment insurance benefits. [14] The WLRP benefit payments paid to an employee are considered to be employment income because they are paid in respect of an employment. The employees receive the benefits on a periodic basis for loss of employment income due to sickness, maternity or accident. [15] When benefit payments are made by a third party, such as an insurance company in this case, who is not the actual employer, the third party is deemed to be the employer because the actual employer is the party liable to pay its employees. [16] Pursuant to paragraph 153(1)a) of the Act, the person making the WLRP benefit payments is required to deduct or withhold from the payments the amount determined in accordance with prescribed rules for income tax purposes. [17] Paragraph 200(2)f) of the Income Tax Regulations (C.R.C, ch.945), stipulates that every person who makes a payment described in subsection 153(1) of the Act shall make an information return in prescribed form in respect of the payment and subsection 200(2) of the Regulations requires from every person who makes a payment as or an account of, or who confers a benefit or allocates an amount that is in paragraph (f) an amount payable to a taxpayer on a periodic basis in respect of the loss of all or any part of his income from an office or employment, pursuant to (i) a sickness or accident insurance plan (ii) a disability insurance plan or (iii) an income maintenance insurance plan, to or under which his employer has made a contribution, to make an information return in prescribed form in respect of such payment or benefit. [18] Considering the fact that the WLRP benefit payments paid to an employee by his employer or by a third party on behalf or his employer are considered to be employment income, they shall be reported on T4 slips by the employer. ...

The Minister may obtain the advice of the Department of National Health and Welfare as to whether an individual in respect of whom an amount has been claimed under subsection (1) or (2) has a severe and prolonged impairment, the effects of which are such that the individual's ability to perform a basic activity of daily living is markedly restricted, and any person referred to in subsection (1) or (2) shall, on request in writing by that Department for information with respect to an individual's impairment and its effects on the individual, provide the information so requested. 118.4: Nature of impairment. (1) For the purposes of subsection 6(16), sections 118.2 and 118.3 and this subsection, (a) an impairment is prolonged where it has lasted, or may reasonably be expected to last, for a continuous period of at least 12 months; (b) an individual's ability to perform a basic activity of daily living is markedly restricted only where all or substantially all of the time, even with therapy and the use of appropriate devices and medication, the individual is blind or is unable (or requires an inordinate amount of time) to perform a basic activity of daily living; (c) a basic activity of daily living in relation to an individual means (i) perceiving, thinking and remembering, (ii) feeding and dressing oneself, (iii) speaking so as to be understood, in a quiet setting, by another person familiar with the individual, (iv) hearing so as to understand, in a quiet setting, another person familiar with the individual, (v) eliminating (bowel or bladder functions), or (vi) walking; and (d) for greater certainty, no other activity, including working, housekeeping or a social or recreational activity, shall be considered as a basic activity of daily living. 4.02 Analysis 24 4.02.1 There is no doubt in the Court's mind that Parliament should amend the Act so that persons afflicted with Tourette's syndrome, having severe tics, may be considered as suffering from an impairment giving rise to a non-refundable tax credit. ...

The total amount of the expenses claimed was $28,816.94. 10 The Appellant stated that the Employer paid the travel allowance to only one employee per trip in order to encourage car pooling since the cost was passed on to the client; however, he considered that the time to travel from home to Talbot Street was a waste of time and that it was unreasonable to be expected to car pool. ... He remembered receiving a letter from Revenue Canada dated June 20, 1995 setting out the following details of the reduction of the allowable expenses from $2,816.94 claimed to $1,157.97: We have accepted the total expenses claimed however we have reduced your business mileage by the distance which is equivalent to the distance between your home and your employer's place of business as this is considered to be personal travel and not deductible. ...

The government regards this income a priori as ordinarily taxable without taking into account, first, that these are not ordinary benefits but an allowance to pay child care expenses (which has nothing to do with the calculation used to arrive at the basic amount allowed the claimant weekly, an amount to which the allowance is added rather than being considered separately), and second, that the expense sina qua non which generates this income should logically be automatically deductible by the taxpayer. From whatever angle this problem is considered, there is an obvious inequity in the rights of taxpayers depending on whether they are self-employed or the program in which they are participants, and it does not give them the same privileges in tax deductions, because a highly bureaucratic government system (unemployment insurance) cannot consistently adapt itself to its own peculiarities. ...

Analysis 15 Paragraph 118.3(1) and paragraph 118.4(1) of the Act read as follows: 118.3(1) Where: (a) an individual has a severe and prolonged mental or physical impairment, (a.1) the effects of the impairment are such that the individual's ability to perform a basic activity of daily living is markedly restricted, (a.2) a medical doctor, or where the impairment is an impairment of sight, a medical doctor or an optometrist, has certified in prescribed form that the individual has a severe and prolonged mental or physical impairment the effects of which are such that the individual's ability to perform a basic activity of daily living is markedly restricted, (b) the individual has filed for a taxation year with the Minister the certificate described in paragraph (a.2), and (c) no amount in respect of remuneration for an attendant or care in a nursing home, in respect of the individual, is included in calculating a deduction under section 118.2 (otherwise than because of paragraph (2)(b.1) thereof) for the year by the individual or by any other person, for the purposes of computing the tax payable under this Part by the individual for the year, there may be deducted an amount determined by the formula A × $4,118 where A is the appropriate percentage for the year. 118.4(1) For the purposes of subsection 6(16), sections 118.2 and 118.3 and this subsection, (a) an impairment is prolonged where it has lasted, or can reasonably be expected to last, for a continuous period of at least 12 months; (b) an individual's ability to perform a basic activity of daily living is markedly restricted only where all or substantially all of the time, even with therapy and the use of appropriate devices and medication, the individual is blind or is unable (or requires an inordinate amount of time) to perform a basic activity of daily living; (c) a basic activity of daily living in relation to an individual means (i) perceiving, thinking and remembering, (ii) feeding and dressing oneself, (iii) speaking so as to be understood, in a quiet setting, by another person familiar with the individual, (iv) hearing so as to understand, in a quiet setting, another person familiar with the individual, (v) eliminating (bowel or bladder functions), or (vi) walking; and (d) for greater certainty, no other activity, including working, housekeeping or a social or recreational activity, shall be considered as a basic activity of daily living. 16 The evidence has shown that in the year 1994, the Appellant's state of health was sufficiently good, that it did not come within the terms of the impairment contemplated by the Act for the purpose of the tax credit. ... The Act prescribes that the impairment must be of such a severity that it prevents or markedly restricts a person's ability to perform a basic activity of daily living, even where this person is assisted with the appropriate medication, therapy or devices. 19 Under paragraph 118.4(1)(d) of the Act, working and housekeeping are not considered basic activities of daily living for the purposes of the said tax credit. ...