Words and Phrases - "subordinate"

From 2007 to 2015, the taxpayer earned aggregate net income of $4.1 million from her medical practice and incurred losses exceeding $4 million from her farming business. In confirming the denial of farming losses claimed by her for her 2014 and 2015 taxation years, the Tax Court had found that her farming business had always been subordinate to her medical practice as a source of income and that there was no evidence that this would change in the foreseeable future, so that, in light of the amendments to s. 31(1) to overrule Craig (which provided that where the taxpayer’s chief source of income is a combination of farming and another source, the farming loss restriction rule applies unless that other (non-farming) source is a subordinate source), her large farming losses were limited to $17,500 per annum.

At issue in the taxpayer's appeal to the Court of Appeal was whether, given that her chief source of income was a combination of two sources of income, namely, farming and a non-farming source (her medical practice), was it the farming source rather than the non-farming source which was the subordinate source of income (see paras. 80, 82)?

After finding (at para. 74) that there was no relevant difference in the French and English text of s. 31(1) and stating (at para. 81) that “’subordinate’ can be seen as an antonym of ‘predominant’” Monaghan JA went on to reject the taxpayer's submission that, to determine which of the two sources was subordinate, priority should be given to time, attention, energy, and capital invested, and not actual or potential profitability.

In this regard, Monaghan JA noted that there was nothing in the text, context, or purpose of s. 31 to suggest that only certain factors, or that anything other than the same factors referenced in Craig and Moldowan, should be considered in the comparison exercise. Monaghan JA further noted that had Parliament intended to limit or specify the relevant factors, it could have done so but had not.

She concluded (at para. 133) that there was no reviewable error in the Tax Court’s application of the relevant factors “including the appellant’s ‘ordinary mode of living, farming history, and expectations’: Craig at para. 42” and in its conclusion that farming was subordinate to the appellant’s medical practice.