INCOME TAX |
Income Calculation |
Farming |
Grenier v. Canada
A-597-02
2004 FCA 148, Desjardins J.A.
1/4/04
8 pp.
Appeal from Tax Court of Canada decision (Grenier v. Canada, 2003 DTC 227) dismissing appeals from reassessments by Minister of National Revenue for taxation years 1993 to 1996 inclusive--Appellant raised three issues-- First appellant argued belongs to first of three classes of farmers referred to by Dickson J. (as he then was) in Moldowan v. The Queen, [1978] 1 S.C.R. 480, because is, so he says, "taxpayer, for whom farming may reasonably be expected to provide the bulk of income or the centre of work routine"--Tax Court Judge doubted whether first two Moldowan applicable in case at bar--Tax Court Judge determined that appellant failed to meet third criterion: present and future profitability of business--In terms of present profitability evidence showed that from 1980 to 2000, appellant's forestry business constantly produced losses except for 1997, 1998 and 1999, when small incomes reported--If appellant deducted property taxes required to pay, these small incomes become losses--As for future profitability of business, appellant showed no interest in cutting wood--No objective element as basis to conclude that appellant could make large profits, even at time of retirement--Tax Court Judge rightly held appellant not considered farmer of first class because chief source of income for tax years 1993 to 1996 "neither farming nor a combination of farming and some other source of income" under Income Tax Act, s. 31(1)--With respect to second issue, no error by Tax Court Judge in holding that Minister could reassess for 1993 under Act, s. 152(4)--This provision allows Minister to reassess after normal reassessment period when taxpayer "has made any misrepresentation that is attributable to neglect, carelessness or wilful default"--Appellant's failure to compare statements received from Régie de l'assurance maladie du Québec with bank deposits careless--Capping of remuneration not valid excuse in case at bar because letter from Association of Dermatologists of Quebec dated October 26, 1996, that appellant tried to introduce in evidence, addressing 1994-1995 professional practice year, whereas only 1993 taxation year at issue before this Court--Finally, appellant submitted pursuant to application of Act, s. 31(1), discriminated against for having two sources of income-- Constitutional question not raised before Tax Court Judge-- Thus no evidence at all on this point--Appeal dismissed--Income Tax Act, R.S.C., 1985 (5th Suppl.), c. 1, ss. 31(1) (as am. by S.C. 1995, c. 21, s. 8), 152(4) (as am. by S.C. 2001, c. 17, s. 149).