Can customers of a testing business deduct the cost of testing for bacteria in computing their income? CRA responded:
[I]it is not necessary to prove that the income is actually derived from a particular expenditure in itself. It is sufficient that the outlay or expense is part of an activity of the earning process. …
[T[o the extent that the expenses incurred are reasonable in the circumstances … the cost of testing for the bacterium could be a deductible expense in computing a taxpayer's income under paragraph 18(1)(a).