In response to various questions on the impact of Stewart and Walls including its impact on CCRA’s use of the reasonable expectation of profit test,(“REOP”), CCRA stated inter alia:
The REOP test, as it previously applied, will no longer be used to determine if there is a source of income under the Act.
The CCRA will, however, question whether a taxpayer is operating in a sufficiently commercial manner when the activity has some personal or hobby element.
At this point, a taxpayer's venture will be reviewed and criteria, including those set down in Moldowan, will be considered in determining if the taxpayer intends to carry on an activity for profit and the overall evidence supports that intention. …
If a taxpayer is motivated by tax considerations when he or she enters into a business or property venture, this will not detract from the venture's commercial nature or characterization as a source of income under the Act.