The taxpayer (Mr. Oke), who leased a recreational vehicle to a company that was in the business of renting recreational vehicles to movie studios for several-week terms, was found not to be himself using the recreational vehicle in a business notwithstanding that he provided some assistance to the proprietor of the company in its business.
In the Court of Appeal, Pelletier JA stated (2011 DTC 5010 [at 5553], 2010 FCA 350, at paras. 29-30):
The higher the level of activity, the more likely it is that one is engaged in a business; the lower the level of activity the more likely it is that the income derives from the use of property.
...[T]he Tax Court compared Mr. Oke’s level of activity relative to other RV owners in Coast-to-Coast’s pool and found that Mr. Oke’s level of activity relative to his own RV did not differ significantly from that of other (admittedly passive) owners. In my view, this was the correct test.