This was a disallowed ITCs case, where the issue was simply whether or not the appellants carried on business with a reasonable expectation of profit sufficient to satisfy the definition of “commercial activity”.
There was no credible tree farming business and the primary expenses did not seem to relate to the tree farm.
Justice Campbell says, though:
[19] According to the definition of commercial activity contained in subsection 123(1) of the ETA, a business endeavour must be conducted in a commercial manner with a view to gaining a profit and exhibit those badges of trade that would generally be associated with an undertaking of that nature and extent.
This is only true for businesses carried on by individuals (including partnerships of individuals, as was this case). There is no reasonable expectation of profit requirement for a corporation, for example. (There is a basic reasonableness requirement, though: 170(2). And there are restrictions for claims with mixed personal use.)
Living Friends Tree Farm v. The Queen 2016 TCC 116 (Campbell, J.)