http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/110339/index.do 
Berger v. The Queen (June 19, 2015 – 2015 TCC 153, C. Miller J.).
Précis: Mr. Berger was a journalist who previously worked for FAN 590 radio covering hockey. As one part of his work he filed blogs. Fan 590 began to cut staff after it was taken over by Rogers in 2002 and new management was installed after the economic downturn of 2008. Mr. Berger decided to plan to become a full time blogger is he was terminated by FAN 590 and support himself with advertising on the blog. He was in fact terminated on June 1, 2011 and then started blogging on his own site: Bergerbytes.ca. In 2011 and 2012 he claimed business losses of $26,540 and $37,866, respectively. CRA denied these losses on the basis that he was not engaged in a business activity.
The Court allowed his appeal with the exception of $1,100 of non-deductible meal expenses he had claimed.
Decision: The Court first reviewed the jurisprudence in the area:
[17] Both Parties referred me to the seminal case of Stewart v R., the 2002 decision of the Supreme Court of Canada knocking the former “reasonable expectation of profit” test on the head and instituting a new process for addressing this type of issue.
[18] Under the Supreme Court of Canada’s guidance the first inquiry is whether the nature of the activity is clearly commercial, in which case there is no need to analyse the taxpayer’s business decisions. Second, if there is a personal element, did the taxpayer intend to carry on the activity for profit, and is there evidence to support that intent? The Supreme Court of Canada points out that even where there is a personal pursuit, if it is undertaken in a sufficiently commercial manner, the venture will be considered a source of income. The court stipulated in this analysis that “this requires the taxpayer to establish that his or her predominant intention is to make a profit from the activity and that the activity has been carried out in accordance with objective standards of businesslike behaviour”. It goes on to cite the objective factors to be considered as:
1. the profit and loss experience in past years;
2. the taxpayer’s training;
3. the taxpayer’s intended course of action;
4. the capability of the venture to show a profit; and
5. any other factors.
[Footnote omitted]
The Court concluded that the first factor was neutral since there was no profit or loss history prior to 2011. The second factor however favoured Mr. Berger:
[26] I certainly take the Respondent’s point that, while Mr. Berger had significant sports reporting “training”, he had no education or experience on selling advertising or running a media business. I find, however, that this is not fatal. Mr. Berger has taken a commercial activity, sportswriting, for which he got paid for 20 years and used that experience to attempt to continue to get paid. As indicated earlier, this is not just a sports enthusiast having a crack at making money from his passion. Mr. Berger has some impressive credentials to suggest his approach.
The third factor, the taxpayer’s intended course of action, also favoured Mr. Berger:
[30] The first factor was neutral. The second factor favoured Mr. Berger operating a business. This factor is where the dilemma arises between judging Mr. Berger’s business acumen versus simply comparing his actions to objective standards of businesslike behaviour. And the businesslike behaviour specifically to be addressed is the soliciting of sponsors. He did nothing in the hopes that the product would effectively sell itself. And, in the first 18 months at issue before me, what happened? A sponsor did indeed fall into his lap, in effect bearing out his view that a good idea well-presented would have sponsors knocking on his door. I heard no evidence as to what is the norm when it comes to selling “blog advertising” but I am swayed by two factors: first, this was the very early stages of a fledgling “business” and concentrating on a quality product to attract readers (which concentration is evidenced by paying for help to get a professional website) is a businesslike decision with some foundation. Second, Mr. Berger’s idea and his product did result in attracting a sponsor. While I might view his intended course of action (or inaction) as poor business judgment, it is not so devoid of commercial reasoning to conclude the venture was personal and nothing more. On balance, I find Mr. Berger did intend to pursue profit and did take, in those 18 months, commercial steps to do so. There will come a time, however, where continuing on this course without any sponsors knocking on his door can only lead to a conclusion that a commercial expectation has been overtaken by personal dreams. I do not have years after 2012 in front of me.
The final factor, capacity to show a profit, ultimately resolved the matter in Mr. Berger’s favour:
[31] Mr. Berger fails in this regard to have provided me with any projections, comparisons, readership numbers, anything at all frankly to allow me to accurately assess the venture’s capability to make a profit. It is all conjecture. No solid data, just a suggestion his readership numbers were trending upwards. This factor works against Mr. Berger’s position that this was not a hobby but a business. Businesses are out to make money and generally have an idea of how much and how feasible the money-making venture is. Mr. Berger does not seem to have a handle on this. It leaves me to guess whether a steady readership in the few thousands is sufficient to attract sponsors to cover expenses of $30,000 $40,000 a year.
[32] I conclude the lack of evidence on this aspect, while not helpful to Mr. Berger, is also not fatal. I simply have not been convinced one way or the other that this venture is capable of showing a profit. But, given the very early stage of his venture, and taken together with the other factors, I find that the activity does go beyond hobby. I conclude Mr. Berger had a predominant intention to make a profit, and in the first 18 months behaved in a reasonable businesslike manner to pursue that end. As I hope I have made clear to Mr. Berger, my view is limited to the short term start-up phase of his venture.