The appellant appealed a reassessment for its 2015 taxation year in which the Minister treated profit from the sale of a Gatineau office building as business income under the Income Tax Act rather than a capital gain.
Applying the Canada Safeway and related adventure-in-the-nature-of-trade factors, the Court held that the appellant acquired, developed, financed, and leased the property as a long-term investment and not with a primary or determining secondary intention to resell at a profit.
The Court relied on the multi-phase development plan, long-term financing, sustained leasing efforts, building choices consistent with long-term ownership, and the fact that the eventual sale followed an unsolicited offer and later changes in surrounding circumstances, including zoning issues affecting future phases.
The reassessment was therefore incorrect, and the profit remained on capital account.
The appeal was allowed with costs.
