Tax Court Rejects Appeal on Rent Subsidy Eligibility

OUTCOME: Dismissed

Citation: 2026 TCC 119 Date: 20260623 Docket: 2024-2515(IT)I BETWEEN: [APPELLANT] Appellant, and HIS [NAME] THE [NAME], Respondent .

REASONS FOR

JUDGMENT (I have prepared these Reasons for Judgment from the transcript of the Reasons for Judgment I delivered orally from the [NAME] on May 5, 2026 at Toronto, Ontario. I have edited them for punctuation and to remove repetitive phrases where I stumbled over my words. I added the phrase in square brackets in paragraph 9 to provide basic context. I did not make any substantive changes.) [NAME]. [ 1 ] I'm going to give my oral judgment on this now. I won't be issuing written reasons for judgment. [ 2 ] I heard the testimony from both of you. While there were some inconsistencies in your testimony, I didn't think they were important to the key issues before me. I found you generally credible. [ 3 ] As you know, the issue that the government has with the application is that [NAME] has to have been dealing at arm's length. He can't be related to the landlord. [APPELLANT], as tenant, can't be related to the landlord. He's clearly related to [RESPONDENT] because she's his mother [ 4 ] And he was also related to [NAME] as you agreed in your submissions because all of the shareholders of [NAME] are a related group where every member of that group is related to each other by blood or marriage and that group controls the company and therefore [NAME] is related to that. [ 5 ] As a result, he doesn't meet one of the qualifications that you have to meet to get the subsidy, and so, it's not a qualifying rent expense because the rent wasn't paid to an arm's-length entity. [ 6 ] I think you recognize what I just said and I think what you're essentially arguing is that due to some bad advice from CRA, you perhaps made the application incorrectly, and you'd like me to redo the application essentially as if it was [NAME] or [NAME] that had applied for it. [ 7 ] I don't have the power to do that. I can deal with the appeal in front of me, and the appeal in front of me is [NAME]'s appeal. I can't change the law. [ 8 ] I don't know whether [NAME] would have qualified or not. The Respondent has raised a number of other issues that [NAME] might have had with that including not having a business number at the relevant time, or not having had one early enough but none of that actually matters because [NAME]'s application isn't in front of me and, as you said, it's far too late now to bring one. [ 9 ] So, based on all of that, the appeal of the redetermination of [NAME]'s qualifying periods 10 to 21 [of the [NAME]] is dismissed. The Respondent isn't seeking costs, so, I'm not going to award costs. Signed this 23rd day of June 2026. “[NAME]” [NAME]. [NAME]: 2026 TCC 119 COURT FILE NO.: 2024-2515(IT)I STYLE OF CAUSE: [NAME] [APPELLANT] v HIS [NAME] THE [NAME] OF HEARING: Toronto, Ontario DATE OF HEARING: May 5, 2026

REASONS FOR

JUDGMENT BY: The [NAME] [NAME] E. [NAME] OF ORAL

REASONS: May 5, 2026 DATE OF

REASONS FOR

JUDGMENT: June 23, 2026 APPEARANCES: Agent for the Appellant: [redacted] Counsel for the Respondent: [redacted] [NAME] [COUNSEL] COUNSEL OF RECORD: For the Appellant: [redacted] n/a Firm: n/a For the Respondent: [redacted] Ottawa, Canada