How a Missed Step Cost a Business Its Tax Losses
Imagine running a business year after year, putting in time and money, and seeing losses instead of profits. You plan to use those losses in the future to reduce taxes when the business grows. Then one day, CRA sends you a notice that says “zero tax owing.” It feels like all those losses just vanished.
This is what happened in the Tax Court of Canada decision Onischuk v. The King (2025 TCC 97). The story is an important lesson for business owners about how one missing step can stop you from ever using your losses.
What Happened in the Onischuk Case
Mr. Onischuk reported business losses in 2011, 2012, and 2013. CRA reviewed his filings and issued what’s called nil assessments. These assessments showed no taxes payable, but they also didn’t confirm his losses.
He wanted those losses recognized so he could carry them forward to offset income in future years. Instead of requesting a loss determination from CRA, he filed an appeal directly against the nil assessments. Later, he asked the Tax Court for more time to appeal.
The judge explained that appeals only work when CRA has issued a loss determination. Since he never made that request, the Court could not consider his appeal. His losses remained unconfirmed.
Why the Right Process Matters
Losses have real value because they can be carried back to recover taxes from previous years or carried forward to reduce taxes in profitable years. But for that to happen, CRA must issue a Notice of Determination of Losses. This document formally confirms the amount of loss available to apply to other years.
Without a loss determination, the door to using those losses stays closed. The process ensures that losses are correctly recorded, accepted, and ready for use in the future. It’s an extra step, but one that protects a business’s financial position.
Key Takeaways for Business Owners
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If CRA issues a nil assessment, request a loss determination to confirm your losses.
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Keep complete records of expenses, receipts, and financial statements to support your claim.
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Review your filings with a CPA who understands CRA’s procedures and deadlines.
Good recordkeeping and timely requests give your business the best chance to benefit from losses when profits arrive.
How Cloudiverse CPAs in Burnaby Can Help
At Cloudiverse CPAs Inc. in Burnaby, we guide business owners through every CRA process. We like to think of ourselves as your Google Maps for all things tax. Our team helps you choose the right route—whether it’s filing a loss determination, managing a CRA review, or preparing for future carryforwards—so your hard-earned tax savings stay protected.
Conclusion
The Onischuk case shows how one missed procedural step can make a big difference. Business losses are valuable assets, and protecting them requires the right approach. Understanding CRA’s requirements today can prevent costly surprises tomorrow.
For more details, you can read the full Tax Court of Canada decision here:
Onischuk v. The King, 2025 TCC 97
If you’d like professional guidance on protecting your business losses or managing CRA filings, contact Cloudiverse CPAs Inc. at aman@cloudiverse.ca or call 604-200-4027.
Disclaimer
This article summarizes information from a publicly available Tax Court of Canada decision. It is for educational purposes only and does not express any personal opinions about the individuals or businesses involved.