Bonde, 2026 TCC 180: a concrete finisher's 'personal endeavour' argument fails and gross negligence penalties stand

2026 TCC 180 · Tax Court of Canada

Author: Sas Tullo

This is an income tax appeal by a self-employed concrete finisher who, after attending Paradigm Education Group seminars, decided that his trade was a non-taxable “personal endeavour” and stopped reporting his income. The Minister reassessed him for three years of unreported business income totalling $830,824 and added gross negligence penalties. The Tax Court dismissed the appeal on every point. The decision matters to anyone told that the Supreme Court’s decision in Stewart lets a person opt out of tax by disclaiming an intention to profit: the argument fails, and it carries penalties with it.

Facts

Mr. Bonde earned his living in the construction industry doing concrete finishing, smoothing freshly poured concrete at building sites (paras 2-3). He was hired as a subcontractor for a contracted amount, sometimes bid against other finishers, sometimes paid a small crew of assistants, and worked as a sole proprietor (paras 4-7).

In or about 2005 he became aware of Paradigm Education Group, headed by two friends of his, Russell Porisky and Debbie Anderson, and through its meetings and publications came to accept that Stewart v. Canada, 2002 SCC 46, permitted non-liability for income tax on the basis of claiming “no subjective intention” to seek profit (paras 8-9). He then set about removing the business-like features of his work: he avoided registering a business name, avoided business bank accounts and credit cards, dismissed his bookkeeper and accountant, and replaced ordinary invoices with an unusual form of invoice prompted by Paradigm (para 10).

The Minister’s assumptions, pleaded in the Reply and not displaced on a balance of probabilities, were that the appellant was in the concrete business under names such as Peter Bonde Concrete and Bonde Concrete, that he reported nil business income and late-filed his returns for 2009, 2010, and 2011, and that he earned and failed to report business income of $304,550, $271,289, and $254,985 in those years (para 11).

Issues

The Court decided two questions: whether the concrete finishing work was a taxable business source of income or, as the appellant argued, a non-taxable personal endeavour under Stewart (paras 12-15), and whether the gross negligence penalties under subsection 163(2) of the Act were justified (para 20).

Holding

The appeal was dismissed. The reassessments for unreported income of $304,550, $271,289, and $254,985 were held valid, as were the gross negligence penalties of $37,197, $32,236, and $30,119 (Judgment). Costs went to the respondent. The formal judgment fixes costs at $2,000 while paragraph 24 of the reasons refers to $3,500; the discrepancy is in the published text and is not resolved here.

The court’s reasoning

Russell J. began with the Federal Court of Appeal’s bench judgment in Porisky et al. v. The King, 2025 FCA 197, which concerned the founders of Paradigm themselves and addressed the same argument. He quoted the Court of Appeal’s statement that all of the appellants’ issues turned on accepting Mr. Porisky’s view that, because they claimed no subjective intention to earn a profit, their activities were a personal endeavour rather than a source of income, and that the Court “has consistently rejected those views”, citing Meerman v. Canada, 2019 FCA 119, De Geest v. Canada, 2022 FCA 22, and Shull v. Canada, 2025 FCA 25 (para 16).

He then turned to Stewart itself, quoting paragraphs 5, 50, and 53 of that decision. The source test distinguishes commercial from personal activities, and the two-stage approach asks first whether the activity is undertaken in pursuit of profit or is a personal endeavour, and second whether the source is a business or property (para 17). The passage the judge underlined is the Supreme Court’s statement that the pursuit of profit analysis “will only require analysis in situations where there is some personal or hobby element to the activity in question”, and that where “the nature of an activity is clearly commercial, there is no need to analyze the taxpayer’s business decisions” (para 17). Applying that passage, the judge held that Mr. Bonde’s concrete finishing work is clearly commercial, that such endeavours necessarily involve the pursuit of profit, and that there is no personal or hobby element of any kind in it (para 18). That conclusion was entirely consistent with Porisky (para 19).

On penalties, the Crown pleaded that the appellant knowingly, or in circumstances amounting to gross negligence, made false statements or omissions in his returns by failing to report the income, engaging subsection 163(2) (para 20). In written submissions the Crown added that he had decided to opt out of income tax without speaking to any tax professional, did nothing to check whether the Paradigm method was lawful even after its founders were jailed, and was wilfully blind (para 21). The appellant answered that his belief was based on established legal principles and that no taxpayer is required to consult a lawyer or accountant before asserting that an activity is personal (para 22). The judge was not persuaded that the penalties were unjustified by the appellant holding his own view of Stewart without consulting a professional tax adviser; the fact was that he “chose not to report for tax purposes income of more than eight hundred thousand dollars, without checking this with any tax professional”, and the judge concurred with the assessment of the penalties (para 23).

According to the consolidated text on the Justice Laws website, section 163 has been amended several times since the 2009 to 2011 taxation years, most recently in 2026; the opening words of subsection 163(2) are unchanged.

Practical implications

The decision applies a settled line of authority rather than making new law. What is useful is its directness. The judge did not weigh indicia of commerciality; he relied on paragraph 53 of Stewart to hold that a trade carried on for contracted fees is commercial by its nature, so that the taxpayer’s professed state of mind is irrelevant, and the steps taken to strip the work of business features (para 10) changed nothing.

In my view the penalty reasoning is the part advisers should note. The Court treated the decision to stop reporting a large income on the strength of a promoter’s reading of a Supreme Court case, without any professional check, as sufficient for gross negligence; the scale of the omission and the absence of any inquiry were enough without an express finding of wilful blindness. The taxpayer’s point that ordinary people need not consult professionals before treating an activity as personal has some force in the abstract, but none for someone earning several hundred thousand dollars a year from a construction trade.

The reasons record that the Federal Court of Appeal has now rejected the Paradigm theory four times, including in the appeal of its founders; taxpayers who adopted it should expect the same result. Whether an appeal was taken is not verified here.

For a reader without legal training, the lesson is simple. If you are paid for work that any outsider would call a business, calling it a personal endeavour does not make it one, and declaring nil income on that basis invites a penalty on top of the tax. Anyone persuaded by a seminar to stop reporting should get independent advice before a reassessment arrives.

This comment is general information, not legal advice. The law may have changed since the decision; check the current text in the tax wiki.

Citation and links

Bonde v. The King, 2026 TCC 180. Judgment and reasons dated October 19, 2026 (appeal heard June 26, 2024, at Vancouver, with written submissions in August, September, and October 2024). Russell J. Docket 2015-4474(IT)G. Reasons on the Tax Court’s site. Also on CanLII. This was a first-instance appeal from reassessments; there is no decision under appeal.