I go through these reviews all the time. Client needs to draw a diagram and list the footage of each wall and room and what each space is on each floor. Or get the city planning files.
Room count will not fly in a review of the claim, the CRA expressly wants measurements and a schematic/drawing.
A new one on every, courtesy of the Court of Quebec (so not binding elsewhere), but will no doubt be looked at. Text from
The taxpayer operated a daycare center in the basement of the home of her and her partner and, following their move to a second home, the daycare was operated in the basement and part of the first floor of the second home.
She claimed expenses (such as utilities, insurance, maintenance, municipal taxes, and mortgage interest) relating to the use of the residence, based on the relative daycare floor area of 30.2% and 38.5% for the two homes, respectively. Revenue Quebec reduced these deductible expense proportions to 7.5% and 9.6%, respectively, on the basis that the daycare spaces had annual business-use hours of 9.5 hours per day for 228 days of the year which, expressed as a percentage of the total hours in the year, should be applied to the above floor-area percentages.
In confirming the application of the Revenue Quebec percentages, Huppé JCQ stated:
Whether or not she chose to use the spaces dedicated to the daycare for personal purposes does not change the fact that these spaces were located in the very place where she lived and were immediately available to her if she wished. Those spaces were, first and foremost, a residence. It was only incidentally that they also served for daycare during certain specific periods.
He fully confirmed her claims for various other expenses such as food, furniture costs and expenses for taking the children on outings.
Neal Armstrong. Summary of Pintal v. Agence du revenu du Québec, 2025 QCCQ 2913 under s. 18(12).
Editorial comment from me: ugh.
Am I missing something? Doesnât this just confirm longstanding CRA practice?
Donât think Iâve EVER run across âhours of useâ as a calculator for Office in Home. Square footage, yes, but not then reduced by a factor of âuse in non-business hoursâ. Donât see anything in a quick search of CanLII either.
This is not office in home @SmallBizGuy , this is specific to daycare.
Itâs still âbusiness useâ of the home.
True, but there are specific rules - just look it up under daycare operations.
ârulesâ? Act, Regulations, or just CRAâs view.
Itâs specific to daycares in the home. Itâs in CRAâs guidance for daycare businesses. Nothing new here.
CRA applies this specifically to daycare businesses in the home, because unlike other home-based business they tend to make use of many different parts of the house.
See page 7 of Using Your Home for Daycare https://publications.gc.ca/collections/collection_2017/arc-cra/Rv4-38-2016-eng.pdf
TaxCycle confirms the hour for a Day Home.
So hereâs the thing about CRAâs publications: they are ALL âopinionsâ. None are law, many have never been tested iin Court. They are how CRA âoperatesâ, thatâs all. That applies to anything on the website, Techical Interpretation Bulletins (now archived) etc. Itâs their opinion of how the law in the Income Tax Act (âITAâ) is to be interpreted in given situations, and their opinion of what Parliament intended in passing said law.
Theyâre judged wrong as often as right when tested in Court.
The danger of the instant case is that CRA will now seek to apply that same principle to ALL home offices on the same basis, because a given one could also (although sometimes with difficulty) be used by someone forâŠumâŠping pong, or sleeping, or playing with a dog.
As always, the ITA is the rule that binds them all, and the Courts the ultimate arbiter of how those laws are to be interpreted and applied.
Found it interesting that this calculation by CRA https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-22900-other-employment-expenses/work-space-home-expenses.html also allowed for part time use of home common areaâŠ
For dayhomes the hours are always required. The meals get even more picky for calculations.
Hate dayhomes
Yes, CRAâs publications are how they state they will operate. Theyâve been stating for at least 15 years (I didnât bother to try to find any older sources) that daycares in the home are generally subject to this apportionment rule.
Claiming that a court case that supports their long-held position is somehow going to affect how they interpret other home-based businesses is strange. If they wanted to apply this rule to other businesses, they would presumably have done so. As you say yourself, these are just their opinions about how things should be done. So if they thought all home businesses should be subject to such a rule, there was nothing stopping them from implementing such a rule. They didnât wait for a court to decide the rule should apply to daycare businesses. Why would they wait to implement such a rule for other businesses?
Probably because Iâve never had a dayhomeâŠnot in 40+ years of tax. Which, I must admit, is a bit surprising because Iâve had just about every other kind of business known to humankindâŠwell, that might be a small exaggeration. 
So my surprise was more at the approach than to where it was appliedâŠwhat that DOES tell me though is that I wouldnât WANT a dayhome as a client. I try to avoid the annoying stuff.
Rabbit is good, rabbit is wise. Avoid dayhomes like the plague unless you have someone who is intelligent running it, and who understands how important tracking things is.