“The courts have shown a marked reluctance to allow employees to deduct business losses from employment income for child support purposes and have frequently refused to deduct the loss from their income (see Proulx v. Proulx 2009 CanLII 19938 (ON SC); Burrell v. Robinson, (2009), 2009 CanLII 33027 (ON SC), 78 R.F.L. (6th) 351 (Ont. Sup. Ct.); Luke v. Richards, 2018 ONSC 1695; Hargrove v. Holliday, 2010 ABQB 70; Thomas v. Thomas, 2019 NLCA 32). This is because it would be unreasonable to ask the other parent to assist in financing a business venture by accepting a lesser amount of child support (Boak v. Boak, 1999 CarswellBC 2876 (B.C.S.C.))
In Burrell, Justice Eberhard disallowed rental loses that the payor had deducted against his employment as a pilot. In paragraph 5, Justice Eberhard wrote:
The respondent father also argued that it would be unfair to disentitle his reliance on these losses since the income he may someday derive from these rental properties will certainly be required to be included. At such time as there may be such income, the cost of earning same may well become relevant but at the moment the rental properties are merely an investment into which he has decided to put his available resources. Once support is determined this court does not dictate how individuals spend their resources. The increase in equity is testament to the good sense of the Respondent Father’s choice. That does not relieve him of the obligation to pay support in accordance with the income available to him.
Justice Eberhard’s reasoning seems to be that, since the payor’s assets will ultimately be enhanced, the deductions against his employment income should not be allowed.
In Richards, Justice Timms concluded that legitimate hard costs – such as mortgage interest, insurance, utilities, and municipal taxes – are acceptable deductions against employment income for the purposes of determining a payor’s income for child support purposes.”
Mastrangelo v. Di Cristofaro, 2019 ONSC 7264 (CanLII) at 98-101