Yes, In Many Cases. CRA Allows Deductions For Legitimate Business Expenses Even In Loss Years, Provided The Activity Has A Reasonable Expectation Of Profit Over Time. Business Losses From A Genuine Commercial Activity Can Often Be Applied Against Other Income - Such As Employment Income - Reducing Your Overall Tax Payable. However, CRA Scrutinizes Losses Claimed Repeatedly Over Many Years, Particularly For Activities That Resemble Hobbies More Than Businesses. If Your Self-employment Activity Has Not Produced Income In Several Years And Shows No Reasonable Commercial Path To Profitability, CRA May Reclassify It As A Personal Pursuit And Disallow The Expense Deductions.