If your business spent $100,000 in expenses but earned only $90,000, you have incurred a business loss of $10,000. This will or could manifest as a tax refund in the year the loss was incurred. Click here.

If your business spent $100,000 in expenses but earned only $90,000, you have incurred a business loss of $10,000. This will or could manifest as a tax refund in the year the loss was incurred. 

In Canada, you can absolutely "write off" more than you earn. This is precisely what a business loss is. Here's how it generally works with the Canada Revenue Agency (CRA):

• Non-Capital Loss: This $10,000 business loss is considered a "non-capital loss." Unlike capital losses (from selling assets for less than you paid), non-capital losses can be applied against other sources of income.
• Applying the Loss:
  • Carry Back: You can carry this $10,000 non-capital loss back up to three previous tax years to reduce taxable income in those years and potentially get a refund for taxes you already paid.
  • Carry Forward: If you don't use the full loss by carrying it back, or if you had no income in previous years to offset, you can carry it forward for up to 20 future tax years to reduce future taxable income when your business becomes profitable.