Tax-News.com: Canada Extends Consultation On Farming Tax Break

Tax-News.com: Canada Extends Consultation On Farming Tax Break

by Mike Godfrey, Tax-news.com, Washington

24 May 2017









The Canadian Finance Department has extended to July 24 a consultation on the future of the income tax deferral available in respect of cash purchase tickets for deliveries of certain grains.

The consultation was announced as part of Budget 2017 and was scheduled to close on May 24. The Government believes there may no longer be a clear policy rationale for maintaining the tax deferral. The consultation seeks feedback on the ongoing utility, and the potential elimination, of the regime, including any appropriate transitional period or rules.

When a farmer delivers a listed grain (i.e. wheat, oats, barley, rye, flaxseed, rapeseed, or canola) to the operator of a licensed elevator, the operator may issue to the farmer a cash purchase ticket. If this ticket is not payable until the following year (a “deferred cash purchase ticket”), the taxpayer includes the amount of the ticket in income in that following year.

Generally, taxpayers are required to include the amount of a security or other evidence of indebtedness received as payment of a currently-payable debt in income in the year in which it is received.

The Government said that the historic rationale for the tax deferral of cash purchase tickets in the case of grain farmers relates to international grain shipment agreements, and to the Canadian Wheat Board’s former position as the sole purchaser of listed grain in Manitoba, Saskatchewan, and Alberta.

The grain marketing regime has since been deregulated and the Canadian Wheat Board commercialized. The Government said that the delivery of the listed grains is now the responsibility of private businesses, and not the federal Government.

Published at Tue, 23 May 2017 19:00:00 -0500