If anyone knows how to keep financial and other documents in order, it’s Lacey Frizzell. Her consulting business helps farmers and businesses organize their financial information, then set up systems to keep it organized.

“Farmers are unique,” says Frizzell. “There’s a lot of information being thrown at us from a variety of sources, which makes it very hard to keep organized.”

WHY IT MATTERS: Tax season isn’t that far away. A good record keeping system can ease farmer headaches.

Don’t file it unless you really need to keep it, she advised.

Will anyone on your farm management team look at it again? Is it relevant for legal or financial reasons? “What is the purpose?” Frizzell asked.

Usually, the purpose is the Canada Revenue Agency (CRA).

Generally, the CRA requires businesses to keep records on hand for six years. That is, six years after the end of the last tax year they relate to. If your farm’s year-end is Dec. 31, as of January 2026, you should be storing records from as far back as your 2019 fiscal year. If your farm’s year-end is Oct. 31, by January 2026 you should still have records around from your 2018-19 fiscal year.

This covers most expenses and income, but paperwork related to capital purchases should be kept even longer. Keep receipts for anything that would be relevant if you sold or wound down your farm. This includes any land or equipment showing the book value (i.e., initial purchase price). Selling buildings, quota or any equipment you’ve been depreciating has tax consequences — and the CRA might ask for original purchase documents.

The bottom line: you don’t need to keep everything, but check with your accountant if you’re not sure.

Paper or pixels?

Once you’ve decided to keep that receipt, you have to decide if you’ll file it as paper or as a digital record. Both have downsides. If you choose a paper system, you’ll be printing out email attachments and bank transfer notifications. If you choose digital, you’ll be scanning many paper receipts.

Frizzell loves technology, but she uses a paper-based system. “I still recommend that people print everything because paper is still seemingly king,” she said.

First, she says, technology is never 100 per cent reliable. Hard drives fail. USB sticks get lost. Cloud services have storage limits and generally there is an annual fee associated with the service.

Your technology can also become obsolete. If you’re storing receipts through an online bookkeeping program, what if the software company goes out of business? If you change bookkeeping programs, will you still be able to view scanned invoices from past years? Will the records always be readily available and easy to locate?

“I would love to be more enthusiastic about digital record-keeping,” says Frizzell. “I’m just finding that there’s no live technology that you own as an individual, without paying a subscription.”

A third potential problem is the safety of your digital information. “Is your information being shared on someone else’s platform? I caution people on what information they want to share.” In a worst-case scenario, a hacker may have access to all your digital information.

If you do keep your records online, Frizzell recommends working with your local technology guru to set up appropriate firewalls and anti-virus programs.

Rules are for everyone

No matter where your records are stored, a good bookkeeping system has a set of standard operating procedures (SOPs) followed by everyone on the farm.

For example, make sure you know where originals are. “Ultimately there should be one central location where records are held,” Frizzell said. “Especially for audit purposes and recall.”

Some bookkeeping programs allow more than one person to upload scanned receipts and invoices straight into the software. This is convenient for employees picking up parts or materials; they can scan and upload their receipts before they come home from town. But where will you have them store the original paper copies?

With more than one person inputting information, bookkeeping can become messy. If one person uploads receipts from the local “Co-op” and another adds invoices from the “Coop,” your books could show two separate input providers. It’s important to set up standard procedures or make sure the bookkeeper has an eye on things.

It’s also important to have a backup plan for your bookkeeper. If something happens to them, can someone else access your financial records?

Your farm, your plan

The best system is the one that works for your farm and is kept up to date.

Accountants aren’t usually looking at your record-keeping (depending on the type of financial statements you need) but at your bookkeeping. Unless your financial records will be professionally audited, you’re keeping records to serve requests from the CRA and your own managerial needs.

Since nobody but your farm team needs to see a lot of the information, you have an opportunity to develop an system perfect for you.

Decide who needs access to the books and the bank accounts. This will be unique to every farm. Some farms have just one manager; some have several. Sometimes limiting access to accounts can safeguard your finances.

Some staff might need access to your filing system, maybe to check receipts or invoices. But, Frizzell says, “Not all employees need access to everything.” Some bookkeeping programs use password protection to restrict access to some information while still allowing staff to access specific files.

On some farms, several members of the management team might want to access the bookkeeping system. As a farm manager herself, Frizzell says, “I would strongly urge to see paper copies of invoices.”

Frizzell files her paper copies by date and by enterprise (for her, that means separating the cattle bills from the cropping bills). She also keeps separate files for invoices and receipts that they access more frequently.

Large farms might have a chief financial officer. Even small farms though typically have just one person in charge of financial record-keeping. Sometimes, a second person might be actually paying the bills. Frizzell prefers a “check and balance system.”

This could mean one person writes the cheques and a second person reviews them, or it could mean requiring two signatures on each cheque.

As online bill payment becomes more common, Frizzell recommends using an online cash management service that allows you to set up a two-person system for these payments. For example, one person can prepare e-transfers, a second person must approve them. (If you’re looking into this, search for “two to sign” accounts, or “dual sign” accounts.)

Check and balance systems protect farms against the rare, unhappy situation where one partner so desperately needs cash that they resort to “borrowing” from the farm. These systems can also help reduce simple errors. Who hasn’t typed 47 when they meant 74? “A lot of things are human driven, and as humans, we do make errors,” says Frizzell.

Keep it current

Your system is only useful if it’s up to date. For large farms, this could mean inputting information daily. Smaller farms might opt for monthly. If regular bookkeeping sessions are not for you, your system may need a simplifying redesign, or maybe it’s time to hire a bookkeeper.

There are cost savings and benefits to good records.

Accountants typically charge by the hour. They will need less time to calculate taxes if your financial records are well-maintained and reasonably error-free. The horrors of a CRA audit also increase exponentially if your records are hard to find or not available.

Frizzell has found some farmers reluctant to pay for bookkeeping when they know they could do it themselves. But bookkeepers can also take on tasks like developing environmental farm plans, or making sure vegetable production is up to Generally Accepted Accounting Practices (GAAP) standards.

If you want to learn to do your own bookkeeping (or train someone new) could you pay your current bookkeeper to train you? There are also courses available.

“Some of it is pretty simple,” Frizzell says, “but then there’s things that you need to figure out like what capital cost allowance depreciation class does the gravity wagon go in or that new tractor.”

The post Winter downtime: Get your farm records together appeared first on Manitoba Co-operator.

“It can be a little overwhelming to keep track of that information and to know what’s what,” said Jennifer Wright, senior HR advisor with the Canadian Agricultural Human Resources Council in a June 16 webinar hosted by KAP.

The Webinar attempted to unravel some of those options. Wright, with Stephanie Cruikshanks from Manitoba Agriculture and Resource Development, listed and explained the options available to farmers as employers and as individuals.

They noted that these programs continue to evolve, and producers should refer to the associated websites for up-to-date information.

Canadian Emergency Wage Subsidy (link)

This is a wage subsidy for employers for 75 per cent of employees wages, up to $847 per week, for 24 weeks. This is retroactive from March 15 to August 29. Wright noted that this is not a 75 per cent subsidy regardless of total wage, only up to $847 per week.

Eligible employers include individuals, taxable corporations, non-profits and agricultural organizations according to the government of Canada’s website. They must be able to demonstrate an eligible reduction of revenue, and have had a CRA payroll account on March 15, 2020.

Temporary 10 per cent wage subsidy (link)

Eligible employers can reduce the amount of payroll deductions required to be remitted to the Canada Revenue Agency for 3 months. Eligible employers include individuals, partnerships, non-profits and Canadian-controlled private corporations. They must have had an existing business number and payroll program account with the CRA on March 18, and pay salary, wages bonuses or other remuneration to an eligible employee.

There is no application for the subsidy. According to the government of Canada’s website, “Once you have calculated your subsidy, you can reduce your current payroll remittance of federal, provincial, or territorial income tax that you send to the CRA by the amount of the subsidy.”

Canada Emergency Business Account (link)

This is an interest-free loan for small businesses and not-for-profits up to $40,000 to cover operating costs when revenues are reduced because of COVID-19.

Requirements include having been in operation as of March 1, have a federal tax registration, and to have had a total employment income paid in 2019 was between $20,000 and $1.5 million. Employers must apply through banks or credit unions.

Regional Relief and Recovery Fund (link)

Regional Relief and Recovery Fund is a nearly $1 billion fund from the federal government to support regional economies, businesses, organizations and communities, as well as to support the national network of Community Futures Development Corporations.

The fund is intended to mitigate financial pressures on businesses and organizations, including paying employees.

Application is through Western Economic Diversification Canada.

Mandatory Isolation Support for Temporary Foreign Workers Program (link)

This is a one-time program providing farmers, fish harvesters, food producers and processors $1,500 per temporary foreign worker (TFW) employed to help cover the costs of the mandatory 14-day isolation period imposed on the workers when they arrive in Canada.

This might include covering wages and benefits (employees must be paid during isolation), off-site accommodations, transportation to accommodations, and food.

Application is online.

Emergency Processing Fund (link)

This is a one-time federal investment of up to $77.5 million to help food producers implement and adapt to health protocols related to COVID-19, and to access more personal protective equipment (PPE).

Farm Credit Canada COVID-19 support program (link)

FCC has offered deferrals of principal and interest payments, and expanded their loan offerings according to its website. FCC is not giving grants or interest-free loans.

AgriRecovery Initiative (link)

On May 5, the federal government committed to $125 million in AgriRecovery funds in light of market disruptions from COVID-19. On May 29, Agriculture and Resource Development Minister Blaine Pedersen confirmed that Manitoba had signed on for beef set aside funds through the program, the Manitoba Co-operator reported on June 1.

To date no further details have been released.

The disaster relief framework is typically triggered by a province, with the province then shouldering 40 per cent of the resulting aid package.

Surplus Food Rescue Program (link)

This is a program to manage and redirect existing surpluses of food to organizations addressing food insecurity according Agriculture and Agri-Food Canada’s website. It will allow organizations to bid on “significant volumes” of surplus products at the cost of production or less, processing where necessary, and distributing to food serving agencies.

Canadian Emergency Response benefit (link)

This program provides a taxable benefit of $2,000 every four weeks for up to 24 weeks for workers who stopped working due to COVID-19, have exhausted employment insurance benefits, or are eligible for employment insurance or sickness benefits.

Application is through the Canada Revenue Agency or Service Canada.

Canadian Emergency Student Benefit (link)

This program provides financial support to post-secondary students and recent post-secondary or high school graduates who are unable to find work due to COVID-19. From May to August, it pays $1,250 for every four weeks, or $2,000 every four weeks if the student has dependants or a disability.

Students can apply online or by phone.

Student Work Placement Program (link)

This program provides $80 million to support post-secondary students across Canada to get paid work experience in their field of study.

Manitoba Summer Jobs Recovery Program (link)

This program promotes hiring high school and post-secondary students who have been affected by COVID-19. Employers can receive reimbursement of $7 per hour to a maximum of $5,000 per student between May 1 and Sept. 4, 2020, and may hire up to five students.

Students hired must not displace any existing employees. Payments will be made in a lump sum at the end of the summer.

Student Jobs MB App (link)

This is a free app that allows businesses and non-profits to post jobs and see a list of top applicants for that job.

Agriculture and Agri-Food Canada Youth Employment and Skills Program (link)

This program supports employers who hire youth for agricultural jobs. It provides a subsidy of 50 per cent of wages to a maximum of $14,000, and up to $5,000 to reimburse costs if the employee must relocate for the position.

Eligible employers are ag-related organizations like farmers, food processors, and ag-related non-government organizations that will give agriculture career-related work experience to workers 30 years or younger.

The agricultural work must be completed by March 31, 2021.

“Some of these employment programs, particularly, will be available ongoing,” said Cruikshanks. “One of the things we notice in agriculture is the difficulty in recruiting particularly young people into our industry, and so these programs, particularly focused on youth and people with skills that aren’t related to agriculture are an excellent way to bring new people in without the extreme financial risk of you being on the hook for the entire wage.”

She suggested that if farmers can’t use the youth employment programs now, they should consider doing so in the future as a larger uptake from the farm community ensures the programs’ availability into the future.

The post Fifteen COVID-relief programs for farmers and their employees appeared first on Manitoba Co-operator.

That’s according to Mike Poole, a Brandon-based accountant with MNP, at a recent Keystone Agricultural Producers (KAP) advisory meeting.

“I think it’s relatively small and manageable,” Poole told reporters after speaking at the meeting here Nov. 2. “The biggest item is going to be that tax on split income.”

Poole also suspects the federal government, perhaps as early as the next budget, might make changes in how dividend income is converted to capital gain, although the change won’t interfere with parents selling family farms to their children. That was one of the unintended consequences of the first proposal, which triggered massive, widespread opposition from the entire small incorporated business sector, and especially farmers.

Plan ahead

If it occurs, there are strategies to mitigate the impact, but they require advanced planning, Poole said later in a followup interview.

• Read more: Comment: A failure to communicate
• Read more: Comment: The loudest voices against tax reform are not neutral

The biggest issue still in play is income splitting. Poole used an example of parents retiring from the farm and converting their common shares in the farm corporation to preferred shares to give them retirement income.

“We’re concerned right now that retirement stream could fall under the split income rules, which would then make all that retirement income subject to the top personal tax bracket on dividends, which would be in Manitoba about 46 per cent,” Poole said. “That could be a huge impact because if they’re thinking their tax rate is going to be much lower because they are drawing the money out over time now they have essentially reduced the value of that nest egg…”

A similar scenario could exist if preferred shares are issued as part of an estate plan to non-farming kids, he said. Any amount that goes to them could be deemed unreasonable by the Canada Revenue Agency and be subject to top personal tax.

“So we’re (MNP) bringing up these other items so that when they (government) do finalize the legislation we’re not going to get this retroactive effects happening,” Poole said.

“What happened was there were a lot of unintended consequences as a result of the (proposed) legislation. And that is something the minister of finance said — ‘there were items and results in there we just didn’t see.’”

Conversions

Given the 20 per cent, and growing, gap between the tax rate on dividend income and capital gains, Poole said he and other accountants have expected the federal government to stop the conversion of one to the other. And in fact it proposed doing just that with its most recent tax reforms.

The problem was it caught parents selling their farms to their children, making it more expensive tax-wise to sell to a family member than to an unrelated third party.

“If you went around our group at the firm level and you said, ‘what are you expecting coming put of the budget?’ my opinion would be we’re going to get something that’s more pointed at that income conversion into capital gains,” Poole said. “It might be me just being a pessimist, but I’d rather be a pessimist than surprised.

“I think they will shut the door completely on it.”

In an interview later he said if such a change is made the government could easily write the legislation so as to not affect farm sales to the owners’ children, or to add additional cost to a farm estate.

The incentive to convert dividend income to capital gain has evolved over time because the corporate small-business tax rate has been falling, while tax the rate on dividends has been rising, Poole said.

“Ten to 15 years ago when the dividend rate and capital gain rate were close enough together you’d never do this type of planning (conversion) because it just wouldn’t be worth it,” he said. “But when you get a 20 per cent differential now you have a huge incentive for taxpayers to use the income tax act as it is worded and achieve that type of a tax savings. I just don’t feel like they are going to allow that to continue. I hope I am wrong.”

If the federal government does shut down that conversion, there are ways for farmers to deal with it, including taking smaller amounts of money from the corporation over a longer period so the farmer is in a lower tax bracket. What’s left after paying the taxes can then be placed in a Tax Free Savings Account.

“With tax planning, time is your friend,” Poole said.

The post Still some potential pitfalls in proposed federal tax reforms appeared first on Manitoba Co-operator.

Their advice is to get an importer and exporter number from the Canadian Border Services Agency (CBSA) and do the paperwork in advance of importing goods. Even if you don’t plan to export, having an exporter number is necessary if you decide to ship back what was imported.

“We went down to Walhalla (North Dakota in August 2016) to pick up some parts,” Bob Bartley said in a recent interview. “Normally when you come back to the border with farm parts they don’t seem to worry too much about it. But as soon as we were in the door we had to fill out a form on every individual piece that we were bringing back as to where it came from (and its weight). There was a big book with all the code numbers for each part.

“Apparently you can do all this online so that when you get to the border you’ve got it all filled out and it’s not a big deal. But when you land there and it is all news to you it is a big deal.”

As of March 2016, Canadian businesses importing commercial goods from the U.S. must have an import number issued by the Canada Revenue Agency (CRA). It’s part of a policy that is being more strictly adhered to, following the auditor general’s report that identified inaccuracies in the proper accounting of commercial importations, Jacqueline Callin, a media relations officer with CBSA said in an email Sept. 14.

“As a result of this, farmers, as a commercial enterprise, need to correctly identify their imports as commercial goods and account for them in accordance with commercial accounting procedures,” she wrote.

“The importer will now have to complete a B3, Canada Customs Coding Form, instead of the B15 form.”

Because the Bartleys returned from the U.S. with their parts to the Winkler, Man. border crossing during business hours and had their farm business number with them, they were able to get an import and export number, which is added to their nine-digit business number, by phoning the Canada Revenue Agency at 1-800-959-5525.

“When we got that import licence number they (CRA) suggested we get an import and export number,” Bob said. “It is the same number but it gives you permission to export because if you import something and say it is damaged, or it’s not the right one and you have to send it back, then you’ve got to be able to export it. So we were able to do that all over the phone right from the border crossing.”

The process took more than two hours during the busy harvest time, Shelley said. The Bartleys want to get the word out so farmers get an import number and are able to fill out the necessary B3 form online before bringing parts back from the U.S.

“While we were there (at the border crossing) many other business people were picking up stuff across the line and just threw the paper on the (Canadian border official’s) desk,” Shelley said. “They stamped it and away they went.”

To get more information about an import number call CRA at 1-800-959-5525 or go online to the Canada Revenue Agency website.

The post Heads up for farmers, businesses about commercial imports from the U.S. appeared first on Manitoba Co-operator.

“It’s a means for people to put money towards the industry. It provides a tool for people who want to put something back into the industry to be able to do it with a tax credit,” said CCA director Bob Lowe, who ranches near Nanton, Alberta.

The CCA established objectives for the foundation, which have been submitted to the Canada Revenue Agency for approval, a crucial step in obtaining charitable status.

The objectives are to support stewardship practices and conservation actions that conserve the environment, biodiversity and wildlife habitat on working agricultural landscapes; to support education, leadership development, and outreach programs to serve youth involved with beef cattle and grass-range management; and lastly, to support cattle care research and awareness.

Once it is approved the Canadian Cattlemen’s Foundation will form a committee of cattle producers, and representation from the outside community and from within corporate Canada to review requests and submissions for funding.

The foundation is prohibited from funding lobbying efforts or actual beef production, and must be geared towards the wider public good. “It’s open to a lot of possibilities. It allows people to give back to the industry they grew up in if they want to, and it also gives the industry a form of funding to do research,” said Lowe.

Encouraging and supporting youth is a strong part of the foundation’s mandate, and a goal which resonates personally with Lowe. “Scholarships and things like that, that will benefit the industry in a time when mostly due to lack of cattle numbers, we’re running out of money. Cattle organizations all over are running out of money because cattle numbers are dropping. And this could be a means of sourcing some more money to put into things like research and youth,” he said.

The foundation will support youth interested in pursuing a future in agriculture with scholarships, sponsorships and grants. “The business itself has had such negative connotations, at least since the border closed in 2003, and it’s been pretty tough and it’s pretty dang tough to get kids interested. And those who are should be promoted all they can,” said Lowe.

The post Cca Establishing Charitable Foundation appeared first on Manitoba Co-operator.

“The spring of 2011 was very difficult for our farmers due to the destructive flooding on both Lake Manitoba and Shoal Lake,” said Agriculture Minister Gerry Ritz. “The tax relief offered by the program will allow livestock owners to use savings to restock their herds in the spring.”

The tax deferral allows eligible producers in designated areas to defer income tax on the sale of breeding livestock for one year, to help replenish breeding stock in the following year. Proceeds from deferred sales are included as

income in the next tax year, when they may be at least partially offset by the cost of reacquiring breeding animals. In the case of consecutive years of designation, producers may defer sales income to the first year in which the area is no longer designated.

To defer income, the breeding herd must have been reduced by at least 15 per cent. If this is the case, 30 per cent of income from net sales can then be deferred. In cases where the herd has been reduced by more than 30 per cent, 90 per cent of income from net sales can be deferred.

Eligible producers will be able to request this deferral when filing their 2011 income tax returns.

The designated area, which may be expanded later, so far includes the RMs of Coldwell, Dauphin, Eriksdale, Glenella, Lakeview, Lawrence, McCreary, Mossey River, Ochre River, Portage la Prairie, St. Laurent, Ste. Rose, Siglunes, Westbourne, Woodlands, Alonsa, Grahamdale, as well as Division No. 18 unorganized East Part, Division 18 unorganized west part, and Division 19 unorganized.

Livestock producers are advised to contact the Canada Revenue Agency at http://www.cra-arc.gc.ca/cntct/phn-eng.html

for details.

The post Tax Deferrals For Excess Moisture Victims appeared first on Manitoba Co-operator.

The Manitoba additions include the municipalities of Albert , Arther, Brenda, Cameron, Edward, Pipestone, Sifton, Winchester and Kelsey.

The tax deferral allows eligible producers in designated areas to defer income tax on the sale of breeding livestock for one year, to help replenish breeding stock in the following year. Proceeds from deferred sales are included as income in the next tax year, when they may be at least partially offset by the cost of reacquiring breeding animals.

To defer income, the breeding herd must have been reduced by at least 15 per cent. If this is the case, 30 per cent of income from net sales can then be deferred. In cases where the herd has been reduced by more than 30 per cent, 90 per cent of income from net sales can be deferred.

Livestock producers are advised to contact the Canada Revenue Agency at http://www.cra-arc.gc.ca/cntct/phn-eng.html for details.

The post Federal Government Expands List Of Eligible RMs appeared first on Manitoba Co-operator.

It’s no secret that when the 2011 census rolls around, the federal government, ostensibly to “respect the privacy wishes of Canadians,” plans to replace its mandatory long-form census that goes to a fraction of Canadian households with a completely voluntary “National Household Survey” (NHS), destined for a somewhat larger fraction of Canadian households.

It would be too easy to dismiss this as the government’s attempt to shore up support from the aluminum-foil hat demographic, when or if another election comes to pass. Surely there’s a plausible reason why the government would want to pare the credibility of its statistical sample of Canadians down to that of some online “reader poll” – a reason beyond the so-called “privacy wishes” Industry Minister Tony Clement seems to have plucked from not much more than thin air. We’re still waiting for one. And that’s funny. But there’s more.

It’s been said in this space that rural Canadians – who “already have problems maintaining their visibility at the policy table,” as our editor put it – are among those who benefit from the hard data a mandatory long form yields. It might not happen next year, maybe not even in 2016, but it’s a safe bet that public policy on rural Canada – a group defined more than any other by its numbers per square kilometre – will suffer if left up to people who decide on a whim to fill out the NHS. Rural child care, rural health care, rural broadband, rural community upkeep? If you care about any of those things, you may want to seriously consider filling out the NHS. If not, someone else will, and their answers will be funny when applied to you. But there’s more.

Clement has also gone so far as to say the status quo is supported by private-sector agencies, institutions and banks that love to mine Statistics Canada’s data for their own purposes, and that his move is meant to “balance their desire for more and more information” with the concerns of “those Canadians” opposed to a mandatory long form. He’s also on the record as saying the state “should not threaten people with prosecution when collecting detailed private and personal data.”

If you’re a farmer, you’ve likely already guessed why this spring is going to be funny.

Right smack in May, when we all hope you’ll be able to put in a crop, you get to fill out the 2011 Census of Agriculture. You won’t get it from your local enumerator, but through the mail. That’s new. And you’ll be asked to give your farm’s Canada Revenue Agency business number. That’s new too. StatsCan might use it in a pilot project next year to study whether it really needs to ask you for the information you already give out every year at tax time, which in turn “could reduce the response burden for farmers.”

Fine, but while the government hopes to beat back what it considers the private sector’s demand for more data from everyone else, it still plans to ask the farmer, er, well, even more questions.

Next spring, expect to be asked, for the first time, about the number of full-and part-time employees at your farm. And an “environmentally relevant” question about the number of acres from which you baled crop residue. And about your involvement, if any, in “in-field winter grazing or feeding” and “nutrient management planning.” And about your access to high-speed Internet, as this “will assist agriculture service providers in the public and private sectors in planning service delivery to farmers.”

(Now, since I’m the guy putting up daily news at Manitobacooperator.ca, I admit I’m waiting here in that sneaky private sector for your answers about high-speed access. So be honest.)

When asked how all this benefits farmers, even though other agencies phone up all the time looking for your data, StatsCan replies that “only the Census of Agriculture gives data at the local level. Its community-level data ensure that the issues affecting farmers, farm communities and agricultural operations are included when making decisions that affect them and their livelihood.”

Of course, StatsCan didn’t ask to be put in the middle of a public flap about the regular census, but its wholly rational defence of the farm census could – and should – well apply to the census in your community, whether you farm or not.

Oh, and when you get the 2011 Census of Agriculture, remember: “Under the Statistics Act, agricultural operators are required to complete a Census of Agriculture form. Refusing to answer the questions on the census form could result in a fine of $500 or a jail term of three months, or both.”

Andthat’sjust plain funny. daveb@fbcpublishing.com

———

DAVE BEDARD

The post Back To The Data Mine – for Sep. 16, 2010 appeared first on Manitoba Co-operator.

But it seems those good intentions are routinely smothered in what could only be called games bureaucracies play in the name of protecting the public purse.

We don’t argue that responsible due diligence and care to avoid moral hazard is necessary when dispersing public funds. But questions must be asked when these processes end up costing the very people the programs were designed to help.

A case in point is this case of a CAIS overpayment.

Steinbach-area vegetable farmers Roland and Suzanne Chaput were among thousands of farmers who received overpayments averaging $10,000 between 2004 and 2007.

During those years, the formula used for interim payments, partly as a result from political pressure to get the funds flowing quickly to cash-strapped farmers, almost guaranteed overpayments.

It wasn’t farmers’ fault that the people processing the applications were working – as Canada’s auditor general summarized in a scathing 2007 report – “to standards that emphasize the number of applications processed and adherence to procedures more than accuracy of payments.”

The Chaputs’ combined CAIS interim payment for the 2004 farming year was $19,599.28, income that they received in 2005 and dutifully recorded on that year’s statement of farming activities to Revenue Canada.

The CAIS administration informed them in 2006 that their actual 2004 entitlement was only $10,860.66, less a $110 administrative fee. The government wanted them to pay $8,848.62 back, something they were fully prepared to do over time.

The Chaputs soon realized, however, that even though they weren’t being asked to pay interest on the overpayment, the government’s miscalculation was still going to cost them.

When the Chaputs, who had two children living at home at the time, reported the extra income on their 2005 income tax, it reduced their child tax credit and GST rebate eligibility to the tune of $1,568.65.

Although their income would be adjusted again in the year the funds were repaid, one of their children has since left home – so they would no longer be eligible. Those benefits were gone for good.

That didn’t seem right to Chaput.

However, when he presented his concerns to government, he started getting the ping-pong treatment. CAIS told him it was Revenue Canada’s issue. Revenue Canada said it was up to CAIS.

Frustrated, he asked his MP, Vic Toews to intervene. In Sept. 2009, he received a letter from Toews’ constituency office containing a letter from the minister of national revenue reiterating that the Chaputs’ eligibility would be adjusted in the year the funds were repaid – a response that blithely ignored the change in their family status.

By then, Chaput was refusing to pay the government any more until this issue was settled. His accountant told him to give it up. His wife suggested it was time they moved on.

But he wasn’t done yet. On Dec. 1, 2009, Chaput took the federal government to Small Claims Court.

In a handwritten affidavit, he claimed $1,568.65, the amount his accountant calculated he lost in child tax credits and GST rebates as a result of the CAIS overpayment.

“We are prepared to recognize the overpayment as calculated by the CAIS administration and Agriculture and Agri-Food Canada, but only to the extent, and in all fairness, that our request for the above-mentioned reduction is granted,” he said.

A hearing date was set for Feb. 19.

But on Jan. 25, they received a letter from a lawyer with the Department of Justice offering to reduce their bill to the government by $1,568.65. “Having reviewed the details of your matter further with Agriculture and Agri-Food Canada as well as Canada Revenue Agency, I have been authorized to propose a settlement on a without-prejudice basis,” the letter from the department’s Civil Litigation and Advisory Services says.

In a nutshell, “without prejudice” means the government isn’t admitting to any fault in this matter, only that it wants to make this case go away. Could it be because giving Chaput his day in court might open a Pandora’s box?

There is a catch. Although the government is crediting him for the exact amount his accountant says he lost in his child tax credit and GST rebate, it is treating that payment as taxable income, which means he’s still out about $300.

But Chaput won. He isn’t surprised. “To me, it was just plain common sense,” he says.

That’s what’s bothersome about his story. Why does it take the involvement of three government departments over a time span of five years to settle a four-figure dispute that any reasonable analysis would conclude is about common sense and fairness?

How many other farmers find themselves in the same boat, but give up due to bureaucratic fatigue? Moral hazard cuts both ways. laura@fbcpublishing.com

The post Just Plain Common Sense appeared first on Manitoba Co-operator.

It’s been said Canadian farmers must adapt to climate change, while just what that climate will be like is still unknown.

The Canada Revenue Agency and Stats Canada know the state of agriculture in this country as well as anyone. Their figures for realized net income as a percentage of total cash receipts for the years 2004 to 2008 leave us with an average of 5.4 per cent. Add in increased inventory value for total net income, and we are still left with only seven per cent of total cash receipts. The numbers get even scarier if you argue that 2008 was an exceptional year and shouldn’t be included. The same percentages for 2004 to 2007 leave us with only 4.8 per cent of total cash receipts for realized net income, and 5.2 per cent for total farm income. No matter how you cut it, farmers retain a surprisingly small amount of gross revenues as income.

The realization that agriculture exists on a very small per cent of the economic food pie is even more disconcerting when we look at potential damage due to climate change. Enough climatic variability to reduce profits by eight per cent would effectively eliminate the ability of Canadian agriculture to sustain itself. Drought-stricken pastures, flooded croplands, summer storm damage, untimely frosts… it really doesn’t take much to reduce the averages by eight per cent.

Whether you subscribe to the theory of global warming, cooling or are willing to sit on the fence and ignore all the hoopla, it’s a sure thing that the weather changes. Over the long term, climate changes as well. Research indicates that we have enjoyed a rather stable weather in Canada since colonization; many fear that is changing. Given the delicate nature of our profitability, more volatile weather patterns will have a dramatic effect on our ability to feed a burgeoning world population.

If we are in fact entering a period of more volatile weather, the need to manage our water supplies will become of utmost importance. We could be faced with the reality of not only having to drain our croplands during flash floods, but also the need to retain that water to sustain our operations through extended drought. Will the crop varieties we currently use have the drought tolerance, the frost tolerance or the ability to survive in wet soils that we will need in a more volatile climate? And if the answer is no, where will the research come from to get us the plants and management systems we need? The current downsizing of public research just may come back to haunt us.

While predicting the weather has some challenges all of its own, no doubt only the future will tell us what is in store for the shifts in general climate. What is glaringly apparent is that our current suite of business risk management programs will be wholly inadequate in a world where the majority of farmers could be dependent on them for long-term survival. In a political world where net farm income continues to be eroded, we need to pay more attention to maintaining the workforce that feeds us. After all, somebody has to shovel out that door in the morning.

Les McEwen farms near Altamont, Man.

The post Farming The Weather appeared first on Manitoba Co-operator.