SASKATOON – Saskatchewan Wheat Pool says it isn’t a tax cheapskate.
The company has been mentioned in a top 100 list of Canadian corporations that the Ontario Federation of Labor claims pay an unfairly low share of corporate tax.
But the chief financial officer of the company said the study lacks credibility.
“It’s probably a matter that they don’t understand the nature of taxation in a co-operative,” said Lyle Spencer.
The report, called Unfair Shares, shows the pool paying $3.3 million in income tax on a 1993 profit of almost $32 million, or a tax rate of 10.4 percent.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
Patronage allocations taxed
The analysis ignores the income tax members pay on patronage allocations – similar to dividend payments, said Spencer. In 1994 that amounted to $26 million. The income tax act allows co-operatives to deduct patronage allocations from taxable income, Spencer said. But when members receive the money they must pay income tax on it.
“We know that income is being taxed either by us or by the farmer members …. We know that we’re operating fully in accordance with the requirements of the (income tax) act,” said Spencer.
