We previously discussed the benefits and limitations of paying a spouse or children for work on the farm. Usually, for record-keeping purposes it is most effective to issue cash amounts by cheque to meet the conditions set out by the Canada Revenue Agency. There are other means of employee compensation, however, that are referred to […] Read more
Author Archives
Taxing near-cash or non-cash benefits to employees
Use caution when paying family members for farm work
Farming in Canada has always been a family intensive business, even on larger incorporated farm enterprises. Spouses in many cases are full partners in the process and chief bookkeepers for the business. Part of normal childhood education on the farm is an ongoing list of farm chores, which can include everything from field preparation, planting, […] Read more
Timing critical when jumping on the CPP bandwagon
You can start collecting your Canada Pension Plan benefits as early as one month after you turn 60 or as late as age 70. Many people claim that since there is no best-before date on your birth certificate and no one really knows how long they have to live, it is better to take your […] Read more
Double tax standard can complicate selling your business
So you want to sell your business to another corporation with no family ties to you. That is considered an arm’s length deal and you can claim your lifetime capital exemption. Try and do the same with a family member. That’s called a non-arm’s-length deal, and a nasty bit of the Income Tax Act kicks […] Read more
A farm asset transfer crisis is looming on the Prairies
According to Agriculture Canada the total value of farmland and buildings in Canada amounted to $427.9 billion in 2016. In the same year, the total value of farm machinery and equipment owned and leased by farm operators added another $53.9 billion to the asset base. The fastest-growing age group in the farm population was operators […] Read more
The pitfalls of payroll deductions and remittance for employers
Granted, payroll obligations are not a simple procedure and the red tape may seem overwhelming at times but it is one area that attracts close scrutiny from the Canada Revenue Agency. Essentially, you have to record and remit deductions for Canada Pension Plan (CPP), employment insurance (EI) and all federal, provincial or territorial income taxes. […] Read more
Finding more income than your farm business can supply
Probably more than half of Canadian farmers have to look for other sources of income than their farm business alone. One such source is off-farm work. Many farmers have no alternative but to follow this path, frequently working the farm early in the morning and later in the evening when their off-farm employment has ended […] Read more
Gov’t-funded support available to help with creditors
The pressure of tight financial circumstances and secured creditors wanting their financial agreements honoured is never a pleasant time for a farmer with a lifetime of effort and investment tied into the business. There is federal tax-funded assistance that you can draw on, however, in this situation. From 1986 to 1998 there was federal legislation […] Read more
Canada struggles to decide whether to ratify NAFTA 2.0
Last May, we wrote about the difficulties in arriving at a new North American Free Trade Agreement. Part of the negotiating strategy of the United States was to apply dubious hammers of tariffs on steel and aluminum while President Donald Trump launched rude comments about his NAFTA trading partners — Canada and Mexico. An unusual […] Read more
Taxing energy to curb climate change may hurt economy
New in 2019 are tax increases that will impact homes and businesses for gasoline, natural gas and propane. For the four provinces objecting to the federal government’s imposition of mandatory carbon taxes, fuel at the pump will be subject to a 4.42 cent per litre bump, a 3.91 cent per cubic metre increase for natural […] Read more
