The federal government is giving the Canadian grain industry another two months to voice their opinions on cash purchase tickets for grain deliveries.
On May 23, the federal finance department issued a statement confirming that the public consultation period on cash purchase tickets for grain would be extended to July 24.
The consultation period was originally scheduled to end May 24.
David Barnabe, senior media relations officer with the federal finance department, said the decision to extend consultations was made at the request of farmers.
“Subsequent to the announcement of the consultation, a number of stakeholders expressed concern that the announced consultation period overlaps with a very busy time of year for farmers and requested an extension of the consultation period,” Barnabe wrote in a May 25 email.
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Deferred cash purchase tickets are a popular tool that prairie farmers use to manage cash flow and taxable income.
A farmer who delivers grain to a licensed elevator can arrange to receive a cash purchase ticket in lieu of immediate payment.
The cash purchase ticket allows the farmer to defer income to the following taxation year.
Canadian farmers used the tool to defer an average of more than $2 billion of farm income annually to the following tax year between 2012 and 2015.
“In 2013, 2014 and 2015, the value of cash purchase tickets deferred from income was approximately $2.1 billion, $1.7 billion and $2 billion respectively,” Barnabe wrote.
In its most recent federal budget unveiled in March, Ottawa signaled its intention to review the use of cash purchase tickets with the potential to eliminate them.
Ottawa claims that the use of deferred cash purchase tickets for grain is a “departure from the general rule with respect to taxpayers … who 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.”
Alberta Wheat Commission chair Kevin Auch said the tool is used by farmers to make important grain marketing decisions.
“Many farmers use this tool to avoid having to choose between losing a sale that might bump them into a higher tax bracket that year or losing the ability to maximize their revenue due to severe tax Implications,” said Auch.
“For many farmers, eliminating this tool also eliminates the option to sell grain when there is a good price for it.”
Interested parties can submit comments to consultation_tax_2017@canada.ca by July 24, 2017.
