The federal government has decided to not make any changes to how it treats deferred cash purchase tickets for grain after proposing in the 2017 budget to potentially eliminate the option.
Many farm groups voiced their opposition to the idea of dropping the income tax deferral mechanism during consultations held in spring and early summer.
“The Government has carefully considered all the submissions received during the consultation, and will maintain the current tax treatment of deferred cash purchase tickets…,” said a statement from Agriculture and Agri-Food Canada, issued on Monday.
When delivering a listed grain (such as wheat, oats, barley, rye, flax, or canola,) farmers can ask a licensed elevator operator to issue a deferred cash purchase ticket, allowing income from the delivery to be reported in the following year. It’s a tool used by many farmers to manage income for tax purposes and for flexibility in grain marketing.
88 percent of respondents to a poll on RealAgriculture in March said they still use deferred cash purchase tickets.
The proposal outlined in the budget in March argued there’s “no longer a clear policy rationale for maintaining the tax deferral” following the end of the Canadian Wheat Board’s monopoly in 2012.
The commitment to maintaining the current treatment of cash purchase tickets was one of three tax-related announcements Agriculture Minister Lawrence MacAulay made on behalf of Finance Minister Bill Morneau on Monday:
- A tax deferral extension for livestock producers who received compensation for forced destruction of animals because of the bovine tuberculosis outbreak in Alberta and Saskatchewan (more info here);
- Livestock tax deferrals for designated regions that suffered from flood or drought to allow producers to defer income to coincide with rebuilding herds. The designated areas include much of southern Alberta and Saskatchewan (see list here);
- No change to deferred cash purchase tickets for grain after consultations this past spring and summer.