Federal budget

[vvalk]

I assume no one has read the budget handed down today. Here is a cut and paste. Read the second paragraph and let you jaw drop. Maybe the biggest impact to farming in most farmers memories and no one is talking about it. Except the Wheat Growers of course.

"Eliminate the income tax exemption for insurers of farming and fishing property, which was introduced in 1954 to encourage the provision of insurance in rural districts. With the increased sophistication today of the Canadian financial sector, insurance companies—including mutual companies—are well placed to effectively underwrite farming and fishing risks.

The income tax rules provide a deferral in respect of deferred cash purchase tickets issued for deliveries of certain listed grains. Given changes in the grain marketing regime in Canada, the Government is conducting a public consultation regarding the ongoing utility of this income tax deferral."

[vvalk]

How many people here use the tools listed in the next sentence as a way to manage their farm's economic stability..... Inventory adjustments, deferrals and prebuying expenses and such are a way of calming the seas.... not only avoiding paying income tax. It can help even out the boom and bust cycles of farming.

I hope those guys remember farming is quite a unique business in many ways.

Can't imagine what this would mean to most farms. This would be far worse then the carbon tax, fuel exemptions etc etc combined

[farmaholic]

A bit of confusion here on my part. I deleted my last post because after reading the quote it didn't seem to pertain to what I posted. I thought it was about insuring parent's lives with Whole Life Insurance policies as a way to create an estate for non farming children to offset the value of the farm received by the farming child.

But my response did make sense regarding the last paragraph of the opening post.

Sorry...

[iceman]

So in plain English are they talking about eliminating cash accounting principles and moving farmer and fishermen to Acrual Accounting? Income tax will be than paid on inventory as of the yr end vs income tax paid on cash sales.

Holy crap will this change the landscape in a hurry. Some of these farming that have been playing the deferring income and prepaying expenses to avoid tax will get a huge shock.

Keep your heads down boys she's open season on Mr Farmer out here.


What a day
Iceman Out

[farmaholic]

Thanks for the translation iceman.

[Oliver88]

Attack on the sole proprietor farmer.

I will have to check into the federal budget in more detail.