Loading grain may become a more sporadic proposition if a federal government decision to eliminate cash deferral of sales goes through

Grain farmers face hardship with federal decision

A decision in the latest federal budget will hurt grain and oilseed farmers by taking a tool out of their financial arsenal.

A decision in the latest federal budget will hurt grain and oilseed farmers by taking a tool out of their financial arsenal.

In its budget released on March 22, the government stated it planned to eliminate the deferral option on cash purchase tickets for grain sales.

Essentially, this means any grain sold must be counted as income in the year the transaction is made. Currently, farmers are allowed to purchase cash tickets from companies that would defer the income from that sale into the following year.

As outlined in the budget document mentioning the plan, the federal government feels there is no longer a need for payment of sales to be deferred by farmers since international grain shipments are now the responsibility of private grain handling companies.

Previously, the sole source of handling international grain sales was the federally-operated Canadian Wheat Board (CWB) and those international agreements laid out specific delivery amounts and payment upon delivery. That left the CWB paying farmers for sales that had not taken place, so the deferral payment program was put in place.

However, the government is holding a consultation period on the issue and producer groups are hoping to use the time to change the government’s mind.

According to Kevin Auch, chair of the Alberta Wheat Commission (AWC), this move will take away an important business management tool farmers have used for decades that helps balance out their income over the year.

“If farmers can’t use this tool and defer that income, people are going to tend to store more grain beyond their fiscal year-end rather than sell it and be able to put that into the next year,” stated Auch in a phone interview.

“If farmers are not going to make a move on a sale, the government may in fact get less tax than they believe with this move and the only one to make more off it will be the ones who are selling more bins.

“What that will do is lower everyone’s income and lower the amount of taxes paid because farmers would rather stay at their average income than take a hit by paying extra taxes.”

Auch added that this tool could be abused, but if farmers are simply delaying the payment of taxes then the federal government will get its share eventually.

“Having the deferral can be a benefit, to both farmers and the government, if farmers are ready to go ahead with a sale rather than just delay and storing all that inventory,” he said.

“I’m not a real big fan of farmers losing a tool that has a purpose. Farming is a different kind of business than any other.”

The federal government has issued a May 24 deadline for any stakeholders to hand in submissions on the issue and Auch explained the AWC is currently developing a response and is encouraging any farmers to reach to them to provide input they would like to have.

“A lot of farmers, without this tool, could miss out on the best sales if they can’t defer the income,” he added.

“This isn’t a tax dodge, as farmers still pay all the tax on the deferred sale. It simply helps average out their income, with the potential benefit of turning a bad year into an average one.”

 

Just Posted

Residents come together to light up Ponoka Centennial Park

Volunteers worked over the weekend to put Christmas lights on trees

UPDATE: Motorist dies near Ponoka after loose tire collides with vehicle

Ponoka RCMP seek assistance in locating vehicle belonging to the tire

Almost 100 kgs of suspected cocaine seized at Coutts border crossing

84 bricks of suspected cocaine seized from California residents’ vehicle; largest recorded seizure.

WATCH: CP Holiday Train photos and video in Ponoka

Ponoka Food Bank gets big benefits from Holiday Train

Ponoka County land use plan to get public hearing

Area structure plan for westside of QEII amended slightly, receives first reading

WATCH: Maskwacis First Nations sign historic education agreement

First Nations on Maskwacis put into place education for students under one school authority.

New fighter-jet competition to have national ‘economic interest’ requirement

Trudeau government wants to replace Canada’s aging CF-18s with 88 new fighters by as early as 2025

The top-binged shows on Netflix in 2017

Which show did you cheat on your spouse with by watching ahead?

2017 word of the year: Feminism

Merriam-Webster’s word of the year for 2017: ‘Feminism’

200 Russians to compete in Olympics as neutrals

The Russian Olympic Committee expects 200 to compete in South Korea

Researchers claim the ‘man flu’ does exist

Review of scientific studies suggests ‘man flu’ may be more intense: researcher

Trudeau appoints Supreme Court chief justice

Prime Minister Trudeau appoints Richard Wagner as Supreme Court chief justice

WestJet Christmas video turns children’s wishes into reality

This year’s annual video took a new spin on the 12 days of Christmas

Higher winds could complicate California wildfire fight

The expected strength of the winds have reached uncharted territory

Most Read