Whether, payments made by FCC as an adjustment in the purchase price of land, in accordance with the purchase and sale agreement, is a farm support payment within the definition contained in section 234 of the Income Tax Regulations (the "Regulations"). Also, where FCC unilaterally decides to pass on a portion of the WGTPP payment received by them in respect of lands owned by them and leased to the tenants of the respective land, would such amounts constitute "farm support payments" within the meaning in subsection 234(2) of the Regulations?
It is questionable whether FCC, is an entity that falls within the purview of subsection 234(1) of the Regulations as it may not be an entity described therein as, "Every government, municipality or municipal or other public body (in sections 235 and 236 referred to as the "government payor") or producer organization or association...".
In any event, the purchase price adjustment as set out in the purchase and sale agreement for the land is not a farm support payment described within subsection 234(2) of the Regulations as the amount in question is paid in accordance with the purchase and sale agreement.
The payment to land tenants by FCC was made voluntarily by FCC and is not made pursuant to an equitable arrangement referred to in paragraph 6(c) of the Western Grain Transition Act. Should FCC be bound by Regulation 234, the payments in question would fall within the definition of "farm support payments" as contained in subparagraph (2)(c)(i) of Regulation 234.