Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues:
Whether AGR-1 slips must be issued for payments under two farm assistance programs.
Position:
Yes.
Reasons:
Both programs meet definition of farm support payment in subsection 234(2) of the Income Tax Regulations.
November 28, 2001
John Oatway HEADQUARTERS
UE Coordinator Terry Young, CA
Charlottetown Tax Services Office 952-1506
2001-010243
Canadian Farm Income Program (CFIP) and Pesticide
Reduction Pilot Program (PRPP)
This is in response to your memorandum dated September 17, 2001, concerning payments made under the CFIP and PRPP. We also acknowledge our conversation of October 10 with
XXXXXXXXXX (Young/XXXXXXXXXX). You have asked us if AGR-1 information slips must be issued for payments under these programs.
The CFIP is a national program designed to provide income protection to eligible farmers who have experienced a dramatic drop in income caused by circumstances beyond their control. Payments are made to farmers whose program margin drops below 70% of their average program margin over a reference period.
The PRPP is designed to demonstrate options for reducing the use of pesticides in commercial agriculture in Prince Edward Island. The program will provide growers with 100% coverage on eligible expenses up to $2,500 to implement an innovation that will result in an overall pesticide reduction on their farm.
Whether an AGR-1 slip is required to be filed in respect of a particular payment depends on whether the payment qualifies as a "farm support payment'. A farm support payment is defined in subsection 234(2) of the Income Tax Regulations as including:
(a) a payment that is computed with respect to an area of farm land;
(b) a payment that is made in respect of a unit of farm commodity grown or disposed of or a farm animal raised or disposed of; and
(c) a rebate of, or compensation for, all or a portion of
(i) a cost or capital cost incurred in respect of farming, or
(ii) unsowed or unplanted land or crops, or destroyed crops, farm animals or other farm output.
In our view, AGR-1 slips are required to be filed for all payments under the CFIP and PRPP programs. We would mention that payments under the two programs would have to be reported by the recipients either as income or a reduction in expenses or other costs, depending on the circumstances.
For your information a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Legislation Access Database (LAD) on the Agency's mainframe computer. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, they can be provided with the LAD version, or they may request a copy severed using the Privacy Act criteria, which does not remove client identity. Should you wish to send a severed copy to the client, you may obtain one by contacting Jackie Page at (613) 957-0682.
We trust our comments will be of assistance to you.
John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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