18 June 1990 Ministerial Correspondence 900274 F - Definition of Family Farm Corporation

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.

Attention: 19(1)

June 18, 1990

Dear Sirs:

This is in reply to your letter of March 27, 1990 concerning the definition of a family farm corporation.  We apologize for the delay in replying.

A corporation raises ducks and geese.  It has found it necessary to build its own processing facilities in order to market the ducks and geese.  It also processes the ducks and geese of a related corporation and others.  You inquire whether the Department would view the entire operation as an integrated farm operation qualifying as a family farm corporation.

The answer to this question will depend on the magnitude of the processing operation in relation to the actual raising of ducks and geese and whether it constitutes a separate business.  There is not sufficient information to give a definite answer.  We can provide some general comments concerning the factors that should be taken into account. 

If the processing was limited to processing the corporation's own birds, it is likely that the total operation is farming. However, since this is not the case, it is necessary to determine if the processing operation is a separate business.  Some of the factors to consider are as follows:

-     are the time, activities and resources devoted to processing minor compared to those devoted to raising ducks and geese,

-     is the total operation accounted for a farming and is it in fact difficult to separate the processing records from the other operations, and

-     are the customers of both operations the same?

The following Interpretation Bulletins provide additional information on the guidelines to be used.

We trust these comments will be helpful.

Yours sincerely,

for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs Branch

Encl.