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.
XXXXXXXXXX
Attention: XXXXXXXXXX
Dear Sirs:
RE: AGR-1 Information Slip Initiative
This is in reply to your letter of October 5, 1993 in which your outline the details of the Agricultural Land Development Act (ALDA) program.
As we understand it, ALDA basically provides long-term, low-interest loans for on-farm capital improvements. You are particularly concerned with whether the subsidized interest rates charged under the ALDA program, Agricultural Credit Act result in Farm Support Payments referred to in proposed changes to section 200 of the Income Tax Regulations.
As discussed with you (Thornley\XXXXXXXXXX) on November 19, 1993, the Department's position with respect to less than market interest being charged on loans under various Agriculture Canada programs is set out in a publication entitled "Status of Farm Payments" which is available from Agriculture Canada. As the ALDA program appears similar in nature to other loan programs, our position that "the Department does not attempt to assess a benefit in such circumstances" would apply in the case of ALDA loans. Part of the rationale for this position is that in cases where there is a legal obligation to pay interest on a loan, any income inclusion of a benefit for subsidized interest would be off-set by a corresponding interest expense deduction.
We trust this is the information you require.
Yours truly,
Roberta Albert for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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