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 Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Mr. Gordon R. White
Director
Financial Operations and 960181
Special Projects A.M. Brake
Agriculture Canada
Ottawa, Ontario
K1A 0C5
Attention: April Steel
May 1, 1996
Dear Sirs:
Re: Saskatchewan Safety Net Programs
This is in reply to your letter of January 8, 1996 requesting our comments regarding the tax treatment of payments to be made under the above-noted programs.
ENHANCED NISA PROGRAM: The regular NISA rules apply. By virtue of subsection 12(10.2) of the Income Tax Act, amounts paid out of Fund 2 are taxable as are amounts transferred from Fund 2 to Fund 1 (as amounts in the latter are available to the taxpayer with no tax consequences).
CROPS SECTOR COMPANION PROGRAM: This program provides financial protection to Saskatchewan producers who are participants in the NISA program in the event of reduced farm cash receipts for eligible crops for the 1995 and 1996 calender years. In our view, these payments are farm support payments, within the purview of section 234 of the Income Tax Regulations, and would have to be reported by the recipients either as income or a reduction of expenses or other costs, depending on the circumstances. Accordingly, it will be necessary to report these amounts on AGR-1 Slips.
AGRI-FOOD INNOVATION PROGRAM: This program is designed to support the development of emerging primary and value-added agriculture sectors by providing assistance for research, development and infrastructure needs. The major recipient of these funds will be the Agri-Food Innovation Fund which was established by provincial legislation, passed on March 31, 1995, and will be managed by a board with membership from the Federal and Provincial governments and Industry. Any payments made by the Fund to producers would have to be reported by the recipients either as income or a reduction of expenses or other costs, depending on the circumstances. Whether the Fund makes payments to producers or should the Program make payments directly to producers, it will be necessary to report these amounts on AGR-1 Slips.
We trust our comments will be of assistance to you.
Yours truly,
R. Albert
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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© Her Majesty the Queen in Right of Canada, 1996
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© Sa Majesté la Reine du Chef du Canada, 1996
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