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.
MINISTER/DEPUTY MINISTER'S OFFICE 96-00599M
ADM'S OFFICE
RETURN TO 15TH FLOOR, ALBION TOWER
April 11, 1996
XXXXXXXXXX
Dear XXXXXXXXXX:
I am replying to your letter of January 18, 1996, addressed to the Honourable David Anderson, former Minister of National Revenue, concerning the Western Grain Transition Payments Program.
I regret that you experienced difficulty in obtaining information about the payment program from departmental officials. I should mention that the Department of Agriculture and Agri-Food is responsible for the administration of the program and Revenue Canada's role is limited to the taxation of these payments. I have noted that Mr. Goodale has responded to your questions regarding the administration of the program, therefore, I will limit my comments to the taxation of the payments.
In a situation where a landowner farms land that is eligible for the western grain transitions payment, the landowner may apply to the Department of Agriculture and Agri-Food for payment. If the application is accepted, the adjusted cost base of the land is reduced by the amount of the payment received. The reduction in the adjusted cost base of the land, resulting from the receipt of the payment in 1996, could give rise to increased capital gains in the year of the sale of the land. However, the actual receipt of the payment in 1996 would not be considered as income.
When the land is leased, the landowner who applies for the payment must reach an equitable agreement to share the payment with the lessee. When a portion of the payment received by the landowner is given the lessee, the lessee must report it as business income. For the landowner, the portion of the payment given to the lessee is not considered a transition and it does not affect the landowner,s income.
I wish to thank you for bringing your concerns to the Department's attention.
Yours sincerely,
Pierre Gravelle, Q.C.
c.c. Mr. Raymond Protti
Deputy Minister
Department of Agriculture and Agri-Food
A.M. Brake
957-2133
February 29, 1996
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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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