Table of Contents


Bourque v. The Queen, 96 DTC 6412, [1996] 3 CTC 10 (FCA)

racing and horse raising one business

The maintenance of horses for racing by the taxpayer, and the racing itself, represented one business of the taxpayer, rather than two separate sources of business income as argued by him.

Levy v. The Queen, 90 DTC 6346, [1990] 2 CTC 83 (FCTD)

included breeding

In rejecting an argument that a syndicate of individuals were not engaged in "farming" because their primary operation was the breeding of horses rather than actually raising them, Rouleau, J. stated:

"The Court cannot attempt to distinguish and prorate racing, breeding, etc., and conclude that it does not constitute farming. Each of these activities are involved in 'maintaining race horses' or 'maintaining horses for racing'."

Pollon v. The Queen, 84 DTC 6139, [1984] CTC 131 (FCTD)

mechanized chicken farming

The hatching of eggs by mechanical means constituted "farming". Addy, J. stated: "Where the development of the basic food product still involves the growing process and natural biological changes as opposed to artificially manufactured foods or mere processing, I do not feel that, generally speaking, the activity would be considered by the general public anything other than agricultural in nature".

The enumeration of items is not an exhaustive definition of "farming".

Israel v. The Queen, 79 DTC 5418, [1979] CTC 468 (FCTD)

employee not engaged in farming business

Since the definition excludes employment under a person engaged in the business of farming, an individual cannot be said to be engaged in farming if all the relevant farming activities are carried out by a corporation of which he is employee, officer and shareholder.

McLaws v. The Queen, 76 DTC 6005, [1976] CTC 15 (FCTD)

"The breeding and keeping of horses for racing purposes falls squarely within the meaning of 'maintaining horses for racing' and therefore constitutes farming."

Juster v. The Queen, 74 DTC 6540, [1974] CTC 681 (FCA)

the farming definition lists tags that capture a broader range of operations than that specifically referenced

In finding that the "maintaining" of horses for racing included an operation where the care and training of the horses was contracted out to independent contractors, Jackett CJ stated (at p, 6541):

[T]he words “maintaining of horses for racing” were intended to apply not only to what is commonly thought of as the operation of a racing stable but also to the less pretentious business operations consisting of racing horses in circumstances where the businessman does not have his own stable and pasture premises and staff of “boys” and trainers but contracts out the actual care and training of the horses. This would seem to follow from the context of the definition where expressions such as ‘“tillage of the soil”, “raising of poultry” and ‘the keeping of bees” are obviously used, in each case, to refer to the whole gamut of operations constituting the particular class of business succinctly described by the words commonly used to describe it. …

What was being done throughout the definition of “farming” was the adoption of short “tags” to indicate different types of operations.

Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Federal - Official Languages Act - Section 13 26
Tax Topics - Statutory Interpretation - Interpretation/Definition Provisions tags captured a broader range of operations than those specifically referenced 192

The Queen v. Kuhl, 74 DTC 6024, [1973] CTC 846 (FCTD)

Services fees received by two brothers from a corporation that was controlled by them and engaged in growing potatoes, was income from a farming business rather than employment income. In addition to there being no employment contracts between them and their company, "their work was not supervised nor their hours controlled in any way by the company, but, on the contrary, it was they who controlled and directed the operations of the company.

See Also

Serres Toundra Inc. v. Agence du revenu du Québec, 2023 QCCQ 10441

a greenhouse operation is farming, not manufacturing or processing

The Quebec manufacturing and processing credits claimed by the taxpayer in connection with equipment acquired for use by it in its greenhouse cucumber-growing operation turned on whether such equipment was Class 29 property. A Quebec regulation (similar to the exclusion in (a) of the ITA definition in s. 125.1(3) of “manufacturing or processing”) excluded “farming” from “manufacturing or processing.” In finding that the greenhouse operation was farming, so that the exclusion applied, Vaillant JCQ stated (at paras. 34-35, TaxInterpretations translation):

Greenhouse cucumber growing at Serres Toundra requires the same elements as those needed for cultivation in home gardens or farmers' fields: soil, water, light, heat and fertilizers.

It is true that, thanks to technological advances, the soil in which cucumber plants are grown is made up of a food-grade mineral fibre substrate instead of soil. However, this substrate is only a substitute. It plays the same role as soil, i.e., it hosts the roots of the plant which, clinging to the substrate, receive the water and nutrients necessary for the growth of the plant and its fruit.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 125.1 - Subsection 125.1(3) - Manufacturing or Processing - Paragraph (a) greenhouse cucumber operation was farming 128

Coop de travailleurs en serres Belle-de-Jour v. Agence du revenu du Québec, 2019 QCCQ 6609

use of greenhouses to further grow flowers before use in making floral arrangements did not constitute farming

The taxpayer used approximately 20% of the area within greenhouses to grow cucumbers or other vegetables, or flowers, from seed for sale as grocery items or as little plants that could be transplanted. The taxpayer also annually produced about 85,000 floral arrangements in pots, which it sold to retailers such as Costco. To this end, it purchased already-grown flowers from other growers, and maintained them in its greenhouses pending its use of them for incorporation into the floral arrangements. In finding that that the floral-arranging activity was a separate business rather than being part of the taxpayer’s (greenhouse) farming business, Gibbens JCQ stated (at para. 68, TaxInterpretations translation):

Nothing otherwise suggests that the two activities were dependent one on the other. In particular, the floral arrangements were manufactured exclusively from already-grown plants that had been purchased by the Coop from third-party suppliers and not from flowers that the Coop had grown for sale as small plants to be transplanted.

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 29 greenhouse heating equipment was used in non-farming manufacturing of floral arrangements 414
Tax Topics - Income Tax Act - Section 4 - Subsection 4(1) - Paragraph 4(1)(a) use of greenhouses to further grow flowers before use in making floral arrangements was separate from the taxpayer’s greenhouse plant-growing farming business 221

Crichton v. The Queen, 2013 DTC 1104 [at 566], 2013 TCC 96 (Informal Procedure)

The taxpayer ran an amusement business in which ponies were harnessed on spokes so that they would move about an axis - essentially a merry-go-round with live animals instead of wooden ones. Bocock J found that s. 31 did not apply, rejecting the Minister's contention the taxpayer was "livestock raising or exhibiting" under the s. 248(1) definition of "farming." He stated (at para. 8):

With respect, 100 years ago such an assertion would have engaged every bakery, dairy, construction company or other business, requiring animal power to "drive" its enterprise, in farming. ... [The taxpayer's] method of "pony propulsion" may be anachronistic and archaic, but factually it is simply that. It is not farming.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 31 - Subsection 31(1) 115

Desrosiers Estate v. The Queen, 2001 DTC 37 (TCC)

woodlot was a farming business

In concluding that the taxpayer was operating wood lots as a farming business rather than a logging operation, Dussault TCJ found on the evidence that the main focus of the activities was not lumbering or logging but, rather, the planting, nurturing and harvesting of trees pursuant to a forestry management plan. In particular, cutting work was not the main activity.

LeBlanc v. MNR, 93 DTC 1564, [1993] 2 CTC 3054 (TCC)

Activities carried out in a vineyard consisting of the preparation of the soil, the planting of the vines, the growing of the grapes, and their ultimate harvesting, were "farming".

Partington v. MNR, 91 DTC 347 (TCC)

The taxpayer, who bred dogs to be sold as pets and operated a kennel was found not to be engaged in farming.

Administrative Policy

S4-F11-C1 - Meaning of Farming and Farming Business

Non-listed examples

1.5 In addition to the activities described in the definition of farming in subsection 248(1), farming can also include:

  • engaging in an aquaculture operation;
  • operating a woodlot;
  • planting, growing, and harvesting Christmas trees;
  • operating a nursery or greenhouse;
  • growing tobacco or medicinal marijuana, but not the manufacturing or processing associated with these crops;
  • operating a chick hatchery;
  • operating a maple sugar bush, which may include extracting and collecting maple sap;
  • producing peat moss; or
  • cultivating crops in water and hydroponics.


1.9 Farming may include raising fish or shellfish in water, if they are stocked and harvested in a controlled environment. ... Generally, the greater the extent of the activity, and the more sophisticated or organized the methods employed, the more likely the activity is farming rather than fishing.

Operation of a woodlot

1.11 ... If the business’ main focus is planting, nurturing, and harvesting trees under a forest management or similar resource plan (in other words, managing the growth, health, quality and make-up of the woodlot), it may be a farming business. ...

Excluded activitites

1.13 Farming does not include:

  • raising or exhibiting wild or exotic animals (for example, operating a zoo by raising and exhibiting lions, tigers, apes, or elephants);
  • producing methane gas from hog waste, or producing electricity from methane gas;
  • raising or breeding of animals, fish, insects, or any other living thing, for use or sale as pets;...
  • providing agricultural monitoring or consulting services to farmers to help with any part of farm management;...
  • renting out or leasing farm property, for example to a sharecropper. ...
Words and Phrases

2 December 2015 External T.I. 2015-0619501E5 - Definition of farming

breeding pets not farming

Before concluding that the business of breeding parrots to be sold as pets would not be considered farming, CRA stated:

[B]reeding dogs or other types of animals for use/sale as pets does not normally constitute farming. For instance, in Partington v MNR, 91 DTC 347 and Sniderman v. MNR, 89 DTC 232, the Tax Court found in both instances that the business activities relating to the raising and breeding of dogs as pets was not farming.

13 March 2015 External T.I. 2015-0564611E5 - Definition of farming

breeding of rodents as food but not as pets

Before concluding that "the raising or breeding of rodents could be considered 'farming' for purposes of the Act if the primary purpose for such activity is to supply a food source, whether that food source is for animal consumption or human consumption ….[but] the raising or breeding of rodents or other animals to be sold for use as pets would not be considered as farming," CRA noted that

in Sniderman v. MNR, 89 DTC 232, the Tax Court stated that livestock "are domestic animals such as cattle and pigs, bred or kept on a farm for use and commercial profit"

and that it now construes "livestock" more narrowly than as stated in IT-427R.

26 June 2014 External T.I. 2014-0523871E5 F - Revenu d'entreprise agricole

legume germination production as farming

Legume germination production was added to the activities of an already operating vegetable farm. CRA stated that “the legume germination production can be a farming activity that is integrated into the activities of a vegetable farm.”

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(10.2) government contributions and accrued interest in AgriInvest and Agri-Québec accounts are taxable when withdrawn 156
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(p) withdrawals from the AgriStability account are taxable as farm business income 175

12 June 2014 External T.I. 2014-0527651E5 - Whether keeping a zoo is a farming activity

zoo not farming

In finding that zoo keeping is not farming, CRA stated:

The business of operating a zoo is not, in our view, part of the common, ordinary or generally accepted meaning of farming. To qualify as farming under the Act, it must therefore fall within one of the listed activities in that definition, "livestock raising or exhibiting" being the only potentially relevant one. ...

The GST/HST list [in NM Chapter 4.4] of livestock accords well both with judicial interpretations and common definitions of the word. … Therefore, where a taxpayer raises or exhibits wild or exotic animals such as lions, tigers, apes, or elephants, these types of animals would not, in our view, be considered as livestock… .

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 8 zoo animals 50

7 May 2014 Internal T.I. 2014-0528251I7 - Surface Rentals for Wind Farms

wind farm not a farm

Would income received by a farmer for the rental of land to a wind farm developer for the purpose of constructing and operating a wind farm be properly included in farming income. CRA stated that "generating electricity from a 'wind farm' does not meet the definition of "farming" in subsection 248(1)," and went on to note that "whether or not the income from… the other activities can be included in the taxpayer's farming income generally depends on whether the other activities are considered to be incidental to the taxpayer's farming operations, or are, in fact, a separate business."

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 4 - Subsection 4(1) - Paragraph 4(1)(a) wind farm rentals as incidental to farming business 157

10 April 2014 Internal T.I. 2014-0522091I7 - Whether aquaculture is farming under the Act

aquaculture as farming

After stating that "growing fish or shellfish in water is normally farming where those are stocked, raised and harvested in a controlled environment," CRA went on to note that:

activities after the fish have matured such as gutting, cleaning, freezing, packaging and storing— are normally considered processing activities, not farming.

25 October 2013 External T.I. 2013-0491141E5 F - Sens d'« agriculture » - Meaning of « farming »

assistance of consultant not included in farming

In response to a query on agronomic monitoring, CRA stated:

[T]he definition of "farming" … does not include the situation where an individual is limited to advising and assisting the farming activities in all their farm management aspects and, for so doing, receives fees.

Consequently ... agronomic monitoring is not a farming activity ... .

22 November 2013 External T.I. 2013-0510711E5 - Is growing marijuana farming?

A taxpayer's legal growing and drying of marijuana likely constituted "farming," based on the breadth of the definition in s. 248(1). CRA stated:

[F]arming generally does not include the processing of harvested agricultural products unless the processing activities are incidental to the main farming activity of growing the products and are necessary to turn the harvested agricultural products into saleable products. The expression "incidental" implies a subordinate relationship or "having a minor role in relation to". Factors to be considered include the quantum of value added by the processing activity, the capital and labour invested in each activity, and the integration of the various activities into one farming business.

For example, the Tax Court has previously found that processing activities, namely, drying tobacco and winemaking, were an integral part of a farming business.

19 November 2013 External T.I. 2013-0510351E5 - Steel Tanks and Oak Barrels of a Winery Business

wine fermentation not farming

The taxpayer in 2013-0503311E5 carried on a wine-making business that involved both farming activities (i.e., growing grapes) and non-farming activities (i.e., producing wine for sale). Its fermentation tanks and barrels were considered to likely qualify for class 29 purposes as property used primarily in the manufacturing or processing of goods for sale. In clarifying that the exclusion in Reg. 1104(9)(a) of "farming" from "manufacturing or processing" did not apply, CRA stated:

[A] farmer or a farming corporation may carry on activities that, if carried on by another person, would be considered to be processing of farm products rather than farming. Some examples are: aging of cheese, plucking of chickens, cleaning, polishing and treating of beans, or cleaning sorting, grading and spraying of eggs. …[F]arming does not include the manufacturing or processing of agricultural products unless such activities are incidental to the farming activity. …[G]enerally where a farmer or farming corporation separates the activities of farming and the processing of farm products, the CRA will essentially consider the processing activity to be a distinct business from that of farming provided that there is a clear delineation of the income from each business activity, and that the income from the processing business is properly calculated and is not eligible for any of the special sections in the Act dealing with income from a farming business (such as the cash method of computing income in section 28…).

4 November 2011 Internal T.I. 2011-0413341I7 F - Bien agricole admissible

nursery qualifies as farming if focused on growing rather than selling

The taxpayer acquired farmland and rented 50% of it to an unrelated farm producer and 50% to a corporation that operated a nursery there and whose shareholders were him, his children and some of his brothers. During that time, the income from the nursery was his principal source of income. Did the farmland qualify as qualified farm property? CRA responded:

Generally, we are of the view that the activities of a nursery can constitute farming if, in fact, it can be shown that those activities involve the cultivation and growth of plants, shrubs or trees and not just buying and selling those products.

6 October 2008 External T.I. 2008-0271421E5 F - Terres à bois-plan d'aménagement forestier Québec

woodlot, to be a farm, must focus on the fostering of the stand

Before describing the requirements for a rollover under s. 73(3) (or 70(9), CRA noted the distinction in IT-373R2, para. 14 (approved in Desrosiers Estate) between a woodlot operation that was a farm (entailing “planting, nurturing and harvesting trees pursuant to a forestry management … plan and significant attention … paid to manage the growth, health, quality and composition of the stands”) and a logging operation, and that if the correspondent’s statement that “the land was used principally in a logging business” was correct, then the rollover would not be available.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 73 - Subsection 73(3) - Paragraph 73(3)(c) Quebec regional agencies’ plans for forest management plans would generally satisfy s. 73(3)(c), whose “engaged” requirement would be met if such plans did not require work 257
Tax Topics - Income Tax Act - Section 70 - Subsection 70(9) - Paragraph 70(9)(a) “engaged” requirement in s. 70(9)(a) is satisfied to extent the forest management plan requires no action 110

16 November 2006 External T.I. 2006-0198811E5 F - Article 28 - Entreprise agricole

hatchery is farming because the product is produced by “natural biological growth and change”

In finding that the operation of an egg hatchery (in which the taxpayer purchased eggs from various producers and, after an artificial incubation period of 11 days, resold the eggs) constituted farming, so that the operator could use the cash method under s/ 28 if the operation also constituted a business, CRA stated:

[W]here the CRA seeks to determine whether a particular activity constitutes farming, it is necessary to assess the final product marketed by the taxpayer. If the taxpayer markets a product that is the result of natural biological growth and change, the CRA will tend to conclude that the activity in question is farming. …

Pollon determined that such [hatchery] activity did constitute farming for the purposes of the Act.

Words and Phrases

15 March 2004 Internal T.I. 2004-0058591I7 F - Projet agricole au sens de 122.3(1)b)(i)(B)

foreign woodlot operation was farming

On the basis of additional information, the Directorate concluded that foreign woodlots on which employees performed work constituted farms within the meaning of IT-373R2, para. 14, so that there was an "agricultural activity" within the meaning of s. 122.3(1)(b)(i)(B).

10 April 2003 External T.I. 2002-0152065 F - DEFINITION D'AGRICULTURE

veterinary practice of providing medicine to livestock was not “farming”
Also released under document number 2002-01520650.

A veterinarian practising exclusively with farmers in his region then sells his goodwill, mainly related to the sale of medicine to his farmer clients. In finding that the goodwill was not a qualified farm property, CCRA stated that “’farming’ … does not include the situation where an individual is limited to maintaining and caring for farm animals that the individual does not own and receives a fee for doing so. This is reflected, inter alia, in Juster … .”

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Farm or Fishing Property goodwill of veterinary practice of servicing farmers did not constitute “qualified farm property” 99

11 March 2003 Internal T.I. 2003-0000087 F - Projet agricole au sens de 122.3(1)b)(i)(B)

woodlot management can be farming
Also released under document number 2003-00000870.

The Directorate treated the question of whether felling, bucking and limbing operations constituted an "agricultural activity" for the purposes of s. 122.3(1)(b)(i)(B) as being informed by whether it was “farming,” and in this regard noted the decision in Desrosiers finding that as the main focus of the activities at a woodlot was not lumbering or logging but, rather, the planting, nurturing and harvesting of trees pursuant to a forestry management plan, it constituted farming, and noted the similar approach in IT-497R3.

19 February 2002 External T.I. 2002-010649

preparatory tilling/worms

A limited partnership that was created for the purpose primarily of working land so that it would eventually be certified as an organic farm by a certifying body would not be considered to be engaged in farming given that tillage involves plowing, sowing and raising crops. However, "raising worms may qualify as farming provided that the worms are kept by a taxpayer and are maintained and bred under controlled conditions for profit and provided further that the activities in relation thereto are substantial and extensive."

31 May 1994 External T.I. 9406165 - FARMING BUSINESS

grain drying

"... The activity carried out after the crops have been harvested by farmers (not the taxpayer's own crops) and taken to the grain drying facility of the taxpayer would not qualify as a farming activity since it does not meet the above-mentioned requirements. It follows that the custom grain drying business would not, in such a situation, be considered a farming business."

2 December 1992 T.I. [raising horses]

raising horses

The activity of raising, training and exercising a horse in order that it may compete as a show jumper can be considered as "farming".

22 June 1992 T.I. 921022 [ostrich farm]

ostrich farm

The raising of ostriches for breeding purposes or for the production of eggs or food products likely constitutes farming.

22 January 1992 T.I. (Tax Window, No. 15, p. 23, ¶1709)

Hydroponics can meet the definition of farming.

11 June 1991 T.I. (Tax Window, No. 4, p. 11, ¶1296)

Activities relating to the raising of fish may be considered "farming" when fish are stocked, raised and harvested in a controlled environment such as a pond owned by the farmer. Whether processing activities are part of the farming business or a separate business is a question of fact.