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The Agricultural update is a semi-annual newsletter that provides insights to help you manage the financial aspects of your farm operation.
In this edition of the newsletter, you'll find insights on:
- new tax rules that could impact family farm corporations
- pros and cons of forward grain contracts
- changes to eligibility for funding with the Environmental Sustainability and Climate Change programs of the Canadian Agriculture Partnership
- upcoming tax and agriculture funding program deadline
New tax rules could impact family farm corporations
The rules surrounding the taxation of private corporations are changing—and these changes could dramatically impact your farm or agribusiness. If you’ve traditionally relied on income splitting as a key component of your tax planning strategy, it’s important to familiarize yourself with the Department of Finance’s latest changes, so you can take the necessary steps to minimize your tax burden.
In this article, we outline the government’s proposed tax rules and provide an overview of changes to the income splitting/sprinkling rule, including its related exceptions and exclusions. We also walk you through a tangible example of how the change could potentially affect a family farm, and explain what the “transitional provisions” really mean.
Forward grain contracts: Pros and cons
A rising number of Canadian farms are starting to use forward grain contracts to minimize risk, increase returns and bring some stability to an often-volatile market. But while these contracts can deliver considerable benefits, they also come with some drawbacks as well. This article explores how a forward grain contract works and outlines both its risks and rewards, allowing you to approach it with your eyes open.