Farmers worry they might lose a long-time federal program that gives them some flexibility in their unpredictable industry.
The federal government wants feedback on the cash ticket deferral program that allows grain farmers to defer portions of their income to the following year in order to balance farm revenue to deal with poor weather and market fluctuations.
The deadline to provide feedback is May 24.
Red Deer County Mayor Jim Wood said losing the program would definitely hurt farmers.
“This will affect all farmers, whether they are grain or cattle, because cattle can be deferred as well. This will affect every single farmer in Red Deer County. This is huge,” said Wood, a local farmer.
“It allows the farmer to be paid when he would want to receive the money. That allows him to balance income, for tax purposes, to help with fluctuating years for various scenarios that can happen on the farm.”
He said the program is a way to cushion market and environmental changes.
“You take a year like last year, people were harvesting really late into the year, way different than normal.”
He said it allows for the delivery of grain at a time when the elevator can take it and prevents farmers from having to store their grain for longer periods which can impact quality.
“If this thing is changed it can cause major tax implications for farmers all at one time. I think it’s very unfair,” Wood said.
Chair of Alberta Barley Jason Lenz, who farms north of Sylvan Lake, said about 80 per cent of grain farmers participate in the program that is a valuable tool for their overall financial planning.
“It’s not a real tax advantage because you end up paying the same amount of tax anyway. It’s just this way your taxes are spread out more evenly. When you’re on tight margins like we are on the farm, that’s a number we like to have a pretty good handle on,” Lenz said.
“This year is a prime example of some of the weather challenges we have based on the fall we’ve had and spring so far. By having this cash ticket referral it really allows us to average our income over two years.”
He said Alberta Barley and other grain associations in the province have made their concerns known to government.
Farmers were surprised it was even an issue for the federal government, Lenz said.
“The net effect on the federal treasury, it looks to us like it would appear to be neutral. On the other side of the coin, it would have a big impact on farm businesses on a year to year basis.”
Farmers can send their feedback to government by e-mailing consultation_tax_2017@canada.ca.
szielinski@www.reddeeradvocate.com