CB Blog

CB Blog

October 10, 2018 by Kyle Martin

Reviewing the pros and cons of AgriStability

AgriStability is a program that provides financial protection to farmers in the event that their margin drops compared to the prior year of production. In essence, this is a financial safety net for farmers: they receive payments when their net income drops below 70 per cent of their reference margin, which is determined by averaging their net income over five years after eliminating the highest and lowest years. In many cases, the benefits of the program are worth the time and expense required to participate, but earlier this year, changes were introduced that may affect the program’s relevance to your farm operation. With that mind, here is a closer look at the pros and cons of AgriStability.

September 12, 2018 by Rosa Maria Iuliano

How to remain compliant when not acting at arm’s length

For tax purposes, the Canadian Revenue Agency requires businesses to complete all transactions at fair market value, but some businesses find themselves making special arrangements with family, friends or others. By not acting at arm’s length, they may wind up with understated revenue, overstated expenses and/or unrecorded tax liabilities. Any error in this area is subject to reassessment, which can be an extremely expensive process.

August 15, 2018 by Carl Hooper

6 key considerations when purchasing a dental practice

In recent years, there has been a surge in the buying and selling of dental practices. The inherent goodwill of a practice, the move towards regional and national consolidation and the availability of 100 per cent financing make the decision to buy that much more attractive. In addition, a high percentage of dentists are approaching retirement and looking to monetize their well-established practice, making investing in an existing practice a viable option for new dentists. With so much riding on this investment, the decision to purchase a practice can be overwhelming. To simplify the process, dentists should focus on these six key issues.

July 18, 2018 by Janet Foster

Every strong business starts with a strong transition

For anyone making the transition to self-employment, deciding whether to incorporate is a major decision. From a tax perspective, you should generally start thinking about incorporating when you have substantial funds that will be reinvested in the business annually and not need to be drawn out for personal use. A corporation enjoys lower tax rates for funds left inside the corporation. While some try to determine what level of income justifies incorporation, viable cases can be made for and against, whether your net income is $75,000 or $200,000. Sometimes people think there’s a magic number, but there really isn’t. This is a personal decision that has a unique impact on every business.  

July 12, 2018 by Leanne Alexander

8 questions to ask when buying or selling farmland

If you make the decision to buy or sell farmland without first talking to an advisor, you are likely to find yourself in a predicament that can be difficult (and costly) to resolve. With that in mind, never sign off on a deal without first sharing the particulars of your situation with an expert. The advice you receive will help in the strategic structuring of your business, which can go a long way toward minimizing your future tax obligations and put you in a better financial position moving forward. But before you meet with an advisor, here is an overview of the key questions you should keep in mind when buying or selling farmland.

June 19, 2018 by Kathy Byvelds

Farmers in a loss position: consider your options

If you’re a farmer using the cash method to report income and claim expenses, you have flexibility in determining your taxable income on a year-to-year basis. For example, if you hold off on selling crop inventory, you can reduce your income in that year because you only have to record income when it is cashed in. In most cases, it is beneficial for farmers to estimate their cash income before the end of their tax year, as this allows them to plan for their taxes. 

May 16, 2018 by Kari Viglasky

Modern leadership qualities you need to succeed

There’s a war for talent all over the world. Baby Boomers are rapidly retiring, and we have a severe labour shortage in Canada. As a result, the new generation of younger employees is becoming more and more empowered. They can decide where they work, when they work, how long they work, what they wear to work and how much you pay them to work.

May 7, 2018 by Luc Joye

Transferring farm property from partnerships to individuals

Inter-generational farm transfers are common as succession plans. When parents transfer farms to their kids, they have rights that other business owners do not have. For example, if a farm or fishing property meets the criteria for a favourable intergenerational transfer, they can transfer at less than fair market value. However, many farming operations function as unincorporated partnerships, which can lead to complications. Typically, this is a mom and dad type scenario, where both parties are individuals farming multiple pieces of land, and they want to transfer one piece to the next generation.

April 27, 2018 by Michael Brown, Sheldon Taylor

The tax implications of cryptocurrency

Although cryptocurrencies have existed since Bitcoin emerged in 2009, this medium of exchange has experienced a massive surge in popularity in recent months. Offering a wide range of opportunities (and risks), cryptocurrencies have inspired a great deal of confusion due to their unique properties.

March 12, 2018 by John Oakey

Taking action on passive investment rules

If you listened closely on budget day, you could hear a sigh of relief across Canada after the federal government announced new rules on passive investment income. Largely considered a fair improvement from previous iterations of the rules, many tax practitioners welcomed the changes. However, not all were pleased. And some were far from relieved.

February 23, 2018 by John Oakey

Finance forecast: 6 areas to watch in Budget 2018

For comprehensive post-budget analysis delivered directly to your inbox, sign up here.

Minister of Finance Bill Morneau has announced the 2018 federal budget will be tabled Feb. 27, 2018. Last year’s budget was delivered with a projected deficit of $28.5 billion and focused on several key areas, including skills development, innovation and middle-class jobs, among others. While the government is usually tight-lipped on the precise content of the budget, this year’s pre-budget report prepared by the House of Commons Standing Committee on Finance provides some indication on the government’s considerations.

February 12, 2018 by Ryan Kitchen

Take advantage of AMT opportunities, farmers!

Most people in the farm industry know they can sell qualifying farm property as a sole proprietor or partnership and use their lifetime capital gains exemption to avoid paying tax on the sale. However, many are unaware of the fact that there is a second calculation called the Alternative Minimum Tax (AMT).

January 31, 2018 by Peter Hobb

How to avoid conflict in a family business

Running a business involves many moving parts, which makes conflict unavoidable. However, the conflict within a family-owned business is more complicated than conflict between non-related employees because the line between business and personal relationships is blurred. There is a deeper connection between family members, which can bring heightened emotion to disagreements and conflict. When dealing with discord in a family business, the resolution needs to consider both the potential impact on family relationships outside of the business and the potential impact on business performance. 

January 4, 2018 by Ryan Kitchen

The pros and cons of deferred grain income

When the federal budget was announced last March, many missed the announcement of a consultation program exploring whether or not the Canadian government should continue allowing farmers to defer grain income. Part of the government’s efforts to promote a fair tax system, this program gave everyone affected by this issue an opportunity to provide input. There are several credible arguments for and against deferred grain income, but these are the most widespread and persuasive positions.

January 4, 2018 by Bob Boser

Tax reporting has changed for principal residence sales

If you sell property, you are required to report the sale in your tax return. However, if the property you sell is your principal residence, the gain you realize on the sale is not taxable, as there is an exemption on the gain realized on a principal residence. In the past, Canada Revenue Agency’s administrative policy was that you did not have to include the sale in your tax return if the property was your principal residence for all years it was owned. This policy changed in 2016, and CRA now requires everyone to report the sale in their tax return. While the sale of a principal residence is still tax free, there is a penalty if you fail to report the sale.

December 29, 2017 by Mario Patenaude, Tammie M. Sorensen

Use evidence-based HR to grow your organization

Human resources managers tend to be most concerned with acquiring staff, the exit of workers from the organization, training and development, the administration of pay plans, benefits and other traditional HR issues. What this emphasis overlooks is the overall strategy of the business, and how effective an HR team can be at supporting or enabling that strategy.

December 6, 2017 by Christin Giebelhaus

3 key disclosure areas in your year-end financial statements

If you are a controller or CFO preparing your year-end financial statements for shareholders, regulators and lending institutions, there are several disclosure items you should carefully consider. Over the last several years, accounting and securities regulatory bodies have had a great deal to say about this subject. The following three areas are especially significant.

December 6, 2017 by Michael Barclay

Overcome succession challenges facing your family business

Canada's succession planning rules can make it less costly from a taxation standpoint to sell a family business to a third party than to a family member. However, this depends on how the deal is structured. Typically, when you transfer to a family member, there is some sort of discount and freeze on the shares. For instance, if parents take back preferential shares and the next generation buys common shares at a relatively nominal value, this turns the proceeds for parents into dividend income, as opposed to capital gains. 

November 28, 2017 by Thomas Blonde

9 issues to consider when incorporating your farm business

In a 2012 article, I summarized a few of the major planning items that need to be considered before and after incorporating a farm business. Over the last five years, some of these issues have changed and some have stayed the same. If you have consulted with your Collins Barrow adviser and decided incorporation is right for you, it is important to have an up-to-date understanding of these issues to ensure your corporation is set up correctly. This article offers a refresher on nine important aspects of incorporation, helping your business devise the most optimal tax strategy.

November 23, 2017 by Robert Fischer

How AgriInvest and AgriStability are changing

AgriInvest and AgriStability are two government subsidy programs that have been extremely valuable to Canadian farmers in recent years. AgriInvest allows farmers to put a percentage of their sales into a fund, where these contributions are matched by the government. The idea is to put money away in your best years, creating a cushion if you are ever short of cash or need extra funds to pay for equipment and supplies.