3AL Presentation by the Ontario Federation of Agriculture: Food – Where are we headed?
1. What percentage of farmers own their land ‘debt free’, and what is the average debt level for a typical farmer?
The total farm debt in Ontario is $25.2 billion, excluding household debt such as student loans and car payments (CANSIM 002-0008, Statistics Canada, 2016). If you divided the total debt by the number of farms (49,600), that would be over half a million per farm ($507,384). Additional interesting stats and national comparisons can be found here: https://www.fcc-fac.ca/content/dam/fcc/knowledge/ag-economist/farm-assets-and-debt-report-2017-18-e.pdf
2. How unequal are farm sizes? For example, what percent of value (of crops) is produced by 5% of farms? Is this sector dominated by big business?
Total farm cash receipts in Ontario was 15.1 B (CANSIM 004-0233, Census of Agriculture 2016)
3. Preservation of Agricultural Lands Society (PALS) has fought for 40 years to preserve Niagara food lands. How effective have they been?
Information about PALS can be found on their website, which also outlines their accomplishments: http://members.becon.org/~pals/AboutPals.html
4. Regarding succession: If my farm is no longer my primary residence, can OFA lobby for it not to be susceptible to capital gains?
Assuming you are referring to the on-farm residence (and not the active farmland), the on-farm residence will be exempt from tax, up to its value when you moved out of the house.
Say, for example, when you moved out of the on-farm residence, the house was valued at $500,000. The first $500,000 you receive when you sell the farm residence will be exempt. So, if you sell it for $600,000, the first $500,000 is exempt from tax (as your principal residence). The next $100,000 is subject to capital gains, of which 50% is excluded from tax. So, in this example, $50,000 would be included in your income and taxed at your marginal tax rate.
In order for OFA to lobby for a change to the Income Tax Act, you would send a resolution to the local County Federation and it could then be sent to the OFA Board of Directors for discussion.
5. Are farmers subject to the same tax structure as self-employed individuals?
Generally, yes. With some exceptions, the most notable that comes to mind is that farmers have the choice of filing their taxes on the accrual or cash basis. While “regular” self-employed individuals can only file on the accrual basis.
For additional inquiries, please reach out to Danielle Collins: firstname.lastname@example.org.