BILL C-8 And BILL C-19 - Now Law

Bill C-8

• Finally passed on June 9, 2022
• A refundable carbon rebate for farming businesses in Ontario, Manitoba, Saskatchewan and Alberta. (Did you know the rebate is not equal to the carbon tax paid?)
• Rebate amount for 2021 is $1.47 per $1,000 of $25,000 or more of eligible farming expenses and $1.73 for 2022.
• Government has told farmers that carbon tax is revenue neutral. I don’t think so….
• How do you incentivize change in using alternative energy sources without having carbon tax as one of your biggest farm expenses?
• Talk to your tax professional for more details and filing form T2043 for 2021 if not done yet. (proprietorships/partnerships)
• For corporations, Schedule 63 may not correctly calculate the credit. Again, discuss this with your tax advisor.

Bill C-19

• Finally passed on June 23, 2022
• For corporations after April 18, 2021 and available for use before 2024 you can expense up to $1,500,000 per year of eligible capital property purchases.
• Capital property includes net additions of classes 8, 10, 12, 16 and NOT BUILDINGS.
• For sole proprietors and partnerships you can also expense eligible capital property ($1,500,000) acquired after December 31, 2021 and available for use before 2025.
• Plan your capital purchases…do not exceed $1,500,000 limit per year.
• Immediate expensing of capital assets can create a loss carry back/forward.
• Can elect to claim additional OPTIONAL INVENTORY in modifying taxable income.
• Consider converting leased equipment to purchased assets for 100% write offs.
• A down side to this if you sell or trade these assets in the future you could have RECAPTURE and possible TAXABLE gains depending on where equipment values are going.
• Please consult your tax professional for advice specific to your farming business.

I must admit I really like this incentive. Corporations might need to file an amended Schedule 8 if you qualified for purchases after April 18, 2021 and could not use this write off when you originally filed the corporate tax due to the late passing of the Bill C-19. Again, talk to your tax advisor about this.

Take care & YAHOOOO (Calgarians will understand)

I look forward to next week...

Fred Mertz
Fred@thevoiceofagriculture.ca