Team Alberta is warning the federal government of serious financial consequences to farmers if they lose Vdeferred cash tickets to manage wide variations in their income.

The measure was contained in the Liberals 2017 Budget.

Team Alberta has told the federal finance department’s consultation process how important the deferral process is for farmers in their business planning strategies and tax management.

According to a statement leased by Team Alberta:

“We believe that the government has overlooked the severe impact that farmers would face if this tool was no longer available,” said Kevin Auch, Alberta Wheat Commission Chair. “Farmers operate with a high degree of income volatility due to factors beyond our control and the cash ticket deferral mechanism allows us to manage risk and balance our income to ensure we can still remain profitable.”

The government says the cash ticket deferral is out-dated since the single desk was dismantled in 2012. But Team Alberta points out farmers are exposed to the same income volatility regardless of the Canadian Wheat Board’s status.

Data from the Western Grain Elevator Association (WGEA) indicates that the percentage of cash tickets deferred annually has remained fairly stable throughout and following the end of the CWB’s monopoly.

Team Alberta further points out that removing this management tool could hamper Canada’s ability to increase agri-food exports from $55 to 75 billion per year by 2025 as outlined in the recent federal budget.

“Canada’s agriculture industry is poised and ready to meet these targets,” said Jason Lenz, Alberta Barley Chair. “But we will only be able to meet them if the government works with farmers to eliminate barriers that impede growth.”

Team Alberta’s submission provides examples from accounting firm MNP LLP that demonstrate impact on farm businesses – whether partnerships, sole proprietors, or corporate family farms. The information from MNP shows that removal of the deferral option will have a disproportionate and negative impact on farm operations relative to non-farm Canadian businesses of similar sizes.

“The existing policy allowing for deferral of cash tickets is an important tool in ensuring that farm operations, whatever their business structure, are treated fairly relative to other Canadian businesses,” said Greg Sears, Alberta Canola Chair.

D’Arcy Hilgartner, Alberta Pulse Growers Chair said: “We have a responsibility as a country to ensure that our farmers remain profitable and sustainable. The consequences of this proposed policy change would be dire for many Canadian farmers and severely limit the sector’s ability to meet growth objectives.”