Investment Tax Credits Available to Canola Growers

Producers are entitled to obtain taxable benefits on canola check-off deductions that are used to support Research & Development.

Individual producers are entitled to claim investment tax credits at 20% and the corporate producer rate for Canadian Controlled Private Corporations (CCPC) is 35%.

For the Manitoba Canola Growers Association, only part of our R & D qualifies for the tax credits. This is because research that is not done by an approved research facility does not qualify. Universities and the government agricultural research facilities are considered approved facilities. Each year, MCGA meets with the approved facilities to suggest crop concerns that Manitoba canola growers are or could potentially be facing. For 2004, 23% of MCGA’s research funding will qualify. The 2003 rate is 36%, the 2002 rate is 22% and the 2001 is 27%.

The following is an example of what a producer could claim:

In 2004, a producer has contributed $200 to the canola check-off program. That means that $46 of these check-off dollars was invested into eligible R & D ($200 at 36%).

• Individual producers would be entitled to claim $9.20 as their investment tax credit amount ($46 at 20%).
• Corporate producers would be entitled to claim $16.10 as their investment tax credit amount ($46 at 35%).

The investment tax credits earned maybe used as follows:

• Offset federal taxes owing in the current year;
• If no taxes are owing, a portion may be refunded to you in the year if you are an individual or all of the credit may be refunded if you are a corporation;
• Carried forward up to 10 years to offset federal taxes;
• Carried back up to 3 years to reduce federal tax paid in those years.

As the eligibility is retroactive to January 1, 2001, a request to adjust your 2001 and/or 2003 income tax return(s) would be required. Please talk to your accountant on this matter.

Manitoba Canola Growers Association is a non-profit organization made up of approximately 10,000 producers who share the goal to develop and promote the development and marketing of Manitoba grown canola.

For further information please contact MCGA’s office in Winnipeg at (204)982-2120.