Ongoing consultation over the last two years between Canada Customs and Revenue Agency, Agriculture and Agri-Food Canada, and your association have resulted in an agreement whereby producers will now be able to obtain tax benefits on Checkoff amounts that are used to support Research and Development.

The portion of the Checkoff amount that is used to support R&D is now eligible to earn Investment Tax Credit at a rate of 20% for individuals and 35% for corporate producers that are Canadian controlled private corporations. (CCPC)

For the Manitoba Canola Growers Association only part of our R&D qualifies for the tax credit. This is because research that is not done by an approved research facility does not qualify. This means the Universities and the Government Agricultural research facilities are approved but the Canola Productions Center are not. Therefore only 27% of our research qualifies for the tax credit in 2001 and 22% in 2002.

The following is an example of what a producer could claim using 2001 percentage (27%).

This producer over the year has contributed into the checkoff $200. That means $200 at 27%= $54. Remember that only 27% of MCGA research qualifies for the tax credit. That means $54 is eligible to earn Investment Tax Credit.

• For individual producers $54 at 20% rate = $10.80.
  Thus a producer would be able to claim $10.80.
• For corporate producers $54 at 35% rate = $18.90
  Thus a corporation would be able to claim $18.90

The investment tax credits earned maybe used as follows:

• Offset federal tax 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 tax;
• Carried back up to 3 year to reduce federal tax paid in those years;

As the eligibility is retroactive to January 1 2001, a request to adjust your 2001 Income tax return will 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 Carman at 204-745-2178.