national farmers union

"Canadas tax system takes more than it should from farm families," says Shannon Storey, Womens President of the National Farmers Union.

Speaking at the close of a consultation with leaders of five groups representing Canadas farm women, Storey and other participants agreed about problems with tax deductions and CPP.

"Women who do unpaid farm work are penalized in the pension plan," says Carolyn Van Dine of the Canadian Farm Womens Network. "Theres no mechanism for them to get a pension that recognizes their work in support of the family farm once theyve retired from farming."

Irene Marais of the Reseau des Entreprises Familiales adds, "Womens work in family businesses is not respected. We need to be treated as professionals by tax and pension systems."

The five leaders have recommended a number of changes which will benefit not only farm families but also other families in Canadian society. These include:

• raising personal exemptions and spousal exemptions to $15,000 each, and incorporating an increased spousal exemption of up to $30,000 if that spouse engages in unpaid work in support of the family farm or business.
• making the child care deduction transferable to the higher-income spouse if one spouse has no taxable income as a result of farm or other business losses.
• allowing the child care deduction in cases where a relative other than the childs parent or guardian is paid for looking after the child.
• permitting wages paid to domestic workers as an allowable business expense, treating them in the same way that wages paid to other employees of the farm or other family businesses.
• permitting deduction of all expenses related to care and supervision of care given to elderly, disabled and ill relatives and friends.
• permitting deduction of all medical and mental-health related expenses, including travel expenses, and fully accepting a family doctors referral and a record of appointments as full proof that such expenses were incurred and necessary; in addition, permitting deduction of some less-traditional health maintenance expenses such as un-prescribed chiropractic and massage therapy.
• creating a mechanism to equalize pension contributions between paid and unpaid spouses on a family farm or in another family business, and to permit unpaid spouses or their paid spouses to contribute to the Canada Pension Plan on their behalf..

Most importantly for farmers, Revenue Canada needs to broaden their definition of "farmer" to include the many farmers, men and women, who earn substantial amounts of off-farm income which is absolutely necessary to the survival of the family farm. At the moment, some farmers can be penalized by Revenue Canada if their off-farm work brings in more money than on-farm work, thanks to the low prices paid for farm production and the high prices charged for farm inputs. So-called "hobby farmers" cannot deduct the full value of necessary farm expenses from their income tax claim, and cases are emerging in which bona fide farmers have to engage in expensive court challenges because their status as farmers is being denied by Revenue Canada.

Andy Mitchell, the federal Minister of State for Rural Development, has agreed to present the five farm leaders recommendations to Minister of Finance Paul Martin.