Farms, average operating revenues and expenses, by province

Farms, average operating revenues and expenses, by province
Definitions
 
The Taxation Data Program (TDP) estimates presented in these summary tables cover both unincorporated farms and communal farming organizations with gross operating revenues of $10,000 or more and incorporated farms with gross operating revenues of $25,000 or more. The unincorporated sector consists of individual taxfilers who reported positive gross farm income or non-zero net farm income on their Canada Revenue Agency (CRA) T1 General, Income Tax and Benefit Return. The incorporated sector consists of all corporations classified as engaging in farming activity (50% or more of their sales come from agricultural activities) that reported total sales of $25,000 and over on their CRA T2 Corporation, Income Tax Return. The communal farming organizations consist of all communal organizations that reported either positive gross farm income or non-zero net farm income on their CRA T3, Trust Income Tax and Information Return. Taxfilers who are considered non farmers in the TDP are excluded.
 
Capital cost allowance (CCA): A tax term for depreciation used to define the portion of the cost of the depreciable property, such as equipment and buildings, that is tax-deductible.
 
The capital cost allowance obtained from the income tax returns does not correspond to the economic depreciation. Capital cost allowance represents the expense written off by the taxfiler as allowed by tax regulations. The farmer may, after the calculation of the capital cost allowance, deduct any amount up to the maximum allowable. Depreciation represents the economic "wear and tear" expense, which can be very different from the amount farmers are allowed and decide to declare for tax purposes. The calculation of depreciation expenses for farm houses and other buildings are based on a rate of 2% and 5%, respectively, while farm machinery is based on a rate, variable by province, ranging between 9% and 17%. For tax data, capital cost allowance rates differ, reaching levels as high as 30% for certain farm machinery.
 
Net market income: Total operating revenues minus total operating expenses minus net program payments.
 
Net market income adjusted for CCA: Total operating revenues minus total operating expenses including capital cost allowance minus net program payments.
 
Net operating income: The profit or loss of the farm operation measured by total operating revenues minus total operating expenses, excluding capital cost allowance, the value of inventory adjustments and other adjustments for tax purposes. In these summary tables, net operating income is also equal to the sum of net market income and net program payments.
 
Net operating income adjusted for CCA: Net operating income minus capital cost allowance.
 
Net program payments: Program payments and insurance proceeds after deducting stabilization levies or fees (government levies).