AgriStability: Cash Reference Margin Pilot
Table of Contents
What is the Cash Reference Margin Pilot?
In December 2019, federal-provincial and territorial Ministers of Agriculture agreed to several improvements to AgriStability, including the launch of a two year cash reference margin pilot in select jurisdictions. Participants who file their taxes on the cash basis can join the pilot and have their reference margins calculated using the income and expense information they reported for tax purposes with no accrual adjustments.
Who is eligible for the pilot?
The provinces of Manitoba, Newfoundland and Labrador, and New Brunswick have agreed to implement the pilot for the 2020 and 2021 program years. The deadline to join for 2020 has passed, however you are eligible to participate for the 2021 program year if you farm in one of these provinces, file your taxes on the cash basis and participate in the AgriStability program.
What is the purpose of the pilot?
The pilot makes it easier for new and returning participants to apply for benefits by reducing the amount of historical information they need to provide. It is also meant to gauge existing producers’ interest in having their reference margins based on the cash versus accrual basis going forward.
Which program years are included in the pilot?
The 2020 and the 2021 program years are included in the pilot. However, the deadline to join the pilot for the 2020 program year has passed.
How do I join the pilot?
To join the pilot for the 2021 program year, complete and submit an AgriStability Cash Reference Margin 2021 Consent Form by March 31, 2022.
What is the deadline to join the pilot?
The deadline to join the pilot for the 2020 program year has passed. The deadline to join the pilot for the 2021 program year is March 31, 2022.
If I joined the pilot for 2020, can I opt out of the pilot for 2021?
If you joined the pilot for the 2020 program year, you must remain in the pilot for the 2021 program year if you enrol in AgriStability for 2021. You cannot change back to an accrual reference margin in either year. This will ensure Agriculture and Agri-Food Canada (AAFC) has sufficient data to assess the impact of the cash reference margins on the AgriStability program.
If I did not join the pilot for 2020, can I join for 2021?
Yes, you can join the pilot for the 2021 program year.
If I am in a partnership, do all partners have to join the pilot?
No, each partner can decide if they want to join the pilot.
Can I join the pilot, if my farm is combined with another farm?
If your farm is combined with another farm for AgriStability, all members of the whole farm must join to be eligible to participate in the pilot.
How will the program year margin be calculated under the pilot?
The pilot only applies to the reference margin. AAFC will continue to calculate the program year margin with accrual adjustments applied.
How will the reference margin limit be calculated under the pilot?
Since AAFC will calculate your reference margin on the cash basis with no accrual adjustments, your reference margin limit will be calculated using only your cash expenses.
How will structure change be calculated under the pilot?
The default method for structural change for the pilot will change from the ratio method to the additive method. The ratio method works best with accrual margins as there is less variability from year to year. The additive method responds better to cash reference margins and provides a more realistic structural change adjustment.
For more information on the additive method, see Annex C of the AgriStability Program Guidelines.
If I apply for an interim payment after joining the pilot, will my estimated reference margin be calculated on the cash basis?
If you apply for an interim payment after joining the pilot, your estimated reference margin will be calculated on the cash basis. If not, your interim will be calculated using accrual adjustments.
Can I join the pilot after I receive an interim payment?
Yes. However, there may be a greater possibility of being overpaid benefits because your Interim payment will be calculated using an accrual reference margin and your final benefit will be calculated using a cash reference margin. AAFC will contact you before processing your final form to make you aware of the potential for an overpayment.
Can I join the pilot after I receive my 2021 Calculation of Program Benefits and have my AgriStability benefits recalculated?
No. you must submit the consent form prior to submitting your 2021 application. If your consent form is not on file when your application is received, AAFC will calculate your reference margin on the accrual basis and you will not be able to participate in the pilot for the 2021 program year.
If I join the pilot, will my 2021 Enrolment Notice be recalculated using cash margins?
No, 2021 Enrolment Notices will continue to be calculated using the contribution reference margin with accrual adjustment information. The contribution reference margin is calculated according to the procedures outlined in the AgriStability Program Guidelines.
I file my taxes to the Canada Revenue Agency on the accrual basis. Can I join the pilot and have my reference margin calculated on the cash basis?
No. The purpose of the pilot is to make joining easier and to align your reference margin with your tax information. If you file your taxes on the accrual basis, your reference margin will also be calculated on the accrual basis.
I am a new or rejoining AgriStability participant. If I join the pilot, what information will I have to provide for you to calculate my reference margin?
You will need to provide up to three years of historical information including your income, expenses and productive capacity. If you participate in the AgriInvest program, you will only need to supply your productive capacity as AAFC will already have your income and expense information. AAFC will contact you for the missing information needed to calculate your reference margin after your completed consent form is received.
For more information on the pilot, please contact the AgriStability program.
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