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 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 starting in the 2020 program year. You are eligible to participate 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 and 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 pilot is available for the 2020 and the 2021 program years.
How do I join the pilot?
To join the pilot for the 2020 program year, complete and submit an AgriStability Cash Reference Margin 2020 Consent Form by March 31, 2021. The consent form to join the pilot for the 2021 program year will be available in fall 2021.
What is the deadline to join the pilot?
The deadline to join the pilot is March 31, 2021 for the 2020 program year and March 31, 2022 for the 2021 program year.
If I join the pilot for 2020, can I opt out of the pilot for 2021?
If you join 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 will not be able to 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 do not join the pilot for 2020, can I join for 2021?
Yes, you can join the pilot for the 2021 program year only.
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?
Since 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 only using the income and expenses you report to tax, AAFC will only use the expenses you report to tax to calculate your reference margin limit.
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 join the pilot before submitting your interim application, 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. We 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 2020 Calculation of Program Benefits and have my AgriStability benefits recalculated?
No. However, you can join the pilot for the 2021 program year.
If I join the pilot, will my 2020 Enrolment Notice be recalculated using cash margins?
No, 2020 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?
We will calculate your reference margin using three years of information including your income, expenses and productive capacity for all years (unless five years of historical information are provided). AAFC will contact you for this information after your completed consent form is received.
For more information on the pilot, please contact the AgriStability program.
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