Food donation tax credit will be retroactive to Jan. 1, 2014

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Great concept, on paper. However, can these businesses and individuals simply donate their rotten food and claim a tax break? Does the charity not need to inspect it and accept it?

This sounds like yet another cash cow for producers who choose to "wait out" the market, only to be left holding rotten food that they then dump on local charities who can't use it.

Who is regulating this? Anyone monitoring it? Who is making sure it's not abused to claim 25% of the market value for essentially rotten food?

And please... agro-busineses, farmers, and individuals are not saints, time and time again they have proven their willingness to take advantage of EVERYTHING.

PS: This in my comment, not yours. I'll copy it if I want too!!

http://www.cra-arc.gc.ca/chrts-gvng/chrts/prtng/rcpts/dtrmnfmv-eng.html.

I believe this should help your wretched soul in determining how the charities assess the fair market value for the food they are receiving?

I can assume you yourself are not ready for sainthood as well?

It includes all agricultural products including herbs. Tobacco is a herb. Government giving tax deductions for herbs. Too funny!

So how does it work with the SD RMP . How do things get proven ? Are you allowed to get both ? Would it be like double dipping ?

Let me see if I understand this correctly - this tax credit is going to be a provincial-only tax credit, meaning that if it is going to be treated the same way as a charitable donation, it will be eligible for only either a 5.05% credit or a 11.16% credit on the provincial portion of an individual's T1 return, depending on the amount donated (the charitable donation threshold is $200 annually)

This means, if I understand the math correctly, that if a farmer gives $100 worth of food at the retail level to a food bank, $25 of that would be considered a Provincial tax credit which would, on his/her provincial tax return, be eligible for the tax credit rate of 5.05% or a tax saving of a paltry $1.26 on his/her Provincial tax return, a tax saving which will be quickly, and well-more-than-completely, absorbed by an off-setting increase in the accounting fees required to complete the forms - thereby turning this tax credit into a net-negative exercise for the farmer.

The sleight of hand, as always, is that very-few people outside the financial services community understand that a tax credit and a tax credit rate are two completely-different things. There's almost no way, therefore, that a 25% tax credit will, or even could, turn into a 25% tax saving, yet that's what the OFA seems to believe will happen.

What's worse is that this program, however badly-flawed, will prompt our supply managed community to become even more shrill about how much they donate to food banks, yet continue to completely-ignore, as always, that the usurious retail prices for dairy and poultry products caused by supply management are the reason people go to food banks in the first place.

Stephen Thompson, Clinton ON

I'm advised that local food banks don't have the capability to store produce and other perishable products, and prefer, instead, to give people food cards for these items which they can then use in stores.

I'm also told there is some way of effectively preventing people from using these food cards for beer and/or cigarettes, thereby reducing the possibility of people substituting those items for food.

In addition, I can't imagine local food banks wanting to assume the legal liability of being sued for distributing what, even inadvertently, turns out to be bad food - sometimes, especially when it comes to legal liability when you don't know who, and therefore can't take legal action against, the farmer who donated the food, even free is too-high a price to pay for something.

All I know is that no amount of Directors and Officers liability insurance would ever be enough to tempt many people to be a Director on any food bank if, and/or when, it accepted perishable food products from farmers.

Stephen Thompson, Clinton ON

I wonder how much of an increase food banks are going to see when people get word of free fresh veggies and such and those farmers are going to get a tax reciept . It seems we find more ways to help people to not get jobs than what we do to get them off their ass and get a job . Government and society need a good kick in the pants .

What Steve likely has not thought of is the fact that food banks in the big cities will likely get fresh shipments daily at the expense of the tax payers . So the food will not likely ever go bad that fast with all the leeches looking for a free hand out instead of a hand up !

Thompson's extremely simplistic, naive and ideologically-driven view of economics is quite juvenile and ridiculous.  In his case, an Ag Econ undergrad degree and an MBA seem to have given a superficial education in economics but it seems to be all he knows.

Then I recall Schumacher's words... "Economists themselves, like most specialists, normally suffer from a kind of metaphysical blindness, assuming that theirs is a science of absolute and invariable truths, without any presuppositions."

Thompson's views, by his own definitions, are always correct.

E. F. Schumacher also noted - "Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius - and a lot of courage to move in the opposite direction", and moving in the opposite direction of the so-called "intelligent fools", and, especially on this site, "anonymous fools", is exactly what I constantly, and many say courageously, strive to do.

In addition, I'll not just see the anonymously-contributed Schumacher quote, I'll raise with the mission statement adopted by the Economist magazine at its founding in September 1843 - to take part in a "severe contest between intelligence, which presses forward, and an unworthy, timid ignorance obstructing our progress".

Therefore, while the anonymous rabble on this site continues to madly flail about in a hopeless attempt to assassinate my character, they simply cannot prove me wrong in my attempts to make things less complex, and my attempts to constantly oppose "unworthy, timid ignorance", especially when it appears anonymously.

More to the point:

(1) tax credits and tax savings are NOT the same thing.
(2) my belief that the OFA didn't do the math before they recommended and/or approved this program, is, based on the number of times the OFA didn't do the math when touting previous "designed by farmers for farmers" programs, possibly wrong, but very-unlikely to be so.
(2) My calculations about the tax savings resulting from this program are, unless my tax program is inaccurate, not wrong.
(3) My observations about the shrillness with which supply managed farmers boast about their existing contributions to food banks, are not wrong
(4) Anonymous postings are, by definition, the epitome of "juvenile and ridiculous", as well as "unworthy, timid ignorance"
(4) There is no "metaphysical blindness" in telling the truth, especially truth which the anonymous coward who posted the above E. F. Schumacher quote cannot deny.

I'll advise all the anonymous pro-ethanol, pro-supply management, and other assorted cowards on this site once again - If you can prove me wrong, go ahead and proudly sign your name when you do, and if you can't, stop trying.

Stephen Thompson, Clinton ON

Stephen is one person definitely impressed with Thompson.

The proposal for a tax credit for donated produce to food banks was a PC party initiative from Earnie Hardeman who was PC agriculture critic at the time. The OFA as well as many other farm groups and food groups present at the announcement simply didn't oppose it because the program didn't harm no one and the food banks benefited.

Actually Steve might be on to some thing in regards to math and beliefs . Seem to remember being told that Hydro bills would not increase with green energy either !

According to federal rules in regards to charitable donations a receipt is based on Fair Market Value of the donation which includes property, meals, gifts, etc.

If a FIRST time donor gives a $100 worth of food, at Fair Market Value, to a approved charity, that person will receive a TOTAL TAX CREDIT of $45.05.

If an Ontario farmer donates $100 worth of agricultural produce at Fair Market Value, his TOTAL TAX CREDIT is $1.26.

Tax discrimination against farmers. Plain and simple. How can any farm organization support a system where farmers are treated as second class citizens in regards to taxation? This government holds farmers in contempt.

Has the farmer not already deducted the crops expenses from his income? Maybe it will help the Gleaners running there dehydrating plants making dry soups for the less fortunate. Disturbing that 40% of food in Toronto is thrown out and we have others starving and needing food banks,ect.

Just for illustrative purposes, I plugged the numbers into my 2013 T1 tax program, and came up with the following scenarios for a farmer with a $90,000 taxable income:

(A) no charitable contributions - federal tax $14,556, provincial tax $7,543
(B) $1,000 in charitable donations - federal tax $14,294, provincial tax $7,388
(C) first time donor, $1,000 in charitable donations - federal tax $14,044, provincial tax $7,388
(D) $1,000 in charitable donations to food bank - federal tax $14,294 - provincial tax based on $250 tax credit (25% of $1,000 donation) $7,368
(E) first time donor, $1,000 in charitable donations to food banks - federal tax $14,094, provincial tax $7,368

Once people realize that the first time charitable donor program affects only federal tax payable, and only for one year, and that the food bank program affects only provincial tax, albeit for what is assumed to be multiple years, it's quite-easy to see that this new program, while not discriminating against farmers, isn't a very-lucrative program because it is going to save farmers in the range of only an incremental $20 in tax for $1,000 of food donated - and that's assuming that small-town food banks are prepared, or ever will be prepared, to accept perishable food items in the first place.

Stephen Thompson, Clinton ON

Set the calculations aside for a moment, please.
Most people donate to food banks because it is the right thing to do.
It is not really about the tax savings, of course they are minor.
People want to help the unemployed and under-employed - especially the 40 % of
Food bank users that are children.
For the 90 % of us that are fully employed, food in Canada is affordable and plentiful.
Food is only 10-11 % of income in both Canada and the US.
People that can afford to, and that is most of us, can give to others - deductions aside.

My posting was to:

(A) correct mis-information proffered in a previous posting
(B) absolve farm organizations from being blamed for agreeing to a scheme which was incorrectly believed by the poster to adversely affect farmers.
(C) use actual after-tax numbers to illustrate the relatively-small tax savings to be realized by farmers who donate food to this program.

In addition, I disagree about the level of charitable donations people actually make, especially to food banks - over 95% of my tax clients, almost all of whom are fully-employed or retired, consistently give less than $20 per year, per family, to registered charities, and:

(A) almost all of that is the result of door-to-door canvassing
(B) I have only one couple who gives anything to womens shelters, and I can't recall the last time, if ever, any of my clients gave anything to a food bank.

Therefore, I don't see much, if any, desire by individuals to spend any actual money to help the unemployed and/or the under-employed, especially by supply managed farmers who are, by forcing consumers to pay the costs inherent in 200% tariff barriers, doing absolutely everything they can to increase the level of impoverishment among the unemployed and the under-employed.

Stephen Thompson, Clinton ON

Wow, your clients are way below average, good thing they are anonymous or you might have really embarrassed them! They are about 20 times below average.

StatsCan's website information about how much Canadians give to charities shows the average annual amount per taxpayer was $446 in 2010.

StatsCan finds that being employed, having a university degree and belonging to a higher-income household increase both the probability of making donations and the amounts given.

In 2010, people whose annual household income was $120,000 or more donated an average amount of $744, compared with $427 for those whose income was between $80,000 and $99,999.

There were also significant differences based on donors' education levels. In 2010, 91% of those with a university degree had given and their average donation was $715.

StatsCan reports people who are more religiously active are more inclined to donate and, on average, they make larger donations. In 2010, 93% of them had given money to one or more charitable or non-profit organizations, and their average annual donation was $1,004. 

Considering how far above average you see yourself and with two university degrees you are likely giving at least a couple of grand every year to charity.

So nice to see dollars wasted on useless information .

My client list ranges from people on welfare to multi-millionaires and everything in between. They're all good people.

(A) I see no increases in charitable donations from higher-income and/or better-educated people in my client base - somebody with two university degrees and making over $150,000 per year is just as likely to donate only $20 per year as anyone else.
(B) Charitable donations adding up to more than $20 annually are most-often from people with a strong religious affiliation - some clients give up to $10,000 per year to their church, and donations made to religious causes seem to have little, if any, correlation to income and/or education.

In my experience, a good number of well-educated people give of their time and talent to charity, rather than their money, and, therefore, get no charitable donation receipt at all. For example, local charities always need capable people to be on their Boards of Directors, and almost always have no money to pay them, yet these charities never seem to have any trouble finding amply-qualified people to serve.

My original point is that, based on my experience, an incremental $20 provincial tax saving for donating $1,000 worth of food to a food bank isn't likely to appeal to those many farmers who normally give less than $20 per year to charity.

My secondary point is that this new tax credit, even if it does provide only a marginal tax benefit, still works at cross-purposes to other programs which promote the sale of local food, even at a discounted price. Why, then, do we have programs to help farmers sell food, as well as programs to reward them for giving it away?

Stephen Thompson, Clinton ON

I don't have facts and figures ( so will likely get flamed from the know it all bunch ) but I do think that DFO or local dairy farmer groups do give to different meal programs at local schools . So to say that they don't give is not a correct statement .

Every organization is a bleeding heart in need of help . Problem is that so many of these dollars never get to the real target but get used for wages that rape and pillage along with lining some one elses pockets . The public is sick to death of being asked to donate . Heck if you have a store front business , it is nothing to have at least 2 or 3 request's to help a bleeding heart organization every week .

Farm donations to the London Food bank are up 12% from last year,receiving 305,000 Lbs of food so far this year.The Tax credit will only boost that more.

Could be you really don't have that many clients or they are extremely cheap.

The tax savings are not designed to be "very lucurative".

The point being made was simply that for most people, Charity is its own reward.

I am surprised that your clients give such pathetically tiny amounts compared to the average Canadian.

But often, like attracts like.

One would have to take Steve's word on this as he only see's the tax receipts . It may well be that people more so from his area give cash with out thinking about the receipt . Rather than just giving once to a charity where you are going to go see how many others you out gave for personal gratitude of reading your name on a donators list . Many are more humble than others when it comes to these things . Further it may well be that they give smaller amounts to many instead of once to one .

I have been told of a guy who had a $25,000.00 donation receipt laying on the counter for three months while he was having his house remodeled . Take about a show off . Needless to say he is know as one cheap SOB when it comes to getting work done or buying things . One the other side he would also be the first to screw a customer .

The only donation receipt I make sure I get is for a political party . If for nothing else than to make sure if I call with a beef they can be assured that they can check their records and know I gave so now is their time to earn their keep !

I am not sure that the free food is really doing any one any good . With basic economics it would then be that the free food would become more in demand . The other side is that if you are willing to give more free stuff away you are reality telling others it is not worth what they paid for it . Sales would drop and prices would increase . You have to look at the system of being a real benefit for after tax dollars . That is why so many corporations make cash donations . Why would you give a donation of product you are trying to get paid for from others ? I know most of these food products are blems but it is the simple fact that if you don't have firstly the profit and dollars made to afford the donation you are cutting your own market . Then look at buy local , buy fresh , as a premium priced product you are opening the market up even more to cheaper imports to fill those markets . If you are making a product and some how there is a flaw in the run , companies will either destroy it or sell it at a discount . They do not give them away for free .

I totally get it that it is about trying to help thy neighbor but some times it works against . Why then could not the farmers sell the blems at a discount price rather than giving it away ? Basically we are now giving hand outs instead of a hand up .

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