Financial Profile of Canadian Farms
(2005 Taxfiler Data – Preliminary Estimates)
March 2007
Financial Profile of Canadian Farms
(2005 Taxfiler Data – Preliminary Estimates)
Research and Analysis Directorate
Strategic Policy Branch
December 2006
Any policy views, whether explicitly stated, inferred or interpreted from the contents of this publication, should not be represented as reflecting the views of Agriculture
and Agri-Food Canada (AAFC).
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Project No.: 07-018-dp
Aussi disponible en français sous le titre :
Profil financier des exploitations agricoles canadiennes
(Données des déclarants de 2005 – Estimations provisoires)
2
Preface
•
Taxfiler data are collected from samples of unincorporated and incorporated
tax returns and are compiled by Statistics Canada. The Taxation Data
Program is funded by Agriculture and Agri-food Canada. This Financial Profile
of Canadian Farms (2005 Taxfiler Data – Preliminary Estimates) provides
highlights and comparisons of farm level revenues and expenses by farm type,
revenue class and province.
•
Comments on this information package can be sent to David Culver at
culverd@agr.gc.ca, telephone (613) 759-1894 or Mathieu Delorme at
delormem@agr.gc.ca, telephone (613) 694-2395.
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Table of Contents
•
Introduction ………………………………………………………………………………………………………
5
•
Overview …………………………………………………………………………………………………………
6
•
Average Net Operating Income, Canada, 1992-2005………………………………………………………
8
•
Average Net Operating Income, before Capital Cost Allowance, by revenue class,
Canada, 2003 to 2005…………………………………………………………………………………………..
9
•
Average Farm Operating Expenses, per Farm, by Categories, Canada, 2005 ……………………........
10
•
Average Farm Operating Revenues, per Farm, by Source, Canada, 2005 ………………………………
11
•
Average Operating Revenues, Expenses, Net Operating Income and
Margins by Farm Type, 2005……………………………………………………………………………………
12
•
Average Net Operating Income, before Capital Cost Allowance, by Farm Type, Canada 2005 ……….
13
•
Average Net Income, after Capital Cost Allowance, by Farm Type, Canada 2005………………………
14
•
Average Operating Revenues, Expenses, Net Operating Income and Margins by Province, 2005……
15
•
Average Net Operating Income, before Capital Cost Allowance, by Province, Canada 2005…………..
16
•
Average Net Income, after Capital Cost Allowance, by Province, Canada 2005…………………………
17
•
Distribution of Farms by Revenue Class, Canada, 2005 ……………………………………………………
18
•
Glossary ………………………………………………………………………………………………………….
19
4
Introduction
•
•
•
•
The 2005 taxation data presented in this document cover unincorporated
farms with farm sales $10,000 and over, and incorporated farms with total farm
sales of $25,000 and over, based on 50% or more of their sales coming from
one agricultural activity. The data also include communal farming
organizations.
Operating margin is defined as net operating income per dollar of revenue.
In 2001, the Taxation Data Program adopted the North American Industry
Classification System (NAICS). Poultry hatcheries are now included with
poultry and egg farms. This makes previous-year comparisons difficult for this
farm type and the overall Canadian level since the inclusion of poultry
hatcheries had a substantial impact on the aggregate data.
This profile from the taxfiler data is only available on the Internet.
5
Overview
•
•
•
•
•
Average net operating income per farm increased from $28,784 in 2004 to
$29,303 in 2005.
Revenue per farm was up 8.3% on average from 2004 to $221,211 in 2005. At
the same time, average operating expenses increased 8.4% to $191,905 in
2005.
Higher revenues from potato (20.8%), hogs (13.8%), and dairy (11.5%) did not
entirely offset higher expenses for grain and oilseeds (10.4%) and for fruits
and tree nuts. The average operating margins decreased by 0.5 cents to 13.2
cents for Canadian farms in 2005, according to taxation records.
Revenue from cattle was up 9.2% in 2005 compared to the sales of 2004. This
was mainly due to the expansion in slaughter cattle sales following the easing
of restrictions on beef trade.
Average program payments and insurance proceeds increased 14.2%. In
2005, they accounted for 10.2% of the average operating revenue, the highest
share since 1992.
6
Overview
•
•
•
Among farm types, poultry & egg farms ranked first in term of average net
operating income before capital cost allowance ($125,783) in 2005, followed
by potatoes ($122,866) and hogs ($100,736). Poultry and egg farms posted
the largest profit after capital cost allowance ($82,700) in 2005, followed by
dairy ($52,999) and hog farms ($50,390).
In 2005, Quebec farms ranked first in terms of average net operating income
before capital cost allowance ($50,514), followed by Newfoundland ($49,138)
and New Brunswick ($45,836). Quebec farms also reported the highest net
operating income after capital cost allowance ($26,229), followed by
Newfoundland ($23,223) and Nova Scotia ($17,315).
In 2005, farms with operating revenues below $100,000, which represented
more than 59% of all farms in Canada, accounted for about 12% of total farm
revenues and recorded a margin of 7 cents per dollar of revenue.
7
Average Net Operating Income, Before Capital Cost Allowance
in Current Dollars, Canada, 1992-2005
35
29.1
Thousands of dollars
30
23.6 23.9 24.1 23.6
25
20
19.1
20.5 20.7
25.9
30.1
28.8 29.3
25.5
22.7
15
10
5
0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
8
Average Net Operating Income, Before Capital Cost Allowance,
by Revenue Class, Canada, 2003 to 2005
Average Net
Operating
Income
2003
Revenues Class
Average Net
Operating
Income
2004
Average Net
Operating
Income
2005
Dollars
$10,000-$49,999
(1,215)
(1,304)
(68)
$50,000-$99,999
13,672
9,416
10,213
$100,000-$249,000
27,932
29,249
28,060
$250,000-$499,999
62,590
64,278
64,601
$500,000 and over
161,090
187,605
172,060
25,167
28,784
29,314
All farms
9
Average Farm Operating Expenses, per Farm, by Categories,
Canada, 2005
240,000
191,905
200,000
Dollars
160,000
120,000
80,000
40,000
63,171
29,561
48,356
20,490
19,176
11,150
0
Crop
Livestock Machinery
expenses expenses expenses
Salaries
Net
Other*
Total
Interest Expenses Operating
Expenses
Expenses
* Other general expenses include such items as utilities, insurance, rent, custom work, net
property taxes, building maintenance, miscellaneous and marketing expenses. Exclude
salaries and net interest expenses.
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Average Farm Operating Revenues, per Farm, by Source,
Canada, 2005
240,000
221,211
200,000
Dollars
160,000
109,701
120,000
80,000
69,203
40,000
22,640
19,607
Program
Payments*
Other sales
0
Crop sales
Livestock sales
Total Operating
Revenues
* Includes gross crop insurance proceeds.
11
Operating Revenues, Expenses, Net Operating Income and Margins, per
Farm, Before Capital Cost Allowance, by Farm Type, 2005
Avg.
Operating
Revenues
Farm Type
Avg.
Operating
Expenses
Avg. Net
Operating
Income
Operating
Margin
cents per $ of
revenue
Dollars
Grain and oilseed
150,636
127,369
23,267
15.4
Potato
746,060
623,194
122,866
16.5
Other vegetable and melon
340,767
293,873
46,894
13.8
Fruit and tree nut
179,648
159,547
20,101
11.2
Greenhouse, nursery and floriculture
746,796
674,790
72,006
9.6
92,542
77,151
15,391
16.6
Beef cattle and feedlots
169,967
158,629
11,338
6,7
Dairy and milk production
379,343
284,607
94,736
25.0
Hog and pig
943,158
842,607
100,736
10.7
Poultry and egg
832,090
706,307
125,783
15.1
Other animal
102,346
98,722
3,624
3,5
All farms
221,211
191,905
29,306
13.2
Other crop
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Average Net Operating Income, Before Capital Cost Allowance,
by Farm Type, Canada, 2005
Potato
122,866
Poultry & Egg
125,783
Dairy
94,736
Greenhouse & Nursery
72,006
Hog
100,736
Other Vegetable
46,894
Grain & Oilseed
23,267
All Farms
29,306
Other Crop
15,391
Fruit & Tree Nut
20,101
Other Animals
3,624
Beef Cattle/Feedlots
11,338
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Dollars
13
Net Income, per Farm, After Capital Cost Allowance, by Farm
Type, Canada, 2005
Potato
42,992
82,700
Poultry & Egg
Dairy
52,999
24,896
Greenhouse & Nursery
Hog
50,390
21,665
Other Vegetable
Grain & Oilseed
All Types
Other Crop
Fruit & Tree Nut
Other Animal
Beef Cattle/Feedlots
-8,000
2,439
8,807
2,348
6,429
-6,265
-811
12,000
32,000
52,000
72,000
92,000
Dollars
14
Operating Revenues, Expenses, Net Operating Income and Margins, per
Farm, Before Capital Cost Allowance, by Province, 2005
Average per farm
Operating
Revenues
Provinces
Operating
Expenses
Net operating*
income
Operating
margin
Cents per $ of
revenue
Dollars
Newfoundland
479,843
430,705
49,138
10.2
Prince Edward Island
320,322
288,333
31,989
10.0
Nova Scotia
232,257
197,069
35,188
15.2
New Brunswick
310,808
264,972
45,836
14.7
Quebec
301,933
251,419
50,514
16.7
Ontario
240,959
208,333
32,629
13.5
Manitoba
225,429
196,341
29,088
12.9
Saskatchewan
138,140
119,869
18,271
13.2
Alberta
219,935
195,572
24,363
11.1
British Columbia
264,547
236,221
28,326
10.7
All Farms
221,211
191,905
29,306
13.2
15
Average Net Operating Income, per Farm, Before Capital Cost
Allowance, by Province, Canada, 2005
29,306
Canada
B.C.
28,326
24,363
Alta.
Sask.
18,271
29,088
Man.
Ont.
32,629
Que.
50,514
N.B.
45,836
N.S.
35,188
P.E.I.
31,989
N.L.
49,138
0
10,000
20,000
30,000
40,000
50,000
60,000
Dollars
16
Net Income, per Farm, After Capital Cost Allowance, by
Province, Canada, 2005
Canada
8,807
B.C.
7,673
Alta.
3,734
Sask.
1,977
Man.
6,436
Ont.
11,497
Que.
26,229
N.B.
17,230
N.S.
17,315
P.E.I.
3,470
N.L.
23,233
0
5,000
10,000
15,000
20,000
25,000
30,000
Dollars
17
Distribution of Farms by Revenue Class, Canada, 2005
Number of farms = 199,120
45
42.2
40
35
Percent
30
25
20.75
20
17.27
15
11.43
8.35
10
5
0
$10,000 to $49,999
$50,000 to $99,999
$100,000 to $249,999
$250,000 to $499,999
$500,000 and over
Farm Revenues Class
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Glossary
The following definitions appear in Statistics Canada, Statistics on income of farm families,
2001. Catalogue no. 21-207-XIE. For further information please contact: Whole Farm Data
Projects Section, Agriculture Division, Statistics Canada. www.statcan.ca.
•
•
•
•
•
Net market income: is the sum of total operating revenues less total operating expenses minus
net program payments.
Net program payments: program payments and insurance proceeds after deducting stabilization
levies or fees (government levies).
Net operating income: The profit or loss of the farm operation measured by total operating
revenues less total operating expenses, excluding capital cost allowance, the value of inventory
adjustments and other adjustments, for tax purposes. Or the sum of the preceding components:
net market income and net program payments.
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. After the
calculation of the capital cost allowance, farmers may deduct any amount up to the maximum
allowable.
Total income: The total income of each tax filing member of the family. It is the sum of the net
operating income and the off-farm income of a family involved in a single, unincorporated farm.
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Glossary (cont’d)
The following definitions appear in Statistics Canada, Statistics on income of farm families,
2001. Catalogue no. 21-207-XIE. For further information please contact: Whole Farm Data
Projects Section, Agriculture Division, Statistics Canada. www.statcan.ca.
•
•
Median income: The value of income for which half of the units in the population have lower
incomes and half have higher incomes.
Total income adjusted for CCA: The total income adjusted for capital cost allowance of each tax
filing member of the family. It is the sum of the net operating income adjusted for capital cost
allowance (e.g., net operating income less capital cost allowance) and the off-farm income of a
family involved in a single, unincorporated farm.
20
Glossary (cont’d)
Program payments and insurance proceeds: Income from the following six sources:
•
•
•
•
•
•
•
Provincial stabilization programs,
Federal and provincial disaster assistance programs such as the Agricultural Income Disaster
Assistance (AIDA) Program and the Canadian Farm Income Program (CFIP),
Gross Revenue Insurance Program (GRIP), now terminated,
Government payments and other subsidies (such as hog incentive programs, acreage payments,
assistance for clearing land and government grants),
Aggregate amounts reported for subsidies, patronage dividends and reimbursements,
Insurance proceeds from programs (private and government) for crops and livestock due to adverse
weather conditions, disease and other reasons,
Dairy subsidies are not included in programs payments nor are NISA withdrawals for unincorporated
farms.
21