Earlier this month, I attended the first half of a farm and business tax seminar that was sponsored by OMAFRA. The topic of discussion during most of the morning session was on legal trusts. From a farmer’s perspective, a legal trust is an entity that can protect a farmer’s assets, both during his/her life and also at his/her death. A trust is also a tool that can be used to improve one’s tax position and allow the avoidance of probate fees on certain assets. The first of two speakers on this topic was Peter Lillico, a lawyer and partner from Lillico, Bazuk, Kent, Galloway in Peterborough. Although a trust can be a useful tool to farmers, I find it a bit of a oxymoron that a ‘lawyer’ is needed to create a ‘trust’. The two words just don’t seem to go hand in hand. Nonetheless, if you’re going to have a trust, one must have a lawyer.
Adding the accounting perspective to the trust side of the discussion was Kurt Oelschlagel from the Hanover office of BDO Dunwoody. The information that was presented was very thought-provoking and provided a ‘security blanket’ option for farmers to use to enhance their farm succession plans. Even though the topic for the morning could be somewhat dry and cause one’s eyes to glaze over, the speakers managed to provide appropriate examples to which farmers could relate.
Also presenting in the morning was Rob Gamble from OMAFRA. Rob provided an update on the most recent StatsCan information on farmers and various farm activities and crops. Comparisons from previous years were also presented. In listening to his comments and presentation of the statistics, I question the reliability of the information. I know that the information was retrieved from the farming participants and tabulated accurately but as one of the participants in that survey, I had many questions during the completion of the survey. Most of the questions were accounting in nature and could be taken directly from a tax return and/or financial statements but the interpretation of the questions in the survey could lead the participant to many different conclusions and thus many different answers. Depending on the participant’s interpretation of the question, one answer might be completely different from the interpretaion of another participant, providing misleading results. Providing the answers to the survey was done by telephone. I simply went from blank to blank giving the answers that I had previously recorded, reciting them to the person from StatsCan. No other questions were asked and no follow-up questions were presented. Completion of the survey was quite time-consuming and I found myself annoyed that I had to take the time to do it. I am currently trying to determine what the penalty for not completing it might be. I’m sure that answer will provide more fuel to my annoyance. I wondered how many other participants were reluctant. Did the reluctance cause them to hurriedly complete the questions, leaving more room for error? Based on all of these factors, I don’t put a great deal of credence in the results of the survey and quite frankly, it worries me that OMAFRA and many other organizations use this easily skewed information. Reminds me a little of the Enron scandal or the RIM Park fiasco in Waterloo, Ontario.
Unfortunately I had to miss the afternoon portion of the seminar. The CAIS program was the topic of the afternoon session. As a farmer, I appreciated the opportunity that OMAFRA provided for me to gather information to assist in my farming operations. When I registered for this type of educational event, I looked forward to an informative day and a lunch that I didn’t have to prepare. That’s always good news – except for my husband at home who has to fix his own lunch. Although my husband may have been disappointed, I was not.
The Snyder School of Higher Learning has re-opened and the retired school marm has come out of retirement. A local rural family relative is homeschooling their three children and I have agreed to help the older two create a blog! The blog will be the equivalent of their ‘blackboard’ (do they still use those?) and will provide an opportunity to publish their writing. It also gives grandparents, aunts and uncles, etc. an opportunity to see if the kids are really being ‘schooled’. Hopefully this blog will provide fun and education for the students and a peace of mind for the monitoring family members. The kids are trying to accompany their writing with applicable photos and/or artwork. Lots of fun for both teacher and students. I’ve included a photo of my newest students. Please feel free to check out the site: snyderschoolofhigherlearning.blogspot.com
I’m old. There – I’ve said it. Maybe if I say it often enough, it will sink in and become reality. Maybe saying it isn’t enough but discovering the changes in the world that technology has created will certainly help to reinforce my advanced age. For instance, I just read that in the U.S., Ernst & Young is changing the way that it recruits for new employees, the ones fresh out of university. Rather than having the traditional business suit-clad recruiter from their firm at a booth at the local job fair, they’re setting up a computer with a televised employee (probably a hired actor!) that speaks from the monitor and asks potential employees to record a videotape about themselves, describing their strengths, weaknesses, etc and generally asking them ‘what they think’. I had to read the article twice to make sure that I had read it correctly – okay, so I had to grab my reading glasses! When I was that age, no one wanted to know what I thought. Okay, so that hasn’t changed. I would have thought bookkeeping skills, spreadsheet manipulation or simply adding might be a good starting point for recruitment at Ernst & Young, but like I said I’m old.
Okay, so maybe I’m being a bit dramatic but do I really want someone that does my taxes or handles my audit to be the same someone that can produce a video and ‘sell’ themselves – I’ve never been a fan of solicitation. The word has a confusing connotation for me, if you know what I mean. I guess that creating a video that does a good job of selling themselves could give a clear indication that the individual has confidence and some technological skills that would be important to any company. It could also mean that they are a con artist – swamp land, anyone? Hopefully as I continue my journey, taking myself out of my comfort zone regularly, I will not be so surprised at the differences that continue to exist. It’s sure not like it used to be in ‘the good ol’ days’!
According to the Toronto Star, the average age of an individual engaged in farming is increasing. The Amherstburg Echo states that the average age of a farmer in Ontario is 52 years. I don’t find this hard to believe considering historical commodity prices and the discouraging statistics regarding the profitability of farming. Purchasing an existing farm operation or establishing a new farm operation takes a huge capital investment as well as the passion to make it happen. A young person wanting to get involved in farming takes a great handout from somewhere in order to even think about it. This worries me, partly because I’m almost 52 but mostly because my husband, Peter, is even closer! Peter and I love farming – both the work and the lifestyle. When we saw that a young person showed that same love of farming, consistently and without exception, we thought we could provide the handout required to establish him in the business of farming. That special young person is Andrew Mazurka, a recent graduate of the University of Guelph. My husband and I have formed a partnership with Andrew and recently purchased a 112-acre farm with a country bungalow nestled at the front of the property. Another asset included in the newly-formed partnership is a new Peterbilt tractor-trailer. Andrew is the newest owner/operator driver for Kleen Transport in Norwich, Ontario. Peter and I have always told Andrew that in order to own a farm, Andrew would have to ‘subsidize’ the farm purchase with an additional full-time job. The purchase of this tractor-trailer will provide that full-time position that subsidizes the farm purchase for Andrew. I think that it’s sad to think that farming is no longer a career that provides a living, it’s really becoming a hobby that has to be subsidized. There is at least one other way that Andrew can own a farm – marry our daughter!
With an upcoming election, I have been looking for the agricultural issues to come front and center but thus far have been disappointed. A learned agricultural columnist suggested that maybe the farmers are happy. Busy, for sure, happy with commodity prices, finally but all the news does not spell happiness for farmers. Commodity prices may be up, but so are costs and to make a profit is still going to take a pretty sharp pencil. The boundaries in the riding in which I reside have also changed resulting in an area that is now just as much urban as rural, thereby changing the potential outcome of support from an agricultural perspective to an urban perspective. That is not good news for agriculture. Not only are there fewer and fewer of us farmers to vote, now the lines have been re-drawn to make the majority of the area voting an urban group. Add to that the fact that the riding has a large number of Old Order Mennonites who are primarily farmers and don’t vote. That reduces the farming representation even further. There’s still uncertainty regarding supply management with the recent media coverage of the Montreal Economic Institute report on supply management and the Doha round of WTO talks. Farm land prices continue to increase causing a higher cost to getting into the business of farming. No one should be surprised that the average age of the farmer is getting higher and higher. I don’t think the farmers are happy – they are certainly busy and representation from the organized agricultural groups have not brought the agricultural issues to the forefront. Farmers don’t need a history lesson to get them to vote. There’s plenty of other reasons out there.