Greenhouse accountant in Delta

Growing under glass is farming, for tax

A greenhouse range is heated, irrigated and lit like a plant, but the CRA treats growing crops in it as farming. That opens up the cash method. Revenue is counted when it is received and costs when they are paid, rather than when they are earned or incurred. For a grower with large receivables from a packer at year-end, or a big order of seed and growing media in December, the choice moves real income between years.

The cash method has its own adjustments, including inventory rules that stop a loss being created by buying ahead. Once chosen, it should be applied consistently. We look at which method fits, whether the operation is incorporated or farmed personally, and keep the file on the same footing each year. Cash versus accrual accounting sets out the difference.

Farm support programs feed into the same return. AgriStability payments and AgriInvest withdrawals are farm income in the year they are received, and the program filings draw on the same financial records as the tax return. A crop failure, a disease outbreak in a range or a sharp rise in input costs can trigger a claim. When the books are current, the program forms take hours rather than weeks. We prepare the tax return and the program figures from one set of numbers, so they agree.

Zero-rated vegetables and GST refunds

Fresh tomatoes, peppers and cucumbers are basic groceries, and basic groceries are zero-rated for GST. A registered grower charges no GST on them, yet still claims back the 5% GST paid on natural gas, electricity, fertiliser, packaging, repairs and new equipment as input tax credits. The usual result is a refund, period after period. A grower in a steady refund position can often choose to file more often than required, so the money comes back sooner.

The product mix matters. Ornamental plants and cut flowers are generally taxable for GST, so a range growing both vegetables and bedding plants has to charge GST on the plants and code each sale correctly. Refund returns also draw CRA reviews, which a clean ledger answers quickly. Zero-rated versus exempt supplies explains why the category decides your credits.

PST and the farmer exemptions

BC PST is separate from GST and has no refund mechanism. A grower who pays PST on a purchase generally just carries it as a cost. BC does allow qualifying farmers to buy certain farm machinery, equipment and supplies without PST, provided the conditions are met and the purchase is documented. The exemption covers items used in farming, not everything a farm buys. An office computer or a pickup used mostly off the farm is outside it.

We check which purchases qualify, make sure the paperwork supports the exemption, and record the PST paid on everything else as part of the cost. The BC PST guide covers registration and the general rules.

Heat, light, structures and expansions

Keeping a greenhouse warm through a coastal winter makes energy one of a grower’s largest costs. The books should show natural gas, electricity and carbon dioxide for crop enrichment in separate accounts, split by range or crop where metering allows. A grower who can see energy cost per crop each month can make planting and lighting decisions before the season, not after.

The structures themselves, boilers, heating pipes, irrigation and fertigation systems, lights, packing lines and forklifts are capital assets. They are deducted over time through capital cost allowance at the rate for each CCA class. An expansion is usually the largest decision a grower makes, and the first-year claim depends on when each part is available for use, not when it was ordered. CCA classes lists the common ones.

Seasonal crews and foreign agricultural workers

Most ranges run a core staff year-round and add workers for planting and harvest, some of them through federal agricultural worker programs. They are employees. Income tax is withheld, and CPP and EI generally apply as they do for local staff. Employer-provided housing, transport and meals each need a look for taxable-benefit treatment. Agricultural employers also register with WorkSafeBC and report payroll there.

A large seasonal crew can carry a grower past the BC employer health tax exemption, especially where associated companies share it. T4 slips have to reach workers who may be home again by February. The Delta payroll page covers the full cycle.

Passing the greenhouse to the next generation

Many Delta greenhouses are family businesses, often run alongside field farms and sometimes a trucking company. Qualified farm property can be eligible for the lifetime capital gains exemption on a sale. It can also pass to a child through an intergenerational rollover that defers the gain. Both depend on how the land and structures have been owned and used for years before the transfer, and on whether they sit personally, in a partnership or in a corporation. Farm succession and rollovers goes into the detail, and the Delta farm page covers the field side.

Fixed fees, fully online

One CPA, one fixed fee agreed up front: the T2 or farming T1, GST refund returns, PST exemption records, the CCA schedule, seasonal payroll and CRA correspondence. EverStone is an Abbotsford CPA firm, and every engagement runs online — video, e-signature and secure document exchange, so you never lose a day to an office visit. Monthly bookkeeping for a greenhouse starts from $300 a month with GST filing included, and a corporate T2 is quoted after a free consultation. See what it costs.

Remote accounting for growers from Abbotsford

EverStone is a one-CPA firm in Abbotsford, British Columbia, serving Delta growers remotely. There is no Delta or Ladner office and no local staff. Records come in through a secure upload link, meetings run by video around the growing schedule, and the fee is fixed before work starts; see how to book a free consultation.