2015-0619501E5 Definition of farming

Principal Issues: Whether activities such as raising/breeding parrots for pet trade would be considered farming.

Position: No.

Reasons: See below.

Author: Couvrette, Amanda
Section: 248(1)

XXXXXXXXXX                    2015-061950  
                                            Amanda Couvrette

December 2, 2015

Dear XXXXXXXXXX

RE: The definition of “farming” under the Income Tax Act (the “Act”)

We are writing in response to your email and our telephone conversation (Couvrette/XXXXXXXXXX) of November 23rd, 2015 wherein you requested our views on whether a business of breeding parrots to be sold as pets would be considered farming under the Act and what form should be used to report such business activities.

Our comments

Farming is defined in subsection 248(1) of the Act to include the tillage of the soil, livestock raising or exhibiting, maintaining of horses for racing, raising of poultry, fur farming, dairy farming, fruit growing and the keeping of bees.  The courts have held that this definition is not exhaustive and typically one must look to the common, ordinary and generally accepted meaning of the word as well as to the specific activities detailed in the statute.  Accordingly, the ordinary definition of farming is somewhat fluid and the particular activities undertaken by a taxpayer would normally have to be considered on a case-by-case basis.

Notwithstanding the above, it has been our long-standing position, supported by the courts, that breeding dogs or other types of animals for use/sale as pets does not normally constitute farming.  For instance, in Partington v MNR, 91 DTC 347 and Sniderman v. MNR, 89 DTC 232, the tax court found in both instances that the business activities relating to the raising and breeding of dogs as pets was not farming.

Therefore, in your particular situation, it is our view that a parrot breeding business would not be considered a farming business.  Accordingly, such business activities should be reported using Form T2125, Statement of Business or Professional Activities.

We trust these comments will be of assistance.

Yours truly,

Michael Cooke, C.P.A., C.A.
Manager
Business Income and Capital Transaction Section
Business and Employment Division
Income Tax Rulings Directorate

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