2023 Tax Credit for Canola Growers

Alberta Canola reports that the Scientific Research and Experimental Development (SR&ED) tax credit rate for Alberta canola growers is 12.49 percent for 2023.

Canola growers in Alberta are required to pay a $1 per tonne service charge, approximately $0.02 per bushel, when they sell their canola. The SR&ED enables canola growers to claim a tax credit for the portion of their service charge payment that was used to fund certain qualifying research. Although, growers who request a refund of their service charge are ineligible to claim the SR&ED tax credit.

For example, a canola grower that paid a service charge of $1,000 to Alberta Canola in 2023, will be eligible to claim a $124.90 tax credit.

Alan Hampton, the Chair of Alberta Canola’s research committee, emphasizes the added value for growers contributing to the canola service charge.

“Farmers can recover a portion of their dollars invested by the Commission in research through the SR&ED tax credit. Alberta Canola does a great job to partner on projects and stretch our research budget to address challenges like blackleg and clubroot disease management, as well as monitoring insect pests for susceptibility and resistance to insecticides.”

The tax credit provides a number of benefits and can be used to offset federal taxes owing in the current year or carried forward up to 20 years or back 3 years to reduce taxes owing or paid in those years. It can also be received as a tax refund, if desired. 

THE TAX CREDIT CAN:
offset federal taxes owing in the current year,
be received as a tax refund,
be carried forward up to 20 years to offset federal taxes owing, or
be carried back 3 years to reduce federal taxes paid in those years.

To request the credit, individual producers must file a T2038 (IND), while farm corporations are required to file a T2SCH31 form.

For additional details, Alberta Canola encourages growers to reach out to the Canada Revenue Agency or consult their accountants.