The net cash income estimates in the Net Farm Income, Agriculture Economic Statistics, are the official Statistics Canada estimates. Other estimates of net cash income (farm cash receipts minus operating expenses) can be derived from the data from the Agriculture Division of Statistics Canada, namely data from the Agriculture Taxation Data Program (ATDP), the Farm Financial Survey (FFS) and the Census of Agriculture. It is important to understand coverage and conceptual differences when comparing data collected for different purposes. Adjustments are required to make these estimates comparable.
1. Conceptual differences
Note that the text below is based on the differences that existed for the 2020 reference year.
a) Net Farm Income: Agriculture Economic Statistics
The Agriculture Economic Statistics (AES) estimates include all agricultural businesses. These data are not available by farm type, sales classes, and sub-provincial regions or at the micro level.
Receipts and expenses are estimated by calendar year. They are recorded on a cash basis when the money is paid to, or disbursed by, the farmer.
AES receipts and expenses exclude: income earned from non-agricultural use of the farm (e.g., income from tourism activities on farm); income that farm operators or their families receive from other sources (e.g., wages and salaries from non-agricultural activities, and investment income); revenue or expenses from the sale or purchase of farm capital (real estate, machinery and equipment), although the interest paid on these purchases is included as an expense; capital payments where funds do not relate to current production and transfer payments (such as training allowances) directed to individuals; unlike the ATDP, FFS and Census of Agriculture, AES estimates exclude farm-to-farm transactions, unless they occur across provincial or national borders. Within a province, sales from one farm are considered an expense to another, thus offsetting each other.
b) Agriculture Taxation Data Program
The Agriculture Taxation Data Program (ATDP) is an annual census of unincorporated and incorporated tax-filer records designed to estimate a range of financial agricultural variables.
The target population consists of all unincorporated, incorporated and communal farms in Canada. For statistical purposes, the estimates presented cover both unincorporated farms and communal farming organizations with total farm operating revenues equal to or greater than $10,000 as well as incorporated farms with total farm operating revenues of $25,000 and over.
The estimates are published on a calendar year basis but no attempt is made to adjust data from agricultural corporations reporting data on a fiscal year that may not coincide with a calendar year.
The ATDP "Total Operating Revenues" include revenues from "Custom Work and Machine Rental" and "Rental Income," which are not included in the AES farm cash receipts.
c) Census of Agriculture
The Census of Agriculture (CEAG) is a census of individuals, businesses and organizations that produce agricultural products and report revenues or expenses for tax purposes to the Canada Revenue Agency. The questionnaire continues to ask for total receipts and total operating expenses although, starting in 2016, no questions are posed about detailed expenses. Data are generally provided on a calendar year basis, or for a complete fiscal year.
Unlike the AES, CEAG data on receipts include dividends received from co-operatives, Goods and Service Tax (GST) refunds, custom work receipts, and rebates received.
2. Comparison of estimates
Conceptual and methodological differences and data collection methods can result in misleading comparisons between AES receipts or expenses series and total income or expenses derived from ATDP, FFS or Census of Agriculture data. The exclusion of farm-to-farm transactions within a province in the AES and their inclusion in the ATDP, FFS and CEAG datasets is the main reason that comparisons are difficult. However, net cash income estimates (farm cash receipts minus operating expenses) are more directly comparable since, within a province, sales from one farm are an expense to another farm, and the two offset each other.
As is the case with farm-to-farm sales, some receipt items not included in the AES receipt series would tend to cancel each other out when deriving net cash income estimates from the various sources. For example, the exclusion of custom work receipts from AES receipts is compensated to a large extent in the net income estimates by the use of a net custom work estimate (custom work expenses minus custom work receipts) in the AES expense series. The subtraction of custom work receipts from custom work expenses is done in an attempt to minimize—in the aggregate—the presence in the AES of operating costs incurred by agricultural producers in providing custom work services. In a less precise manner, one could expect the ATDP estimates for the components of "miscellaneous revenue" and "miscellaneous farm expenses" not included in the AES series to offset each other to some degree.
The ATDP publishes average receipts and expenses only for farms reporting total farm operating revenues of $10,000 or more on their income tax return and agricultural corporations reporting total farm operating revenues of $25,000 and over, and for which 50% or more of their sales come from agricultural activities. For purposes of comparisons with the AES, estimations for the unincorporated farms reporting total operating revenues below $10,000 were used internally in spite of the lower quality of these estimates.
The AES includes establishments primarily engaged in growing cannabis under glass, protective cover or in open fields while these establishments are excluded in the CEAG or ATDP data.
3. Results
| 2020 | |||
|---|---|---|---|
| AESTable 1 footnote1 | ATDPTable 1 footnote 2 | CEAG | |
| thousands of dollars | |||
| Newfoundland and Labrador | 5,743 | 23,408 | 26,567 |
| Prince Edward Island | 99,770 | 122,948 | 120,589 |
| Nova Scotia | 10,293 | 88,248 | 84,858 |
| New Brunswick | 171,379 | 109,839 | 107,078 |
| Quebec | 1,807,904 | 2,200,891 | 2,115,720 |
| Ontario | 3,432,776 | 3,354,301 | 3,266,198 |
| Manitoba | 1,505,872 | 1,215,510 | 1,184,141 |
| Saskatchewan | 5,583,907 | 4,194,316 | 4,096,507 |
| Alberta | 2,907,566 | 3,092,450 | 3,193,317 |
| British Columbia | 412,778 | 591,372 | 588,458 |
| Canada | 15,937,987 | 14,993,281 | 14,783,433 |
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| 2020 | ||
|---|---|---|
| ATDP - AESTable 2 footnote 1 | CEAG - AESTable 2 Footnote 2 | |
| thousands of dollars | ||
| Newfoundland and Labrador | 17,665 | 20,824 |
| Prince Edward Island | 23,178 | 20,819 |
| Nova Scotia | 77,955 | 74,565 |
| New Brunswick | -61,540 | -64,301 |
| Quebec | 392,987 | 307,816 |
| Ontario | -78,475 | -166,578 |
| Manitoba | -290,362 | -321,731 |
| Saskatchewan | -1,389,591 | -1,487,400 |
| Alberta | 184,884 | 285,751 |
| British Columbia | 178,594 | 175,680 |
| Canada | -944,707 | -1,154,554 |
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||
| 2020 | ||
|---|---|---|
| (ATDP - AES) / AESTable 3 Footnote 1 | (CEAG - AES) / AESTable 3 Footnote 2 | |
| percent | ||
| Newfoundland and Labrador | 307.6 | 362.6 |
| Prince Edward Island | 23.2 | 20.9 |
| Nova Scotia | 757.4 | 724.4 |
| New Brunswick | -35.9 | -37.5 |
| Quebec | 21.7 | 17.0 |
| Ontario | -2.3 | -4.9 |
| Manitoba | -19.3 | -21.4 |
| Saskatchewan | -24.9 | -26.6 |
| Alberta | 6.4 | 9.8 |
| British Columbia | 43.3 | 42.6 |
| Canada | -5.9 | -7.2 |
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4. Conclusion
Comparing data collected for different purposes is not an easy task. It is extremely difficult to identify precisely what causes the discrepancies at the aggregate level. There will be always discrepancies due to differences in coverage, accounting methods, fiscal years as well as the edit, imputation and estimation methods of the survey, census or administrative data. These differences are often compounded in an estimate, such as net cash income, that is measured residually.