Learn about tax credits for farmers who donate agricultural products to eligible community food programs in Ontario

An eligible person that donates agricultural products to eligible community food programs in Ontario, including food banks, may be able to claim a tax credit, in addition to the charitable donation tax credit.

The Local Food Act, 2013 introduced a new non-refundable income tax credit for farmers who donate agricultural products to eligible community food programs in Ontario, including food banks. The credit is worth 25 per cent of the fair market value of the agricultural products donated and can be claimed for donations made on or after January 1, 2014.

Qualifying donations

A qualifying donation is:

  • a donation of one or more agricultural products produced in Ontario
  • made to an eligible community food program in Ontario on or after January 1, 2014 by an eligible person.

An eligible person means:

  • an individual (or his or her spouse or common-law partner), or sole proprietorship, who carries on the business of farming and resides in Ontario on December 31 of the tax year, or
  • a corporation that carries on the business of farming in Ontario.

A trust is not entitled to claim this tax credit.

An agricultural product means:

  • meat or meat by products, eggs or dairy products, fish, fruits, vegetables, grains, pulses, herbs, honey, maple syrup, mushrooms, nuts, or anything else that is grown, raised or harvested on a farm, and that may be legally sold, distributed or offered for sale at a place other than the premises of its producer as food, and
  • any of the items listed above that was processed, if it was processed no more than to the extent necessary for the product to be legally sold at a place other than the premises of the producer.

An agricultural product also includes live animals suited for and intended to be processed as food.

An eligible community food program is a person or entity:

  • that is engaged in the distribution of food to the public without charge in Ontario, including as a food bank, and
  • that is registered as a charity under the Income Tax Act (Canada).

An eligible community food program must also be a person or entity:

  • whose primary purpose for distributing food to the public without charge in Ontario is to provide relief to the poor, or
  • that oversees or operates one or more student nutrition programs that provide meals or snacks to students enrolled in an elementary or secondary school or an alternative learning program.

Calculating the tax credit

For individuals or sole proprietorships, the amount of the tax credit depends on how much you give and is calculated as:

  • 25 per cent of the value of the qualifying donations. You must also claim the qualifying donations under the charitable donations tax credit in the same year.

For corporations, the tax credit is equal to 25 per cent of the corporation's qualifying donations for the tax years ending after December 31, 2013, that the corporation claimed on Schedule 2, Charitable Donations and Gifts.

How do I get the credit?

If you are an individual or a sole proprietor:

Claim the credit by filing a completed Form ON428, Ontario Tax, with your personal income tax and benefit return (T1 return).

If you file your return electronically, you need to keep all your receipts and documents for six years. If you file a paper return, attach all official receipts for your qualifying donations to your paper return.

Get your General Income Tax and Benefit package from the Canada Revenue Agency

If you are a corporation:

Claim the credit by filing a completed Schedule 2, Charitable Donations and Gifts, with your corporation income tax return (T2 return).

Note: It is important to file your return as a completed package. Incomplete returns generate delays in processing.

Receipts do not have to be attached to your corporate income tax return. Keep all official receipts in case you are asked for them later during an audit.

Get your Corporation Income Tax return package from the Canada Revenue Agency

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Ontario Ministry of Agriculture, Food and Rural Affairs

Canada Revenue Agency – Claiming charitable tax credits

Ontario Regulation 153/14 made under the Taxation Act, 2007 for the Community Food Program Donation Tax Credit for Farmers

Did you know?

Find out about benefit programs you may be eligible for, or calculate your tax credits.

Do you need help completing your return?

If you are unable to prepare your return yourself, the Community Volunteer Income Tax Program may be able to help you.

Frequently Asked Questions

These questions and answers provide general information and are not intended to be a substitute for the legislation contained in the Local Food Act, 2013, or the Taxation Act, 2007, and its related Regulations.

Has the tax credit for farmers who donate to food banks come into effect?

Yes, legislation for the community food program donation tax credit is in force. Those who are eligible may claim the credit for qualifying donations made on or after January 1, 2014.

When can a farmer start claiming the tax credit?

Farmers may claim the credit for qualifying donations made in 2014 or later. Eligible individuals and corporations may claim the credit on their income tax returns, beginning with returns for the 2014 taxation year.

Where can I get additional details on eligibility or the process for claiming the tax credit?

You may visit the Ontario Ministry of Finance website for more information about the credit, including details on qualifying donations and community food programs, and how to claim the tax credit on the T1 General Income Tax and Benefit Return or the T2 Corporation Income Tax return, as applicable.

You may visit the Canada Revenue Agency website for more information about how to claim charitable donations.

What groups can I donate to if I want to get this tax credit for my donation?

Donations must be made to an eligible community food program.

To be an eligible community food program, an organization has to be a registered charity that distributes food to the public without charge in Ontario. The organization must distribute free food mainly for the purpose of providing relief to the poor or it must run or act as a lead agency for one or more student nutrition programs.

The Canada Revenue Agency has a list of Canadian registered charities.

Do eligible community food programs (e.g., food banks) have to issue separate receipts for this credit?

No, the receipt currently issued for a charitable donation of goods may also be used for this credit, if the donation qualifies.

What are eligible community food programs (e.g., food banks) required to do when issuing a tax receipt?

The eligible community food programs should follow the same requirements that they follow when issuing receipts for any charitable donation of goods. The receipt must include a description of the goods donated, which should be sufficiently detailed that farmers and tax administrators can determine whether all or some of the goods donated are agricultural products eligible for this tax credit.

A registered charity is required to maintain adequate books and records, including copies of official donation receipts.

How should community food programs determine what the donated products are worth?

Eligible community food programs should use the fair market value of the property donated. The fair market value is usually the highest dollar value you can get for that property in an open and unrestricted wholesale or retail market, as applicable, between a willing buyer and a willing seller who are acting independently of each other. The value should be based on the quantity and quality of the property and will have to be determined in each particular case.

Canada Revenue Agency provides general guidelines on determining fair market value.

Generally, if the fair market value of the property is less than $1,000, a member of the registered charity, or another individual, with sufficient knowledge of the donated property may determine its value.

The person who determines the fair market value of the item should be competent and qualified to evaluate the particular property being donated.

Are there resources available to assist with determining 'fair market value'?

The following links may assist community food programs with determining fair market value for some agricultural products.

Please note that these links are only meant to guide assessment. If a community food program needs to verify the value of a donated item, it may wish to seek the assistance of knowledgeable parties unrelated to the donor or the charity, such as other farmers, retail stores or wholesalers.

Statistics Canada provides average retail prices of selected produce on a monthly basis. Produce included are:

  • meat (round steak, sirloin steak, prime rib roast, blade roast, stewing beef, pork chops, chicken, bacon)
  • dairy and eggs (homogenized milk, partly skimmed milk, butter, eggs)
  • fruits (apples)
  • vegetables (carrots, celery, mushrooms, onions, potatoes).

The Ontario Ministry of Agriculture, Food and Rural Affairs provides the average wholesale prices of fruits and vegetables on a yearly basis. Since these are wholesale prices, the fair market value price may be higher if the quantity of goods donated would normally be exchanged in a retail (rather than wholesale) transaction. Produce included are:

  • fruits (apples, apricots, blueberries, watermelons, melons, cherries, grapes, nectarines, peaches, pears, plums and prunes, raspberries, strawberries)
  • vegetables (asparagus, beans, beets, broccoli, brussel sprouts, cabbage, carrots, cauliflower, celery, corn, sweet cucumbers, garlic, leeks, lettuce, mushrooms, onions, parsley, parsnips, peas, green peppers, pumpkins, squash and zucchini, radishes, rhubarb, rutabagas, spinach, tomatoes).

Canada Revenue Agency provides general guidelines on determining fair market value.

What agricultural products are eligible for the tax credit?

For this tax credit, an agricultural product includes meat or meat by-products, eggs or dairy products, fish, fruits, vegetables, grains, pulses, herbs, honey, maple syrup, mushrooms, nuts or anything else that is grown, raised or harvested on a farm. Agricultural products only include items that may legally be sold, distributed or offered for sale at a place other than the premises of the producer as food or drink intended for human consumption. Animals which are suitable and intended to be processed as food are also eligible.

For more information about agricultural products, contact the Ministry of Agriculture, Food and Rural Affairs at ag.info.omafra@ontario.ca.

To what extent can I process the food I am donating?

An 'agricultural product' can be processed no more than to the extent necessary so that, in Ontario, the item could legally be sold, distributed or offered for sale at a place other than the premises of the producer of the item as food or drink intended for human consumption. Processed products such as pies, sausages, beef jerky, pickles, and preserves are not eligible.

For more information about agricultural products, contact the Ministry of Agriculture, Food and Rural Affairs at ag.info.omafra@ontario.ca.

Why can't I receive a tax credit for products I make on my farm (e.g., apple pies made with apples from my farm)? To what extent can I process the food I am donating?

The community food program donation tax credit for farmers is available for donations of certain agricultural products to community food programs.

To qualify for the credit a donated agricultural product can only be processed to the extent necessary so that, in Ontario, it could legally be sold, distributed or offered for sale at a place other than the premises of the producer of the item as food or drink intended for human consumption. As a result, some items that are produced on farm may not qualify for the credit.

I'm part of a group of farmers that donated agricultural products to a community food program. Can I claim the credit for my part of the donation?

To claim the credit, you must have received a receipt showing your portion of the goods that were donated by the group.

To issue a receipt for a charitable donation, a charity must be able to identify the actual donor or donors; if a group donation is made without detailed donor information, the charity may not be able to issue separate receipts.

A food bank has offered to give me a receipt for the value of live animals that I have donated (or plan to donate), not for the value of meat from those animals. Is this the correct value to claim for the credit?

The community food program donation tax credit for farmers is available for donations of certain agricultural products to community food programs.

Live animals that are suitable and intended to be processed as food are agricultural products for the purpose of the credit. Therefore, when calculating the credit that you claim, you can include the value of the live animals that you donated if this is the value that is shown on the receipt for the donation.

Who can I contact to get more information?

You can contact the Ontario Ministry of Agriculture, Food and Rural Affairs and the Ontario Ministry of Finance.