by SUSAN MANN
Several farmers are finding themselves even deeper in debt after an Ontario Superior Court judge ruled against their challenge of Agricorp’s ability to recover debts on overpayments more than two years old.
Last month, Ontario Superior Court Justice Marc L. Labrosse ruled that the provincial Crown corporation which administers farm risk management programs can recover debts from program overpayments that are more than two years old.
Even though the decision handed down Aug. 6 doesn’t surprise Renfrew County cow-calf beef and cash crop farmer Peter Tippins he was disappointed by it. “When you’re dealing with the government you don’t very often come out on top.” But “I don’t believe that government should be able to do whatever they like.”
Tippins was the representative farmer in the case that challenged Agricorp’s ability to recover government program overpayments from payments made, in some cases, to farmers 10 years ago. In all, 80 farmers were involved in the challenge.
Tippins says he really didn’t expect to win the case but he participated because he wanted to show “that not everybody likes to sit back and just say nothing.”
The hearing was held in May in Ottawa. The group’s lawyer, Don Good, argued Agricorp as an agent of the Crown is bound by the same two-year time limit under the Limitations Act that private companies have for recovering debt. The Crown, on the other hand, is exempt from the time limit and has an unlimited time to collect money it is owed.
Good couldn’t be reached for comment.
Labrosse says in his ruling the sole matter presented to the court was whether Agricorp, as a Crown agent, benefits from the exemption to the two-year time limit for debt recovery in the Act. He says in his opinion Agricorp is exempt from the time limit “and that it is not subject to the basic limitation period of two years under the Act for the commencement of a proceeding to recover a debt.”
The farmers’ group is also on the hook for $4,500 in court costs. Tippins says Good collected money from each of the participants and that money will go toward paying the costs.
Stephanie Charest, Agricorp spokesperson, says the judge ruled “all debts to the Crown are collectable regardless of when the debt was incurred.”
In 2012 Agricorp changed the way it recovers program overpayments to farmers.
Historically, overpayments were retrieved from future program payments but if a farmer didn’t participate in the same or similar programs in future years “Agricorp did not actively seek reimbursement,” the decision says.
An Agricorp factsheet about payment recovery on its website says the overpayments could have occurred because of incomplete program applications, processing errors, changes to farm operations and the nature of programs providing advance payments to financially distressed farmers.
In April 2012, Agricorp sent letters to 4,499 farmers telling them they had a program overpayment and they had to pay it back in three years. Collectively, the farmers owed $30.8 million.
The Crown corporation began adding interest in 2013.
By January 2014, nearly three quarters of the farmers owing money had made repayment arrangements. The arrangements are expected to generate $19.6 million, the decision says.
Tippins says Agricorp told him he owes slightly more than $18,000 in an overpayment from the former Canadian Agricultural Income Stabilization (CAIS) program. He received a payment from the program in 2007 but it wasn’t until 2012 that he was told he owed money back from it. The current AgriStability program has replaced CAIS. The amount he owes has grown to about $19,000 with interest added in.
The most troublesome aspect of the situation is every spring Agricorp sent out an invoice for the fee to participate in the program “but never on that invoice did it say I owed this extra money,” he says. “I almost feel like all our ancestors went to war for nothing. That’s why they went to war so governments couldn’t step on you like this.”
Now that the decision has been released Tippins says he won’t be joining any appeal if there is one, and he is making arrangements to repay the money. He doesn’t know if there will be an appeal. BF
Comments
There is I am sure much worse things happening with in Gov in this province .
Just the fact that Agricorp would even think it to be any way even near being accountable by putting "the overpayments could have occured because of incomplete program applications, processing errors, changes to farm operations and the nature of programs providing advanced payments to financially distressed farmers." is all the more reason to call for an audit of Agricorp and OMAFRA . One would have to question if there were over payments there were also people who did not recieve the amount/payment that they were entitled to receive because of the same statement that appears on the website . Where are the farm leaders that are to be representing these farmers ? Could the Government/Agricorp change the rules any time they want ? What else is wrong within Agricorp or it's parent Gov group OMAFRA ?
Absolutely your right actually in that time period they would be at the max of there budget so if there was over payment they owe that amount to someone else or thy where lying about under payment
Let's say a farmer received a payment from AgriCorp in late 2004, recorded it as income that year (on the cash system), died in 2005, had his/her estate settled in 2007, and now gets a notice of a requirement to repay a debt neither he/she nor the executor(s) even knew existed until the demand for repayment came in.
As it stands, executors are personally responsible for all debts of an estate, and if the money has been long-since disbursed to the estate's designated beneficiaries, the executors, assuming they are still alive themselves, would normally be required to repay this money out of their own pockets - not an appealing scenario to a family friend who is serving as an executor, but who is not a beneficiary.
On the other hand, I've also seen a (federal) government pay-equity cheque issued to a client who had been dead for over ten years -thankfully it was able to be cashed because a living relative had almost the same name, and, yes, I made sure that the living relative did report this income on his/her own income tax return for the year when the cheque was finally issued.
Stephen Thompson, Clinton ON
Seems like fraud to me. Counseling your client to claim it on their return does not make it right - it is just a second wrong. You should be contacted.
All I can say is two wrongs don't make a right . You should also be responsible for your advice in the wrong . You DO know better and should pay .
The primary unpalatable alternative for me would have been to re-open an estate which had been closed for over ten years, and file an income tax return for the estate for the year in which the income had been received.
However, since my client's father was his sole beneficiary, and since the father cashed the cheque, it was rather-moot whether the estate claimed the income, or the father, because, in effect, they were exactly the same entity.
The only two mistakes I could have made, and didn't, would have been to:
(1) advise that nobody claim this income.
(2) listen to advice (and/or admonitions) from anonymous yokels on sites like this
However, the points I was trying to make are that:
(A) re-opening an estate a decade after it was closed, for the sole purpose of paying back money owing to Agricorp, can be:
(i) a horribly-expensive proposition
(ii) personally draining on the executors (and/or their survivors)
(iii) an income tax challenge because this repayment is an expense which, if it
isn't, and can't be, offset by any income, and if the statute of limitations
prevents going back to adjust incomes reported in 2004, the estate's
executor's will, in effect, have been responsible for having paid
income tax on money the deceased never got to keep.
(B) in the same way government is compelled to, and does, make payments well-over a decade after the fact, it is equally-entitled to collect on equally long-standing debts owing to them - thereby making it silly, if not inherently-futile, for these farmers to have wasted their money on this lawsuit against the government in the first place.
(C) Notwithstanding the foolishness of those farmers who launched this inherently-futile lawsuit, the greater fool was the then government of Ontario which, for political gain alone, issued these payments in the first place.
Stephen Thompson, Clinton ON
Just curious Mr. Thompson. You taught economics at a college level. You stated you were a expert witness. You are a accountant. Yet you knowingly advised a client to cash a cheque that was in another person's name and then covered it off by transferring the tax implications in someone elses' tax return.
You are pointing out some complex issues arising from the overpayments.
One question. How many clients of yours have to repay Agricorp for the over-payments mentioned in the story? What part of the $30M is coming from your clients? Any? None?
There is nothing at all "complex" about this matter.
It was the governments fault in the first place that the payment was ten years late, but at the end of the day, the taxes were paid.
What's to debate?
Raube Beuerman
Again you missed the point or either intentional deflected the question.
Thompson spells out a complex problem in regards to the overpayments that farmers must repay. By his own statements it leads one to believe that he is a position having to deal with the problem at hand. So the question was, how many of Thompson's clients have to repay Agricorp? Then by extension, why does he have clients with overpayment problems? How is it the governments' fault if the applications were incorrect Beurman?
Your right its pretty simple. Stephen Thompson advised someone to cash a cheque that was not theirs to cash. Its fraud. The anonymous can see that quite clearly
The cheque was cashed long-before I appeared on the scene - furthermore, the option I chose is standard operating procedure.
Every experienced tax practitioner and lawyer knows that, in matters like this, the Canada Revenue Agency is most-understanding of the purely-practical wish, especially in small estates, to avoid needless administrative expense, and therefore, really doesn't care as long as the people who actually receive the money claim the income.
It is completely idiotic to re-open an long-settled estate for a $500 income item, file a tax return, pay several hundred dollars in tax, pay several hundred more in accounting and legal fees, and thereby ending up with the estate being in a net-negative position, when a $50 letter from the estate's lawyer to the beneficiaries advising them that they have $500 in income to report (less the $50 carrying cost incurred by the lawyer) serves exactly the same purpose and gives the beneficiaries $450 more (before tax) than they would have otherwise received.
To return to the original, and seemingly long-lost point - if/when Agricorp demands repayment from a long-closed estate, it is the personal responsibility of the exectors to make that payment even if they were never beneficiaries of that estate in the first place- that is the situation/problem Agricorp has created by starting to enforce their claim at an unreasonably late date.
Stephen Thompson, Clinton ON
Still won't answer the question, will you Thompson. How many of your clients need to repay Agricorp? It sounds like you do have clients in that position because you are publicly announcing complex issues around the repayment.
I'd have to go through everybody's records, but I probably had about a dozen people who were required to repay Agricorp in cash - most of the people who received an advance in late 2004 saw it clawed back from the benefits they received in subsequent years from other programs, and, therefore, never really noticed that they were repaying anything.
None of the cash repayments was from an estate, thank goodness, but given the time lag between disbursement and the call for repayment, there easily could have been one, or even more.
As far as I know, those of my clients who owed money simply went ahead and repaid it, as so they should.
In any event, this entire "movie" was a completely brain-dead effort by various Ontario governments and it's hard to say who was the greater fool - the government which authorized and issued the payments in the first place, or the government which waited such an unreasonably long time to decide to enforce repayment.
Stephen Thompson, Clinton ON
So the amount to be gained was perhaps $250 after tax or so.
Not worth committing a fraud for $250. And wrong is wrong, regardless of the amount.
The easy and honest choice would be to not illegally cash a dead man's cheque.
Perhaps the most interesting thing about this string is that it shows that the signed, especially on this site, are most often the idiots.
"at the end of the day, the taxes were paid". But the taxes were not paid by the person that was entitled to the money. Thompson knowingly counseled a client to partake in tax evasion. As he admitted publicly, it was the easy route. Not the right way to account for income, the easy way to deal with income. Since you agree because you don't think its a debatable topic, obviously you agree tax evasion is ok when it is convenient to do so. Small wonder Agricorp is clawing back tens of millions in overpayment!
Not one penny of tax was evaded by anyone - period. The estate was one and the same as the deceased's father who claimed the income and paid the tax.
No wonder people don't sign their names to the really stupid postings n this site.
Stephen Thompson, Clinton ON
The tax treatment is not the issue, taxes were paid, but, to say it again - the unpalatable, expensive but only LEGAL alternative was the only correct, ethical and acceptable choice.
You can try and rationalize it away - but it is impossible to deny the FACT that the cheque was fraudulently cashed. I suspect you will be in denial anyway.
Again, if you strip away all the self-delusional, self-justifying crap, everyone should recognize that "thankfully it was able to be cashed because a living relative had almost the same name" really means "thankfully we were able to fraudulently cash the dead man's cheque"
Even if, as you later claimed ......, the beneficiary was the same, it got there incorrectly and illegally.
It was fraud. Pure, simple and undeniable.
The unpalatable, expensive but LEGAL alternative was the only correct and acceptable choice.
If you strip away all the self-delusional, self-justifying crap, everyone should recognize that "thankfully it was able to be cashed because a living relative had almost the same name" really means "thankfully we were able to fraudulently cash the dead man's cheque"
Even, as you now claim......, the beneficiary was the same, it got there incorrectly.
It was fraud. Pure and simple.
Yes, the legal alternative should have been chosen, even if it is was unpalatable.
I wonder if this public admission of a lack of ethics will be bad for business or earmark his work for very frequent Revenue Canada audits? And what about the OPP?
The more revolting thing to me is the fact of Gov making payments to dead people and the fact that gov can not seem to manage money . An audit should be done and heads should roll . Accountability should be job one with any gov . What we have here people is a huge admission of poor management of public funds and this is only in one small area under gov control .
Given the fact that after many years, the P1 P2 inventory valuation methodology was finally reversed to reflect the correct inventory, there should be a class action suit to get the shortfall in payments made right.
A few years ago there was a huge outcry for the audit of Agricorp. That audit was suppose to not only examine a financial audit but also an operational audit. During some part of this fiasco Wynn was Ag minister. How were regular quarterly or even semi annually audits found to be no less than satisfactory? Were there any bureaucrat firings for applications approved that did not meet the criteria for approval? How many annual audits were pasted as satisfactory only to be now deemed as incorrect years later? If the criteria changed mid stream at who’s direction and instruction did this happen?
When we were insisting on an audit in the past we were assured it was not necessary as regular audits were a part of every day life at Agricorp.
The flow chart of communications would indicate Agricorp would be under certain scrutiny of OMAFRA and OMAFRA reports to the ag minister who then reports to cabinet. When discussing the need for audits one can not exclude or overlook the reporting chain of command to find the week link(operational audit). Failures of maintaining generally accepted accounting principals were part a parcel of the failures of Agricorps outcome of the last audit but these new findings made it crystal clear the past audits did not go far enough to find and correct the problem or prevent the incompetence truth from surfacing again so soon.
There is little respect or confidence instilled by a ruling of a court extending the statute of limitations to a corp. working for the same crown as the courts. Since Agricorp is a NGO will the courts recognize this precedent setting extension of the statute of limitations to be extended to the less than acceptable P1 P2 accounting errors of the past or worse still the likes of Hwy 407 accounting to have an extended statute of limitations?
Wynn and the liberals have a well documented reputation for being a failure with numbers, truth and honesty about anything they and their courts can bully through with a majority.
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