Winnipeg Free Press - PRINT EDITION

Barter: Don't forget taxman

  • Print

From time to time, it is my unwelcome role to be the bearer of bad news. I have had to do this in the past, with things such as reminding business people that golf green fees and memberships are not tax deductible, even when incurred to entertain customers.

Today, my wet blanket extends to barter transactions. Bartering is arranging one of those wonderful agreements between people or organizations, to provide the service of one for those of another, rather than conducting the transaction with cash.

For example, let's say a lawn- care company approaches me to look after my yard. I like the idea, but I'm cheap, so I offer to provide the company owner with financial- planning services instead of a payment in cash.

It turns out he's in the market for advice, and we strike a deal. My lawn gets cut and fertilized all summer, and I provide an agreed number of hours of advice.

Most people would say this is a good arrangement, primarily because it avoids either one of us having to earn the cash, pay income tax and then pay for the service with what we have left.

Those people would be wrong.

If I am providing a service I normally offer for income in exchange for a service that has value, then I still have to claim that value as business income.

In this example, the lawn- care company owner and I would have to claim the value of the reciprocal services on our income tax returns.

Now, since we are in business, we might be able to claim an offsetting deduction for some services. Since I'm registered as a portfolio manager, fees paid to me for investment advice related to non-registered investments are generally deductible.

By the same token, if I were arranging for lawn care at my office, that would likely be a deductible expense. However, lawn care for my house is clearly a personal item, and not deductible.

All of this is a bit of a shame, as we know that transactions without income tax are obviously more attractive for us as individuals. However, when the income tax system does not get its fair share, then the government can't provide the services we demand in return.

When barter transactions such as this are conducted between businesses, the two parties may also be responsible for GST, PST or HST, depending on the province and whether the service is normally taxable under these regimes.

I understand there are barter organizations, where one party can provide goods or services in return for a credit they can then subsequently use for other goods or services. These organizations are under the scrutiny of the Canada Revenue Agency.

Thanks and credit to Cadesky and Associates for their recent reminder posting about barter transactions, which prompted this column.

-- -- --

Speaking of CRA, I have a serious bone to pick with those folks. I filed my tax return early (second week of March) because I was claiming a large refund. Since I had to file on paper, rather than electronically, I was patient, knowing this would take longer.

After eight weeks of silence, though, I started to ask, and was told in early May my return has been set aside for extra attention on April 28. However, on May 29, having heard nothing more, another call to the CRA inquiry department first resulted in a suggestion that my return would be processed June 5. This was changed to saying it would be undergoing four weeks of review and processing starting June 5.

However, a check with a supervisor rendered the shocking news the processing department had actually requested FOUR MONTHS starting June 5 to process my return. Huh?

I sure would love to get a comment from CRA on this one, and will pass on what I hear. In the meantime, make the best possible use of any refund you received.

David Christianson, BA, CFP, RFP, TEP, CIM is a financial planner and adviser with Christianson Wealth Advisors, a vice-president with National Bank Financial Wealth Management, and author of the book Managing the Bull, A No-Nonsense Guide to Personal Finance.

Republished from the Winnipeg Free Press print edition June 6, 2014 B7

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes


  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.


Make text: Larger | Smaller


Total Body Tune-Up: Farmer's Carry

View more like this

Photo Store Gallery

  • STDUP ‚Äì Beautiful West End  begins it's summer of bloom with boulevard s, front yards  and even back lane gardens ,  coming alive with flowers , daisies and poppies  dress up a backyard lane on Camden St near Wolseley Ave  KEN GIGLIOTTI  / WINNIPEG FREE PRESS  /  June 26 2012
  • A goose flys defensively to protect their young Wednesday near Kenaston Blvd and Waverley -See Bryksa 30 Day goose challenge- Day 16 - May 23, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos


Are you concerned about the number of homicides so far this year?

View Results

Ads by Google