CHRISTIAN FARMERS Federation Of Ontario
Christian Farmers Federation of Ontario
Annual Report
2019
Annual Report
TABLE OF CONTENTS
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President’s Address....................................... 4-5 2019 Year in Review...................................... 6-7 Independent Auditor’s Report.................... 8-9 Financial Statements..................................... 10-23
Annual Report
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PRESIDENT’S ADDRESS
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The other day I was walking through the grocery store when I noticed almost an entire row of shelving completely empty. I thought this was odd until I realized it was the toilet paper aisle. With the recent fears surrounding the COVID-19 virus toilet paper has been flying off the shelf at an unprecedented rate, and it made me smile to realize that in times of trouble we Canadians can’t bear the thought of going through it without toilet paper. This past year has felt like a time of trouble for many farmers. There was trouble with the weather, there was trouble with the markets and there was trouble with trade. During these times of trouble for farmers what is the one commodity that we can’t bear to go without? We as the board and staff of Christian Farmers have been working hard over the past year to represent our farmers at a political level. We have worked with our government to address red tape issues to help make Ontario farmers more competitive on a global scale. There is much work still to be done on this front, and we will continue our work in this coming year. We have also seen much progress in the steps our government has taken to protect farmers against trespassing. The new trespassing act along with the animal welfare act, are huge strides in the right direction giving confidence that both farmer and livestock alike will be treated with respect. It will take time to see how effective these two acts will be but we are optimistic that much good will come from them. CFFO has also been heavily involved with the CAP-funded BOSS program. This past year we were able to successfully complete the research stage in this long term project which aims to create a decision support tool to help farmers choose which best management practices are most suited for their farms. This is a longterm project, and we look forward to beginning the next phase this coming year. There is much work that needs to be done in the farming community, and CFFO cannot do it all on our own. By partnering with groups like OMAFRA, commodity groups and other ag organizations, we have been able to accomplish more by working together. In 2019, through these partnerships, we were able to work on projects such as the 4R Nutrient Stewardship program to reduce nutrient run-off, the Timing Matters Peer-toPeer program to encourage fellow farmers to stop winter spreading, and the Ag-Wildlife Conflict Working Group to update the Ontario Wildlife Damage Compensation Program. It can be easy to get caught up in the cares and troubles of farming. While working at CFFO, I have noticed times when our tasks feel impossible and that nothing is going to change. During these times I realize how important it is to have the one commodity I cannot live without; my faith and trust in the Lord. With his help, we can continue to endure during trials and joys knowing He is faithful through it all. This is a much greater comfort than a stockpile of toilet paper.
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Annual Report
6
2019 YEAR IN REVIEW
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ISSUES FACING AGRICULTURE
CFFO worked on a number of issues in 2019, responding both to government consultation calls and to member concerns. These are the highlights:
Land Use Policy Changes
There was a big government focus on land use policy this year, including the Growth Plan for the Greater Golden Horseshoe and the Provincial Policy Statement Review. We argued for long-term preservation of farmland.
Animal Welfare Law
CFFO worked with several other farm organizations and commodity groups to make recommendations about Ontario’s new animal welfare laws and supported the new Provincial Animal Welfare Services (PAWS) Act.
Animal Activism & New Trespassing Laws
CFFO raised concerns regarding on-farm trespassing this year. We supported the proposed Security from Trespass and Protecting Food Safety Act as a necessary measure to protect farmers, their families and farm animals. Further information on our policy work in 2019 is posted on our website.
ADVOCACY
This summer, we welcomed Premier Ford and a number of local MPPs to a farm tour in Lynden. Board members shared CFFO concerns, chiefly trespassing by animal activists, directly to the premier. CFFO Board and staff also met regularly with Minister Hardeman and other MPPs to discuss issues affecting our members, particularly changes to Ontario’s vegetables for processing-marketing regulations.
PARTNERSHIPS
CFFO is extending our reach by working with OMAFRA, commodity groups and other ag organizations on issues of shared concern. In 2019, CFFO participated in a number of working groups, including: • The 4R Nutrient Stewardship Program to reduce nutrient run-off • The Timing Matters Peer-to-Peer program to encourage fellow farmers to stop winter spreading • The Ag-Wildlife Conflict Working Group to update the Ontario Wildlife Damage Compensation Program
CAP-FUNDED BMP PROJECT
CFFO completed the research stage of our CAP-funded BOSS project. This was the first step in a long-term project to design a decision support tool to help farmers select the best combination of BMPs for their farms. Information gathered at the 2019 Policy Tour was included in this research.
ORGANIZATIONAL DEVELOPMENT
The Board began an extensive review of CFFO’s board governance policies in order to maintain organizational health. Review completion is set for early 2020. Former Executive Director Brenda Dyack returned to her policy and research roles at Agri-food Economic Systems at the close of 2019, and the Board is working on leadership transition. CFFO also said farewell to Communications Intern Josh Kraemer in December, and welcomed back Director of Policy & Research Suzanne Armstrong in October.
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FINANCIAL STATEMENTS
To the Directors of Christian Farmers Federation of Ontario
8
Opinion We have audited the financial statements of Christian Farmers Federation of Ontario (Federation des Agriculteurs Chretiens De L’Ontario), which comprise the balance sheet as at December 31, 2019, and the statements of changes in members equity, revenues and expenses and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the organization as at December 31, 2019, and its results of operations and its cash flows forthe year then ended in accordance with accounting standards for notfor-profit organizations. Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the organization in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the organization’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the organization or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the organization’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
INDEPENDENT AUDITOR’S REPORT the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the organization’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting conditions that may cast significant doubt on the organization’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the organization to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the organization to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant deficiencies in internal control that we identify during our audit.
Hamilton, Ontario March 11, 2020
DBK Accounting Professional Corporation Authorized to practice public accounting by the Chartered Professional Accountants of Ontario
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BALANCE SHEET AS AT DECEMBER 31, 2019 ASSETS
2019
2018
CURRENT ASSETS Cash
$
Accounts receivable
34,682
$
192,074
81,856
-
Prepaid expenses
6,776
8,803
Government remittances receivable
5,069
8,672
128,383
209,549
30,000
115,416
Restricted Investments
104,222
-
Investments (Note 3)
501,689
311,578
Capital assets (Note 4)
531,090
556,964
Restricted cash
$
1,325,384
$
1,193,507
$
105,117
$
29,545
LIABILITY CURRENT LIABILITY Accounts payable & accrued liabilities
MEMBERS’ EQUITY Invested in Capital Assets
531,090
556,964
General Reserve
104,222
95,416
Unrestricted (available for general purposes)
554,955
491,582
30,000
20,000
1,220,267
1,163,962
Capital Reserve $
APPROVED ON BEHALF OF THE BOARD: Clarence Nywening, CFFO President John Bos, CFFO Treasurer
See accompanying notes to the financial statements
10
1,325,384
$
1,193,507
STATEMENT OF CHANGES IN MEMBERS’ EQUITY FOR THE YEAR ENDED DECEMBER 31, 2019 Invested in Capital Assets Balance, beginning of year
$
Excess (deficiency) of revenues over expenses Investment in Capital Assets Interfund transfer Balance, end of year
$
556,964
General Reserve
$
95,416
Unrestricted
(available for general purposes) $
491,582 $
Capital Reserve
Total 2019
20,000
$
1,163,962
Total 2018
$
1,018,114
(29,168)
-
85,473
-
56,305
145,848
3,294
-
(3,294)
-
-
-
-
8,806
(18,806)
10,000
-
-
554,955 $
30,000
531,090
$
104,222
$
$
1,220,267
$
1,163,962
See accompanying notes to the financial statements
11
STATEMENT OF REVENUES & EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2019 REVENUES Farm organization funding fees (Notes 5)
2019 $
Grants
880,614
2018 $
889,875
148,075
12,144
Interest Income
10,359
10,240
Sponsorships
27,500
21,000
Miscellaneous Income
19,534
788
Membership fees
5,625
5,145
Agri Day
4,114
3,311
1,095,821
942,503
Administrative, Schedule 1
654,126
428,901
Provincial activities, Schedule 1
182,349
168,144
Qualified districts (local affiliates), Schedule 1
90,928
92,821
District activities, Schedule 1
82,945
74,952
1,010,348
764,818
85,473
177,685
29,168
31,837
EXPENSES
Excess of revenues over expenses before other item Other expense Amortization Excess of revenues over expenses for the year
See accompanying notes to the financial statements
12
$
56,305
$
145,848
SCHEDULE OF EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2019 ADMINISTRATIVE Bank charges and interest
2019 $
Equipment rentals and maintenance
1,013
2018 $
1,014
9,276
10,560
41,755
42,211
3,361
3,024
-
4,189
Office and printing supplies
9,560
9,702
Postage and courier
4,905
4,307
33,239
11,236
Property taxes
6,105
6,207
Repairs and maintenance
6,983
7,467
Research
175,666
10,425
Salaries and benefits
345,975
303,065
Staff travel and expenses
7,018
7,394
Telephone
6,456
5,377
Utilities
2,814
2,723
Farm business registration administration fees Insurance New opportunities
Professional and consulting fees
$ 654,126
$
428,901
$
$
8,775
PROVINCIAL ACTIVITIES AGM and leadership summit Annual convention (Agri Day)
6,726 23,541
16,934
106,271
101,056
Farm community activities
28,612
27,452
Farm media
17,199
13,927
Board and committee expenses
$ 182,349
$
168,144
See accompanying notes to the financial statements
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SCHEDULE OF EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2019 CONTINUED
QUALIFIED DISTRICTS (LOCAL AFFILIATES) Funding to district associations
2019
2018
$
90,928
$
92,821
$
25,237
$
16,633
DISTRICT ACTIVITIES Farm media/newsletter Meeting and travel expenses Member recruitment Promotion and advertising $
See accompanying notes to the financial statements
14
25,091
26,828
-
9,556
32,617
212,935
82,945
$
74,952
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2019 2019
2018
OPERATING ACTIVITIES Excess of revenues over expenses
$
56,305
$
145,848
Adjustments for Amortization
29,168
31,837
85,473
177,685
(81,856)
8,811
Prepaid expenses
2,027
126
Government remittances receivable
3,603
(6,609)
75,572
(11,971)
84,819
168,042
(324,333)
(208,149)
(3,294)
(11,976)
(327,627)
(220,125)
(242,808)
(52,083)
307,490
359,573
Net change in non-cash working capital items Accounts receivable
Accounts payable and accrued liabilities INVESTING ACTIVITIES Purchase of investments Purchase of capital assets
Decrease in cash Cash, beginning of year Cash, end of year
$
64,682
$
307,490
$
34,682
$
192.074
CASH CONSISTS OF: Cash Restricted cash
30,000 $
64,682
115,416 $
307,490
See accompanying notes to the financial statements
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 1. PURPOSE OF THE ORGANIZATION The organization was founded on March 6, 1954, as a federation of local associations of Christian family farmers in Ontario. It was incorporated as a corporation, without share capital, by letters patent under the Ontario Corporations Act on June 26, 1991. The corporation is a non-profit organization operating to promote and apply Christian ideas and principles to the solution of agricultural problems, and to increase the knowledge of members with respect to their responsibilities and opportunities. The corporation is exempt from payment of income taxes as provided under the Income Tax Act.
2. SIGNIFICANT ACCOUNTING POLICIES These financial statements are prepared in accordance with accounting standards for not-for-profit organizations. The significant accounting policies are detailed as follows:
(a) Capital assets Capital assets are recorded at cost. The organization provides for amortization using the declining balance method at rates designed to amortize the cost of the capital assets over their estimated useful lives. The annual amortization rates are as follows:
Buildings
4%
Furniture and fixtures
Computer equipment 40%
20%
(b) Investments Investments are recorded at fair value. Unrealized gains and losses as a result of fair value adjustments at year end are recognized in net assets.
(c) Revenue recognition The organization follows the deferral method of accounting for contributions and fees. Farm organization funding fees, membership fees, convention fees, and sponsor fees are recognized as revenue in the year the corresponding services are provided. Unrestricted contributions and grants are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured.
(d) Use of Estimates The preparation of financial statements in conformity with accounting standards for not-for-profit organizations requires management to make estimates and assumptions that affect the reported amounts of assets
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 2. SIGNIFICANT ACCOUNTING POLICIES CONTINUED and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. By their nature, these estimates are subject to measurement uncertainty. The effect of changes in such estimates on the financial statements in future periods could be significant. Accounts specifically affected by estimates in these financial statements are amortization of property, plant and equipment and the amounts set up in accrued liabilities.
(e) Contributed Services Because the hours of service by volunteers are not normally purchased by the organization, and the difficulty in determining their fair market value, contributed services are not recognized in the financial statements.
(f) Financial Instruments The organization initially measures its financial assets and financial liabilities at fair value adjusted by, in the case of a financial instrument that will not be measured subsequently at fair value, the amount of transaction costs directly attributable to the instrument. The organization subsequently measures all its financial assets and financial liabilities at amortized cost. Financial assets measured at amortized cost include cash, government remittances, and accounts receivable. Financial liabilities measured at amortized cost include accounts payable and accrued liabilities. At the end of reporting period, the organization assesses whether there are any indications that a financial asset may be impaired. When there is an indication of impairment, the carrying amount of the asset is reduced, and the amount of the reduction is recognized as an impairment loss in the statement of revenues and expenses.
3. INVESTMENTS Christian Stewardship Services, revocable deposit, 2 year term with a range of 4% - 6% interest rates, due March 2021.
2019
$
501,689
2018
$
104,222 $
605,911
311,578 -
$
311,578
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 4. CAPITAL ASSETS COST
Land
$
Buildings
ACCUMULATED AMORTIZATION
98,881
$
-
2019 Net
$
98,881
2018 Net
$
98,881
555,347
131,900
423,447
445,661
Furniture and fixtures
37,932
30,932
7,000
8,762
Computer equipment
14,749
12,987
1,762
3,660
175,819
531,090
$
706,909
$
$
556,964
5. FARM ORGANIZATION FUNDING FEES Farm organizations are able to apply for a refund of their fees once they have been accepted. The refunds that were applied for are netted against the revenue. The details are as follows: 2019 Farm organization funding fees
$
Refunds
927,864
2018 $
(47,250) $
880,614
938,475 (48,600)
$
889,875
6. RELATED PARTY TRANSACTIONS Executive board members are paid honorariums for the days that they attend board meetings, other meetings related to the organization’s mandate, management services, and any other activities that are board related. There are eight board members with equal voting power for each member. The executive board members review and approve all the changes to the organization’s policies, financial’s, and budgets, and any major changes in activities. These transactions are based on the agreed upon honorarium amount by the board. Management estimates the fair market value of these activities would be considered to be $122,700 ($120,200 - 2018). Honorariums paid to board members
2019 $
61,350
2018 $
60,100
7. FINANCIAL INSTRUMENTS Transactions in financial instruments may result in an entity assuming or transferring to another party one or more of the financial risks described below. The required disclosures provide information that assists users of financial statements in assessing the extent of risk related financial instruments.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 4. FINANCIAL INSTRUMENTS CONTINUED (a) Liquidity risk Liquidity risk arises through having excess financial obligations over available financial assets at any point in time. The organization’s objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet its liquidity requirements at any point in time. The organization achieves this by attempting to maintain sufficient cash and cash equivalents.
8. COMMITMENTS (a) Payments to Union des Cultivateurs Franco-Ontariens Under an agreement with the Minister of Agriculture, Food, and Rural Affairs (OMAFRA), effective January 1, 2008, the organization agrees to pay to Union Des Cultivateurs Franco-Ontariens (UCFO), 1.5% of their net revenue from farm organization funding fees from the prior year. The amount paid in 2019 was $13,357. This agreement shall terminate only if the Agriculture, Food, and Rural Affairs Tribunal removes the eligibility of the UCFO for special funding, all parties mutually agree to terminate the agreement, or the UCFO has been granted accreditation by the Tribunal.
(b) Administration costs of farm business registration program Under an agreement with the Minister of Agriculture, Food, and Rural Affairs, the organization has agreed to pay Agricorp $10.12 for each registration to administer the Farm Business Registration Program in 2019. This agreement can be terminated by either party by giving prior written notice no later than May 31 of any calendar year that the notifying party intends to terminate the agreement.
(c) Other commitments Under the terms of various lease agreements and other contracts, the organization will be required to make the following payments:
2020
$
69,382
2021
66,650
2022
5,897
2023 2024 Subsequent years $
5,591 5,591 1,864 154,885
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 9. COMPARATIVE FIGURES The financial statements have been reclassified, where applicable, to conform to the presentation used in the current year. The changes do not affect revenue over expenses.
10. RESTRICTED ASSETS AND MEMBERS’ EQUITY In prior years, the organization established a reserve fund for financing future major expenses, or possible operating deficits. The reserve amount has been set at 1% of actual farm business registration fees on an annual basis, which amount to the following: 2019 Restricted fund reserve
$
8,806
2018 $
8,899
The reserve fund balance is as follows: 2019 Reserve Fund equity
$
104,222
2018 $
95,416
In 2019, the organization elected to transfer $10,000 to the capital reserve fund from the general fund. In 2018, the organization elected to transfer $10,000 to the capital reserve fund from the general fund.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 11. FARM ORGANIZATION FUNDING FEES During the year, the organization received farm organization funding fees. Of these farming businesses, 5.09% requested and received refunds (2018 - 5.17%). In addition to the fees received from 3,914 farming businesses, the organization received 25 (2018 - 23) membership fees from non-registered farming businesses. 2019 Number
Funding fees qualified districts (local affiliates) Funding fees non-qualified districts (unorganized regions)
Refunds qualified districts (local affiliates) Refunds non-qualified districts (unorganized regions)
2019 Amount
2018 Number
$
816,975
3,656
284 3,915
$
63,639 880,614
185
$
3,631
25 210
$
2018 Amount
$
822,600
299 3,955
$
67,275 889,875
41,625
195
$
38,220
5,625
17
47,250
213
4,315 $
42,535
21
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019
12. DISTRICT EXPENSES Contributions have been made directly to 21 districts. Section 5(4) of the Farm Registration and Farm Organizations Funding Act, 1993 Ontario Regulation 723/93, requires the following of the qualified districts (local affiliates): (a) it represents at least 10 farming businesses as described in paragraph 5 of the Act. (b) persons sitting on its board of directors have been elected, except for persons who were appointed to fill a vacancy or in other exceptional circumstances.; (c) has an annual general meeting; and (d) is entitled to send a representative to any meeting of the farm organization to which representatives of local affiliates are invited. Non-qualified districts (unorganized regions) fall short of these four criteria in one way or another. Direct contributions of $90,928 were made to the following qualified districts (local affiliates): Chatham-Kent-Essex, Dufferin-Wellington, East Central, Elgin, Grey-Bruce, Huron, Haldimand-Norfolk, Lambton, Middlesex, Niagara, Northeastern Ontario, Oxford, Quinte, Rainy River, Renfrew-Lanark, Simcoe County, St. Lawrence-Ottawa Valley, Thunder Bay, Wellington, and Wentworth-Brant. These districts have met the standards needed to be considered qualified districts. No direct contributions were made to non-qualified districts (unorganized regions). The non-qualified district was Perth. These districts did not meet the standards needed to be considered qualified districts. Direct contributions of $90,928 were made to the qualified districts (local affiliates). As stated by the Farm Registration and Farm Organizations Funding Act, 1993 Ontario Regulation 723/93, Section 5(2)7, these expenses must equal 10% of the part of its gross revenue for any given year that is received from payments made under section 21 of the Act, and is determined before taxes, excluding any refunds that may be paid under subsection 21(8) of the Act. The contributions that were made to the qualified districts met this criteria.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 13. ACCOUNTING AND AUDITING STANDARDS As indicated in the Independent Auditor’s Report, these financial statements have been prepared in accordance with Canadian accounting standards for not-for-profit organizations, and the audit was conducted in accordance with Canadian generally accepted auditing standards. These standards are in compliance with the CPA (Chartered Professional Accountants) Canada Handbook.
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CHRISTIAN FARMERS Federation Of Ontario
Christian Farmers Federation of Ontario
2019