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President’s Message

Financial statements

CHRISTIAN FARMERS Federation Of Ontario

Management team

2016 Annual Report


2016

CFFO Staff Suzanne Armstrong Paul Bootsma Frances Pitkin Franchesca Weeks

Director of Research, Manager of Board and Committee Services Field Services Manager Office Manager Communications Manager

Table of Contents

Annual Report


CONTENTS Message from the President................................ 4-5 Message from the Management Team............. 6-7 Financial Statements.............................................8-15 Notes to the Financial Statements...................... 16-19


4

2016 The Christian Farmers Federation of Ontario is a professional organization for families involved in the business of farming. We value family enterprise, profitability and responsible stewardship of resources.

clarence nywening

Annual Report


MESSAGE FROM THE PRESIDENT Clarence Nywening is a broiler-breeder operator and cash-cropper from the Thamesville area. Nywening has been serving on the CFFO Executive Board since 2011. He has also served on the Chatham Kent Essex Christian Farmers Association.

Agricultural politics had many ups and downs in

program seeks to build better relationships and

2016. As a result, we at CFFO were kept very busy

communication between farmers and processors,

addressing new policies and fast approaching

especially in regards to farming practices, animal

changes in government regulations. Key issues that

welfare and food safety. This initiative has made

came up this past year included Cap and Trade,

significant progress over the past year by opening

Pollinator Health, and phosphorus in Lake Erie.

dialogue between our two industries. We’ve

Cap and Trade as part of the Climate Change Action

begun to have a better sense of what each

Plan was implemented by the Wynne government in

individual market is looking for, and we hope to

January 2017. It has met with friction in the farming

continue making progress in this area over the

community especially over concerns about the

forthcoming year.

cost impact on farmers. At CFFO we have actively

Though much was accomplished in 2016, the end

brought these concerns before our government,

of the year brought a lot of uncertainty with major

and repeatedly asked them to be aware of the

changes taking place in the U.S. government.

implications such a program will have on Ontario

Then President-elect Donald Trump made some

farmers’ ability to compete in a global market.

major claims in regards to trade between our

Other concerns have dealt with matters of farming

two countries, and now as he begins his work as

stewardship, including the ongoing battle over the

president, many of us are still uncertain how his

proper use of pesticides and their effects on pollinator

new policies will affect our farming markets. As

health. As a result of input from the CFFO and other

Canada and the United States currently have

stakeholders, the government has put together the

a positive trade relationship, we don’t foresee

Ontario Pollinator Health Action Plan.

huge changes taking place in our current trading

Phosphorus runoff into Lake Erie continues to be a

habits.

concern for farmers in south western Ontario. CFFO

We at CFFO are grateful for all the work that

has been actively involved with the 4R Nutrient

was accomplished in the year 2016 and we

Stewardship program and feels that this is an excellent

look forward to continuing to meet each new

program that will help farmers achieve lower levels

challenge that comes with this new year.

of phosphorus runoff without implementing new

Thank You.

government regulations. In September 2015, the Sustainable Farm and Food Initiative was started by the Ontario Farm Environmental Coalition, including CFFO, OFA and Farm and Food Care along with OSCIA and others. This

Clarence Nywening, President, 2016


6

2016 The Christian Farmers Federation of Ontario is a professional organization for families involved in the business of farming. We value family enterprise, profitability and responsible stewardship of resources.

MANAGEMENT TEAM

Annual Report


MESSAGE FROM THE MANAGEMENT TEAM CFFO Staff opened the year with a Policy Tour focused

for strong protection of farmland, especially

on the issue of Soil Health. Policy Tour discussions

within this sensitive and highly populated region.

formed the afternoon portion of many district annual

As Conservation Authorities (CAs) are playing a

meetings and were hosted in all 21 districts, including

greater role in providing extension to agriculture,

two locations in our Northeastern district. There were

our input on the review of the Conservation

four key topics: Carbon Sequestration relating to Cap

Authorities Act focused on the importance of

and Trade offsets; Biodiversity relating to benefits of

maintaining good relationships between CAs

diverse farming; Soil Organic Matter relating to use of

and farmers. Proposed changes to Regulation

municipal biosolids as a soil amendment; and Nutrient

440 for the Ontario Processing Vegetable

Loss in Waterways, relating especially to the issue of

Growers (OPVG) appeared to threaten the price

increased phosphorus in Lake Erie. Lively discussion on

bargaining power of the board. CFFO called for

all four topics provided insight and guidance for staff

further consultation with growers on the issue.

on soil-related policy issues.

Animal welfare issues were raised by the private

Our Young Farmer Barbecues were a great success

member’s bill C-246 proposing changes to the

again in 2016, hosted in Chatham Kent Essex, Oxford,

Criminal Code regarding treatment of animals.

and Simcoe County districts in July. These events

CFFO wrote to alert MPs of our concerns about

celebrate the importance of our young farmers and

the bill, which was defeated later in the year.

young farm families, and they offer an opportunity for

Many other topics were addressed, including

CFFO staff and leadership to connect directly with

development in northern Ontario, uncontrolled

this important demographic within our organization.

ground current, Waste-Free Ontario, emergency

Time for fellowship and fun with the kids made for

response within agriculture, the Next Policy

memorable events.

Framework, and the Red Tape Challenge.

The highlight in 2016 for CFFO’s Water Stewardship

Finally, we said farewell to our Communications

Task Team was a tour in June at the Sheridan Nurseries

Manager, Franchesca Weeks, who had been with

Georgetown campus. Their innovative water irrigation

CFFO since 2009. Her creativity and enthusiasm

system and retention pond are exemplary and

for farming were a great asset to CFFO. Many

illustrate the benefits of retention ponds in low water

of you will have met her in person at our Young

and drought conditions. The Task Team also heard

Farmer events and Convention, and enjoyed the

presentations from Melisa Luymes from Farm and Food

calendars she designed each year. She is now

Care and Charlie Lalonde and Al Mussell from Agri-

pursuing new opportunities, and we wish her well.

Food Economic Systems. Issues facing agriculture in 2016 were wide ranging. Government was active on many important files,

Suzanne Armstrong, Paul Bootsma, Frances Pitkin

including land use issues such as the Coordinated

and Franchesca Weeks, 2016 Staff

Four Plan Review, focused primarily in the Greater Golden Horseshoe area. CFFO continues to argue


8

Annual Report The Christian Farmers Federation of Ontario is a professional organization for families involved in the business of farming. We value family enterprise, profitability and responsible stewardship of resources.

FINANCIAL STATEMENTS

2016


IINDEPENDENT AUDITOR’S REPORT To the Directors of Christian Farmers Federation of Ontario (Federation des Agriculteurs Chretiens de l’Ontario) We have audited the accompanying financial statements of Christian Farmers Federation of Ontario, which comprise the balance sheet as at December 31, 2016, and the statements of revenues and expenses, statement of changes in members’ equity and statement of changes in financial position for the year then ended and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements in accordance with Canadian 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. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the organization’s preparation of the financial statements 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our unqualified audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Christian Farmers Federation of Ontario as at December 31, 2016 and of its financial performance and its cash flows for the year then ended in accordance with Canadian accounting standards for not-forprofit organizations.

Hamilton, Ontario March 7, 2017

DBK Accounting Professional Corporation Authorized to practice public accounting by the Chartered Professional Accountants of Ontario


10

BALANCE SHEET DECEMBER 31, 2016 ASSETS

2016

2015

CURRENT ASSETS Cash

$

Accounts receivable

246,942

$

165,873

869

10,461

GST/HST receivable

12,552

2,182

Prepaid expenses

20,320

8,542

280,683

187,058

78,729

70,923

602,173

618,563

RESTRICTED ASSETS Cash (note 6) CAPITAL ASSETS (note 3) $

961,585

$

876,544

$

30,804

$

41,393

LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities

MEMBERS’ EQUITY Invested in capital assets

602,174

618,564

General reserve (note 6)

78,729

70,923

249,878

145,664

930,781

835,151

Unrestricted (available for general purposes) $

APPROVED ON BEHALF OF THE BOARD: Clarence Nywening, CFFO President Bethanee Jensen, CFFO Treasurer

961,585

$

876,544


STATEMENT OF CHANGES IN MEMBERS’ EQUITY FOR THE YEAR ENDED DECEMBER 31, 2016 Invested in Capital Assets Balance, beginning of year

$

Excess (deficiency) of revenues over expenses Investment in capital assets Interfund transfer (note 6) Balance, end of year

$

618,564

General Reserve $

70,923

Unrestricted (General) $

Capital Reserve

2016 Total

145,664 $

-

$

835,151

2015 Total $

731,103

(29,509)

-

125,139

-

105,630

104,048

13,119

-

(3,119)

(10,000)

-

-

-

7,806

(17,806)

10,000

-

-

602,174

$

78,729

$

249,878 $

-

$

940,781

$

835,151


STATEMENT OF REVENUES & EXPENSES - GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2016 REVENUES Farm organization funding fees (note 7)

12

2016 $

829,920

2015 $

839,865

Less: refunds

(49,335)

(54,456)

Net farm organization funding fees

780,585

785,409

4,680

4,879

33,978

40,565

Grants

8,730

39,202

Seminar fees and other

2,670

375

Interest income

800

905

TOTAL REVENUES

831,443

871,335

Administrative

367,386

402,346

Provincial activities

181,078

190,328

78,053

78,541

-

5,686

District activities

79,787

60,571

TOTAL EXPENSES

706,304

737,472

EXCESS OF REVENUES OVER EXPENSES BEFORE OTHER EXPENSE

125,139

133,863

29,509

29,815

Membership fees Annual convention

EXPENSES (page 13-14)

Qualified districts (local affiliates) Non-qualified districts (unorganized regions)

Amortization EXCESS OF REVENUES OVER EXPENSES

$

95,630

$

104,048


SCHEDULE OF EXPENSES - GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2016 ADMINISTRATIVE Bank charges and interest

2016 $

Equipment rentals and maintenance

827

2015 $

1,096

10,486

6,907

4,068

3,172

37,861

38,350

-

12,716

14,039

11,571

3,440

1,721

17,110

12,740

Property taxes

6,100

4,367

Utilities

3,620

3,669

Repairs and maintenance

7,558

6,362

10,120

40,052

237,948

229,980

Staff travel and expenses

8,693

13,316

Telephone

5,516

16,327

Insurance Farm business registration administration fees New opportunities Office and printing supplies Postage and courier Professional and consulting fees

Research Salaries and benefits

$ 367,386

$

402,346

$

$

31,651

PROVINCIAL ACTIVITIES Annual convention Board and committee expenses

28,184 102,260

98,968

Farm community activities

31,851

28,470

Farm media

18,783

31,239

$ 181,078

$

190,328


SCHEDULE OF EXPENSES - GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2016, CONTINUED

14

2016

2015

QUALIFIED DISTRICTS (LOCAL AFFILIATES) Funding to district associations (note 8)

$

78,053

$

78,541

$

-

$

5,686

$

29,585

$

26,779

NON - QUALIFIED DISTRICTS (UNORGANIZED REGIONS) Funding to district associations (note) 8 DISTRICT ACTIVITIES Meeting and travel expenses Member recruitment

14,721

-

Farm media/newsletter

14,596

20,003

Promotion and advertising

20,885

13,789

$

79,787

$

60,571


STATEMENT OF CHANGES IN FINANCIAL POSITION FOR THE YEAR ENDED DECEMBER 31, 2016 CASH PROVIDED (USED) BY:

2016

2015

OPERATING ACTIVITIES Excess (deficiency) of revenues over expenses

$

95,630

$

104,048

Adjustments for items not affecting cash Amortization

29,509

29,815

125,139

133,863

9,592

(9,886)

Decrease (increase) in HST receivable

(10,370)

23,646

Decrease (increase) in prepaid expenses

(11,778)

6,306

Increase (decrease) in accounts payable and accrued liabilities

(10,589)

(39,415)

101,994

114,514

(13,119)

(25,089)

88,875

89,425

236,796

147,371

Net change in non-cash working capital balances: Decrease (increase) in accounts receivable

INVESTING ACTIVITIES Additions to capital assets INCREASE (DECREASE) IN CASH CASH, beginning of year CASH, end of year

$

325,671

$

236,796

$

246,942

$

165,873

Cash is comprised of the following: General fund Restricted fund

78,729 $

325,671

70,923 $

236,796


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016

16

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.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These financial statements have been prepared in accordance with Canadian accounting standards for not‑for‑profit organizations and include the following significant accounting policies:

(a) Capital Assets Capital assets are recorded at cost. Amortization is provided annually at rates calculated to write-off the assets over their estimated useful lives as follows: Building - 4% straight line

Furniture and equipment

- 20% straight line

Computer equipment ‑ 40% straight line

(b) 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.

(c) Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the amounts of revenues and expenses during the reporting year. Actual results could differ from management’s best estimates, as additional information becomes available in the future. All estimates are reviewed periodically and adjustments are made to the statement of revenues and expenses in the year they become known. The significant areas requiring management’s use of judgment relate to the rates of amortization used for capital assets and the amounts set up in accrued liabilities.

(d) 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.


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016, CONTINUED

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED

(e) 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, GST/HST receivable, 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.

CAPITAL ASSETS

Land

COST

$

Building

98,881

ACCUMULATED AMORTIZATION

$

-

NET 2016

$

98,881

NET 2015

$

98,881

555,347

65,258

490,089

503,629

Computer equipment

5,178

3,217

1,961

1,220

Furniture & equipment

26,833

15,591

11,242

14,833

84,066

602,173

$ 4.

686,239

$

$

618,563

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 2016 was $11,800. 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 $8.90 for each registration to administer the Farm Business Registration Program in 2016. 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: 2017 - $35,900; 2018 - $20,900; 2019 - $20,900; 2020 - $20,900 and 2021 - $7,822.


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 CONTINUED 5.

18

FINANCIAL INSTRUMENTS

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.

6.

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 had been set at 1% of actual farm business registration fees on an annual basis which amounts to $7,806 in the current year (2015 - $7,995). The reserve fund balance on December 31, 2016, is $78,729 (2015 - $70,923). In 2016, the organization established a capital reserve fund for financing future maintenance upgrades on the building. $10,000 was set aside for the reserve fund in 2016. The board elected to spend this amount on capital work done on the building this year.

The following notes (notes 7 to 9) are required by the Farm Registration and Farm Organizations Funding Act, 1993:

7.

FARM ORGANIZATION FUNDING FEES

During the year the organization received farm organization funding fees. Of these farming businesses 5.25% requested and received refunds (2015 - 5.8%). In addition to the fees received from 4,003 farming businesses, the organization received membership fees from 24 non-registered farming businesses (2015 - 25). 2016 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)

3,693

$

310

AMOUNT

NUMBER

720,135

3,548

60,450

759 4,307

$

839,865

218

$

42,510

4,003

$

780,585

222

$

43,290

31 253

$

2015

$

6,045

62

49,335

280

AMOUNT $

691,860 148,005

12,039 $

54,549


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016, CONTINUED 8.

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.

(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 $78,053 were made to the following qualified districts (local affiliates): ChathamKent-Essex, Dufferin Wellington, East Central, Elgin, Grey-Bruce, Haldimald Norfolk, Huron, Lambton, Middlesex, Niagara, Northeastern, Oxford, Quinte, Rainy River, Renfrew-Lanark, Simcoe County, St. LawrenceOttawa 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. This district did not meet the standards needed to be considered qualified districts. Direct contributions of $78,053 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.

9.

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.


2015

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