Cultivating Business The official publication of the Canadian Association of Farm Advisors 2020-2021 Canada Post Mail Publications Agreement Number: 40609661 With Compliments Of:2 The Canadian Association of Farm Advisors2020-2021 / www.cafanet.ca 3 CAFA INSIDERS 04 View from the Chair 05 Executive Director's Message 06 Advice from CAFA’s Board of Directors Cultivating Business contents Published By: Matrix Group Publishing Inc. 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FEATURES 08 Insuring the Risks of Management 09 A Litigator’s Tips for Avoiding (or Minimizing) Litigation 10 How Well do You Know Your Farm? 11 Plan Now, to Save Tax Later THE 2020-2021 CANADIAN FARM ADVISORS RESOURCE GUIDE 12 Canadian Farm Advisors Resource Guide 35 Upcoming Events 35 INDEX TO ADVERTISERS Cultivating Business Published For: Canadian Association of Farm Advisors Box 270 Seven Sisters Falls, Manitoba R0E 1Y0 Toll free: (877) 474-2871 Direct: (204) 348-3578 Cell: (204) 340-2500 Email: info@cafanet.ca CAFA’S NATIONAL BOARD OF DIRECTORS Kim Gerencser BAFS, CFP®, CAFA®, Chair MNP LLP Regina, Saskatchewan Ryan Parker B.Comm., AACI, P.App., P.Ag., CAFA®, Vice Chair Valco Consultants London, Ontario Tom Blonde B.Sc., CPA, CA, CAFA ® , Treasurer Baker Tilly GWD Elora, Ontario Catherine McCorquodale M.Sc., LL.B., CAFA ® , Secretary Monteith Ritsma Phillips LLP Stratford, Ontario James Fehr BSA, P.Ag, CAFA® RBC Royal Bank Steinbach, Manitoba Rick Gendemann CPA, CA, CAFA® Manning Elliott, Accountants & Business Advisors Abbotsford, British Columbia Shannon Lueke B.Mgt., P.Ag., CAFA® MNP LLP Humboldt, Saskatchewan Steven McQueen CCA, CAFA® McQueen Custom Farm Work Ltd. Brownsville, Ontario Chris MacPhee CPA, CA, CAFA® MRSB Group Charlottetown, Prince Edward Island Sarah Weigum CAFA® Alect Seeds Three Hills, Alberta Danielle Wildfong B.Comm., FEA, CAFA® Maverick Agriculture Saskatoon, Saskatchewan4 The Canadian Association of Farm Advisors T hanks to the global pandemic, 2020 will not be a year to look back on with fondness. However, there are many positive effects that have come out of the tactics the world has implemented in an effort to minimize the virus’s potential: better hygiene and cleaning standards, improvements in how efficiently we conduct business and interact with each other, and a better appreciation of the free- doms we may have taken for granted beforehand. From the perspective of the Canadian Association of Farm Advisors (CAFA), we’ve seen the fundamental way we pro- vide value to our members pulled out from under us. CAFA has always been about networking and education, both of which were always better when live in person where you can look your counterpart in the eye, shake their hand, build trust and rapport, then look forward to the next opportunity to do it again in the future. The appeal to doing all that remotely, virtually, was pretty low; who among us would rather be star- ing into a computer camera than looking across a table and sharing conversation with a colleague? But necessity is the mother of invention, and so it would be that COVID-19 necessitated a tremendous reduction of in-person contact which led to business, and society as a whole, quickly accepting and adopting virtual meetings as the norm. CAFA was no exception. Today, chapter meetings have gone online. CAFA’s famous Farm Update conferences are held virtually. All to rave reviews! The number of participants for the recent Farm Tax Update far exceeded expectations. If both networking and education are better in person, how have virtual events been so successful? The answer: it is a measure of our resiliency. “Our” being all of us, not just CAFA, but everyone in our society. When faced with what would otherwise be classified as an insurmountable challenge, we took the necessary steps to innovate, adjust, or pivot our views and our practices. As little as a year ago, most people would have quickly rejected attending a six-hour online conference. Such an activity was perceived to promise little more than dull content, boredom, distraction, and white noise. Today, the prospect of a six-hour online conference draws hundreds. Conferences held in person would be quite envious of attendance like that. Does this mean that virtual conferences are better than in person? In some ways they are. CAFA’s recent Farm Tax Update was attended virtually by members from British Col- umbia to Prince Edward Island. This can’t happen in person. Hundreds of hours of travel time were eliminated for those who attended (including the winter travel risks Canada pre- sents this time of year!). In other ways, virtual isn’t better. The opportunity to tap someone on the shoulder during coffee breaks to get ac- quainted is not available. Catching up with old friends during lunch was not afforded. However, hearing perspectives from other regions of Canada was. One type of interaction is not better than the other. Both types fit a need depending on the situation. I can see vir- tual conferences remaining in CAFA’s repertoire long after COVID-19 is no longer calling the shots. The interesting parallel I see is how every faction of our world has had to find a way to adapt and adjust in the wake of a global event that they could not control and could not plan for, a lot like farmers and the agriculture industry we all love and serve. Cheers to all of you who continue to support CAFA as we shift and adapt how we deliver value to our members. Thank you for your willingness to shift and adapt with us. Kudos to all of you in agriculture who, while not deemed an essential ser- vice, kept doing what you do in your part to keep our economy moving and our store shelves full. Thank you for your dedica- tion. Great praise to Liz Robertson, CAFA’s Executive Direc- tor, who didn’t miss a beat when (as mentioned) our model of delivering value to our members was pulled out from under us by a pandemic. Thank you for your “Can Do” attitude. And finally, thank you to our Board of Directors, both past and present, for your vision and dedication. CAFA has had to shift in the past and will continue to adapt in the future. Here’s hoping 2021 makes up for 2020! Kim Gerencser National Chair A Measure of our Resiliency View from the Chair CAFA has always been about networking and education, both of which were always better when live in person where you can look your counterpart in the eye, shake their hand, build trust and rapport, then look forward to the next opportunity to do it again in the future.2020-2021 / www.cafanet.ca 5 W hen I think back to the 2019- 2020 year, I think: That was different, but now let’s move on to 2021! The Canadian Association of Farm Advisors (CAFA) moved quickly when COVID-19 restrictions were put in place. As a matter of fact, when chapter meet- ings were stopped in mid-March, CAFA was up and running with national online presentations as early as April 3. We ran a modestly attended series to the end of June. The Board decided in April to cancel all in-person events until further notice, so CAFA has moved online. Virtual, Online, ZOOM – these are all part of our daily vocabulary and ac- tivities now. CAFA is now online with our national events (think big… we can as easily be doing Global events!), and our first foray into a professional production was a Farm Tax Update. Though we encountered some tech- nical glitches, it was one of our most successful events ever. The present- ers provided valuable content, and everyone got a glimpse of the CAFA I get to experience every day; a national association with some of Canada’s most experienced and knowledgeable farm advisors committed to constant improvement to better serve their farming clients. That is impressive! Watch for our Farm Transition Update in January 2021, with six speakers deliv- ering a unique and powerful message; Farm Women’s Update in April 2021; and finally one of our banner events, the Farm Management Update, in June 2021. Many chapter meetings are also online, so visit our Events Calendar to see what you can sign-up for. I am pleased to report that although we are missing out on the valued face- to-face meetings, our membership for this year is almost 90 per cent of last year’s. Some have not renewed due to retirement, some because they lost the networking, and probably a few who just forgot to renew! But overall, this shows a dedicated membership who want to learn more to be better advisors. Who knows what the future holds? There will be change, as there always is, and we will adapt. Farms are evolv- ing rapidly, the landscape is always changing, and family dynamics are be- ing dynamic. It is an important time to be a farm advisor as your farm clients will need your guidance more than ever, and with that comes a great respons- ibility to ensure it helps them and their families for generations to come. Thank you for your ongoing support, and I hope that 2021 is a better year for everyone. Liz Robertson, M.A. Executive Director Executive Director’s Message Continuing to Adapt CAFA insiders David Schmidt, B.A., CAIB., CRM, CAFA ® , is a Commercial Account Executive at Rempel Insurance Brokers in Morris, Manitoba, specializing in insuring farms and businesses across Manitoba and Saskatchewan. John D. Goudy, B.A. (Hons.), LL.B. BCL, CAFA ® , is an Ontario-based lawyer with Scott Petrie LLP Law Firm. John’s practice is focused mainly on property disputes, including real estate, environmental and commercial litigation, condominium law, expropriation law, energy regulation, and regulatory offences. Tricia Bell, B.Comm., CAFA ® , works as an Agriculture Business Advisor at Affinity Credit Union and has 22 years of experience. Tricia is passionate about what she does and is dedicated to working with her members to provide the advice and solutions that are right for them. Chris MacPhee, CPA, CA, CAFA ® , has been working in public practice for 14 years, working with a variety of owner- managed businesses in Prince Edward Island (PEI) and Nova Scotia, including many in the agriculture industry. It is an important time to be a farm advisor as your farm clients will need your guidance more than ever, and with that comes a great responsibility to ensure it helps them and their families for generations to come.6 The Canadian Association of Farm Advisors Thomas Blonde B.Sc. (Agr.), CPA, CA, CAFA ® Baker Tilly GWD London, Ontario “My number one piece of advice on how to mitigate your business risks in 2021 is to take advantage of this current ultra low-interest rate environment to refinance your debt. Interest rates have dropped dramatically to try to stimulate the economy due to COVID-19. We may never see interest rates as low as this again in our lifetime. For many farms, the monthly debt obligations are their largest cash outflow and even small changes in the interest rate can have a big impact on the bottom line.” What is the number one piece of advice you have for farm advisors moving into 2021? James Fehr B.Sc., P.Ag., CAFA ® RBC Royal Bank Steinback, Manitoba “Mitigating business risk in 2021 starts with identifying your largest risks and developing a plan around mitigation. Some common risks found in farming are buying price, selling price, and production. Risks that are less commonly identi- fied would be items like: 1) how foreign exchange effects your price; 2) how staff, hiring, and training affect your business; 3) how decisions can be key to your success; and 4) the import- ance of cash flow and how to manage. Some mitigating items on these less common risks are: 1) consider pre-purchasing your foreign exchange; 2) look to a human resource to help with your hiring, training, and standard operating practices; 3) to help with decisions, consider prioritizing expenditures based on the percentage of return on investment; and 4) con- sider a monthly cash flow projection to help decide on when purchases and sales should be made. Overall, the most im- portant item to mitigate business risk is to take some time to think through your key risks and develop a plan around them.” Rick Gendemann CPA, CA, CAFA ® Manning Elliott, Accountants & Business Advisors Abbotsford, British Columbia “Businesses can not rest on their laurels and sustain themselves with a ‘business-as-normal’ mindset. You need continued focus on sustainability to manage and weather through these trying times. To guide your business through to times when calmer waters will prevail, you need company-wide alignment and a cohesive effort from everyone in your business. Focus your attention to those things you can control and the choices you need to make going forward. Take steps to stabilize the busi- ness, closely manage cash flows, address your value prop- osition, and modify operations to improve efficiencies going forward.” Kim Gerencser BAFS, CFP ® , CAFA ® MNP LLP Regina, Saskatchewan “The last few years have shown just how quickly things can change and how volatile that change can be…all in areas we have no control: weather in the growing season, market prices, macro-economic headwinds (trade disputes), political unrest, and to top it all off, a global pandemic. Farmers and farm advisers alike need to examine their war chest: what re- sources do they have available (financial, operational, intel- lectual) that can be leveraged if these unmanageable risks keep coming. How will they adapt, innovate, and shift in the face of relentless and often unpredictable change?” Get Behind-the-Scenes, Members-only Access to videos from past CAFA educational development events. This is ONLY available to members so join now! Members! Advice from CAFA’s Board of Directors2020-2021 / www.cafanet.ca 7 Shannon Lueke B.Mgt., P.Ag., CAFA ® MNP LLP Humboldt, Saskatchewan “2020 has been a year of mixed results across the country. Similar to all farmers, though, is that farm costs are still rising. This is coupled with the fact that an aging generation con- tinues to want to retire more comfortably than the last one, which is pushing the profit margins for the incoming gener- ation to stressing levels. Producers must understand their costs and their balance sheet measures. Know what the vi- sion for the farm is, and set solid goals, objectives, and tac- tics to achieve them. Find an advisor to help you with this and keep you on task. Comparing to your neighbours is not the way to run a multi-million-dollar business.” Chris MacPhee CPA, CA, CAFA ® MRSB Group Charlottetown, Prince Edward Island “The best way to mitigate risk is to plan ahead. Take time to sit down with your management team and/or trusted advisors to flush out and address any known business risks for next year. Making a cash-flow budget for the year ahead and leaving some room for unexpected contingencies is al- ways a smart idea.” Catherine McCorquodale M.Sc., LL.B., CAFA ® Monteith Ritsma Phillips Professional Corp. Stratford, Ontario “2020 was certainly a year (or maybe it was two?). We are all hoping 2021 will treat us more kindly, but as farmers and farm advisors know, we cannot eliminate all risk. My number one piece of advice for farmers and farm advisors is know your business. Know who your customers or clients are, know your cost of pro- duction, know your employees, know your own risk tolerance. Knowledge can help you identify the areas of your business that present the greatest risk and allow you to speak with your advisors to find programs or business practices which can mitigate your risk in 2021.” Danielle Wildfong B.Comm., FEA, CAFA ® Maverick Agriculture Saskatoon, Saskatchewan “To mitigate risk in farm business we need to identify and discuss the ‘what ifs’ and all the things that could go wrong; risks we don’t often discuss. By doing this you will take your farm clients from a mindset of ‘that will never happen’ to ‘what if it did happen – what would we do?’ This creates the need to forward think, run scenarios, and create a plan. As advisors, we need to listen, question, and ensure we remove assump- tions and bias. When we have removed the ‘what ifs’, we re- move the risk.” Sarah Weigum CAFA ® Alect Seeds Three Hills, Alberta “In business you are your own biggest asset; don’t forget to invest in your own maintenance. It’s cliché to say get rest, eat well, and move your body, but I’ve seen poor business decisions made not because of ineptitude or malfeasance, but because of emotional, physical, or spiritual exhaustion. Find ways to connect with others meaningfully, move your body intentionally, and clean up your sleep routine so you are getting enough hours of shut-eye this winter. These practices will give you a strong foundation from which you can make better business decisions.” Steve McQueen CCA, CAFA ® Alpine Brownsville, Ontario “Our paths do not usually cross by accident, so respect and treasure each opportunity. As 2020 effected our risks at a pace like we could have never imagined, the ability to adapt and mitigate them is key for survival. We can only manage what we can measure, mak- ing risk management a key. Take inventory of your risks and prioritize which ones can be controlled and which ones can be eliminated.” Ryan Parker B.Comm., AACI, P.App., P.Ag., CAFA ® Valco Real Estate Appraisers & Consultants London, Ontario “Farmers deserve sophisticated ad- vice and the best way CAFA members can deliver that is to work with other CAFA members to lever- age their unique skills. The collaboration of CAFA members is what will drive the innovative solutions that farmers require.” www.cafanet.ca/board-of-directors. Learn more about our Board of Directors at:8 The Canadian Association of Farm Advisors M anaging a business includes risk. What an obvious state- ment now that we are in the midst of a pandemic and economic crisis in our country. I am impressed at the resiliency of business owners who continue to move forward amid the un- certainty around us right now. I have observed businesses changing policies, operations, and day to day workflow constantly during the past few months, and I applaud the entrepreneurs who are surviving and thriving during these times. While not new, many business man- agers are still unaware of management liability policies and the risks that can be transferred to an insurer for their management liability risks. This cover- age is not found in typical commercial or farm liability policies, as it is under- written by companies that specialize in the legal aspects of navigating legal issues with business management. It is safe to say that adjusting a property fire loss and managing a wrongful dismissal lawsuit are very different issues and re- quire different areas of expertise. It is common to see management lia- bility policies in place for non-profit or- ganizations, as they protect their board members. However, the need for this coverage extends well beyond board- run non-profit organizations. Private businesses with investors, publicly traded companies, and, may I suggest that even family-owned farms, should consider management liability policies. A well-rounded management liability policy can include three main areas of coverage: 1. Directors and Officers liability coverage – protecting the individ- uals who are making decisions on behalf of an organization, 2. Employment Practices Liability – providing insurance coverage for employee exposures such as dis- crimination, bullying, sexual ha- rassment, unfair dismissal or hiring practices, and 3. Fiduciary liability – the final com- ponent that can be included and will provide coverage when an organiz- ation is making financial decisions on behalf of their employees. Simply making choices on a benefits plan, or an employee retirement plan can create exposures that are covered by this coverage. Two specific coverages where the insurance industry has seen a rise in claims on management liability policies since the pandemic started in March are a rise in bankruptcy-related D&O claims, and Employment Practices claims from managing employees during these try- ing times. One question that I have been Insuring the Risks of Management By David Schmidt, B.A., CAIB, CRM, CAFA ® asking my clients is how they are doing with their HR management since March, and the conversation typically starts with an eye-roll or a deep sigh. Man- aging people is difficult at the best of times and when you add the uncertainty and stress of the pandemic to our lives, it is very common to have employee management challenges right now. So, the questions I ask are, could these exposures affect your family farm? Does your farm have employees? Does your farm have managing partners act- ively involved in the operations, and also have siblings or other outside partners who own portions of the farm, but are not involved in management? Does your farm have a controller or bookkeeper who is given full authority to pay bills, manage accounts, and take the noise away from the farm manager who wants to grow a crop? Does your farm have outside investors who have potential of losing investment returns or growth potential based on your management decisions? There are management liability ex- posures in each of these aspects that can be transferred to a management liability policy. My suggestion would be to engage an insurance broker in a dialogue about your management liability exposures, and to ask them for insight into your need for management liability insur- ance. Like all insurance policies, the best time to learn about your options is before a situation arises that would trig- ger coverage under the policy. David Schmidt is a Commercial Ac- count Executive at Rempel Insurance Brokers in Morris, Manitoba, specializing in insuring farms and businesses across Manitoba and Saskatchewan. Reach him at the office (204) 746-2320, by text (204) 712-6618, or by emailing him at davids@ rempelinsurance.com. Learn more at www.rempelinsurance.com.2020-2021 / www.cafanet.ca 9 A ccording to Google, Mark Twain once said, “Going to law is los- ing a cow for the sake of a cat.” Or it is a Chinese proverb? Google wasn’t sure. Either way, there is usually good reason to avoid litigation where possible. Litigation ends relationships, and even successful litigation doesn’t always pay. Here are some tips for avoiding, or at least minimizing, litigation. First, consult with a lawyer It may sound counter-intuitive to rec- ommend consulting with a lawyer in or- der to avoid litigation, but getting good information and advice early can help resolve burgeoning disputes. Don’t put it off. There’s a cost to consulting with a lawyer, but professional advice can help you avoid making legal and strategic missteps, including missing limitation dates. Sometimes just having the ability to commence a court action will allow you to achieve resolution. Your lawyer can tell you where you really stand in a dispute, and whether you have leverage or not. Be honest with your lawyer and don’t withhold information. Incomplete information can only produce an incomplete legal opinion. Second, keep (good) records They say a picture is worth a thousand words. Documentation can be worth thousands (or tens, or hundreds, of thou- sands) of dollars because it often sets the record straight. Many legal disputes arise out of miscommunication or are pro- longed because a lack of documentation allows parties to stick to their competing viewpoints in spite of the truth. When conducting business trans- actions, put at least all of the essential elements of the deal in writing. Oral agreements can still be legally binding agreements, but written agreements are more certain and more likely to be enforceable. Retain your records. If you don’t want to keep the paper, digitize your records. If you can see something is going wrong, take photos and keep notes. Having documentation that shows what really happened helps parties re- solve disputes or avoid them altogether. Third, be prepared to compromise “It’s a matter of principle” can be a costly phrase. Yes, there are principled positions worth fighting for, but most legal disputes come down to money. For court proceedings, the general rule is that the successful party is entitled to recover a portion (not all) of their legal costs from the unsuccessful party. Even if you are en- tirely successful in your claim, you will end up bearing a portion of your legal costs. And if you refuse to accept a reasonable settlement offer from the opposing party (maybe on the basis of principle) that could avoid or shorten the litigation, you might end up having to pay some of your opponent’s costs. Making a fair agree- ment based on compromise early can be financially superior to a result achieved through lengthy litigation, not to mention the benefit of avoiding the stresses of the litigation process altogether. Fourth, bite your tongue Lawyers regularly hear the following advice about sending correspondence in contentious or emotionally-charged situations: finish writing your letter, but don’t send it to the other lawyer; put it in your desk drawer and come back to it tomorrow; once you’ve calmed down you may want to revisit the language from yesterday’s draft. Using aggres- sive or inflammatory language in com- munications with the other party in a dispute is not likely to get you closer to a solution. Understand that everything you say and, especially, write during a dispute will find its way before the judge if the matter goes to court. Don’t burn bridges when you don’t have to – gather all of the information and let the facts speak for themselves. A bonus tip Make a will and have powers of at- torney for property and for personal care. John D. Goudy is an Ontario-based lawyer with a practice focused mainly on property disputes, including real es- tate, environmental and commercial liti- gation, condominium law, expropriation law, energy regulation, and regulatory offences. John has a particular interest in agricultural land matters – outside the office, he lives and works on his family’s cash crop farm northwest of London, Ontario with his wife and three kids. You can reach John at 519-433-5310, or by emailing jgoudy@scottpetrie.com. A Litigator’s Tips for Avoiding (or Minimizing) Litigation By John D. Goudy, B.A. (Hons.), LL.B. BCL, CAFA ® , Scott Petrie LLP Law FirmNext >