Finance committee  Just a point of clarification. The Hutterites are a unique culture, so they're members of their colony. They all take a vow of perpetual poverty, so there's a special section of the Income Tax Act that determines how the income of the congregation of the community is to be taxed.

Finance committee  You're excluded until you reach the age of 18 in this section of the Income Tax Act.

Finance committee  No, they cannot. That's been the subject of some discussion with the department. The department in fact confirmed that. Anyone under the age of 18 in the technical rules is deemed to be a member of the family who has taken a vow of poverty, so they're not allowed a distribution, even though they're actively participating.

Finance committee  Thank you for the opportunity to appear before this committee. Meyers Norris Penny is here to make a presentation on behalf of our 300 Hutterite colony clients who represent approximately 95% of the 30,000 Hutterite people in Canada. Section 143 of the Income Tax Act applies only to communal organizations and outlines the specific rules that Hutterite colonies need to follow in order to file and pay income tax on their earnings.

Finance committee  That's a good question. First off, we certainly recognize this is not a social policy issue. No other farming business, no other business in Canada, has a restriction as to the ability to employ people. There are many examples of children well under the age of 18 actively and gainfully employed throughout Canada.

Finance committee  What about someone who works at a restaurant. I'm sure there are many people in this hotel who have jobs before they're 21 years old.

Finance committee  If you take a farming situation in western Canada, for those of us who have been around farms, we know it's a common practice for individual children, and below the age of 18, to be actively engaged in the business of farming.

Finance committee  I'm sorry, I just don't understand the nature of the question then. These people are actively involved. Any other Canadian business, any other Canadian farm, non-Hutterite, has perfect and total freedom to allocate or pay wages to anyone. This group is not permitted to have any recognition of the effort they expend.

Finance committee  No, there's not. There are Hutterite colonies in Manitoba, Saskatchewan, Alberta, and now there are two in northern British Columbia.

Finance committee  No, it's a good question. From our discussions with Finance and the Canada Revenue Agency, we're not aware of any other group or organization that files under section 143. The terminology in that section never uses the term “Hutterite”, but it does describe the lifestyle of a Hutterite colony.

Finance committee  No. I think the biggest issue, as many in small business and/or agriculture would recognize, is that there's no recognition of the involvement of someone at a Hutterite colony under the age of 18. So if you take a child who is 14 or 15 years old, who is working actively in the farming operation, helping in the hog barn, the dairy barn, or on the farm, the colony is not permitted to either pay a salary or wage to that person and/or not put any income in that person's hands for the allocation of taxable income.

Finance committee  Yes. That is again I think a rather common misconception. In the mid-seventies, actually, there was a tax dispute that involved Hutterite colonies. It got an awful lot of notoriety and an awful lot of press. That dispute was resolved. The current legislation of the Income Tax Act goes back to 1961, and Hutterite colonies have, by and large, been taxed the same way since then.

Finance committee  Good morning. I'd like to thank the chairman and the committee for this opportunity to speak to you this morning. My name is Gordon Tait, and I'm a chartered accountant with Meyers Norris Penny. I am here to address the circumstances of a small, highly productive, community-minded minority here in Canada known as Hutterites.