Farmers are entitled to obtain a federal tax credit on canola checkoff deductions that are used to support Research & Development (R&D). The government allows 80 per cent of the total qualifying research investment to be claimed as eligible for the tax credit.

For the Manitoba Canola Growers Association (MCGA), only part of our R&D qualifies for the tax credits. 

The rate for canola research in Manitoba in 2025 has been requested at 19.6% (pending approval).

To claim the federal tax credit on your tax returns, you must file a T2038 (IND) for farm proprietorships or a T2SCH31 for farm corporations. The investment tax credits earned may be used as follows:

• Offset federal taxes owing in the current year;
• If no taxes are owing, a portion may be refunded to you in that year, if you are an individual, or all of the credit may be refunded if you are a corporation;
• Carried forward up to 20 years to offset federal taxes;
• Carried back up to three years to reduce federal tax paid in those years.

For more information on the process of claiming the tax credit, please consult your accountant or visit the Canada Revenue Agency website.

Please note: A farmer may not claim investment tax credits (ITC’s) on any portion of checkoff that has been refunded by MCGA.

The reported canola checkoff that was deducted from a farmer’s cash ticket and is eligible for the tax credit from 2012-2025 is as follows: