Farm Operating Expenses and Depreciation Charges

Detailed information for 2022





Record number:


Farm operating expenses represent the business costs incurred by farm operators for goods and services used in the production of agricultural commodities. This series also includes depreciation charges to account for economic depreciation or the loss in fair market value of capital assets.

Data release - May 25, 2023; November 28, 2023 (revised data)


Estimates of farm operating expenses are designed to provide an annual measure of business costs incurred by farm operators for goods and services used in the production of agricultural commodities. The primary reason for compiling farm operating expenses is to estimate, on a provincial basis, net farm income and the agriculture sector's contribution to gross domestic product. The numbers are used to assess the state of the agricultural industry and to form the basis of various policy options.

Expenses are recorded when the money is disbursed by the farmer (i.e., on a cash basis) and include items such as property taxes, custom work, rent, crop input expenses (fertilizer and lime, pesticides, commercial seed, irrigation, twine and containers), livestock input expenses (livestock purchases, commercial feed, artificial insemination and veterinary fees) machinery and building repairs, fuel for heating and machines, wages, interest and business share of insurance premiums. Expenses related to the purchase of farm capital (real estate, machinery and equipment) are not included.

Depreciation charges against the farm business and rebates paid directly to farmers are also included in this data series.

Depreciation charges are intended to account for economic depreciation or the loss in fair market value of capital assets. There are no monetary disbursements associated with depreciation. Generally, depreciation is considered to occur as a result of aging, wear and tear, and obsolescence of farm buildings, farm machinery, and the farm business share of autos, trucks and the farm home. It represents the value of capital that is no longer available for future use. Economic depreciation should not be confused with accounting depreciation, tax depreciation or capacity depreciation.

National and provincial estimates of rebates paid directly to farmers represent a reduction in farm expenses incurred in the production of agricultural commodities. Rebates, paid by various governments, are used to calculate total net expenses.

Reference period: Calendar year

Collection period: During the six weeks prior to the release.


  • Agriculture and food (formerly Agriculture)
  • Farm financial statistics

Data sources and methodology

Target population

All Canadian agriculture operations as defined by the Census of Agriculture. The census defines an agricultural operation as a farm, ranch or other operation that produces agricultural products intended for sale.

Instrument design

This methodology does not apply.


No sampling is done for this statistical program.

Data sources

Data are extracted from administrative files and derived from other Statistics Canada surveys and/or other sources.

Preliminary estimates for most expense items are based on price and quantity change indicators collected from a wide variety of administrative sources and the Farm Input Price Index. Revisions to these data are made by incorporating preliminary and subsequent final estimates from the Agriculture Taxation Data Program (ATDP). Revisions are also incorporated into this series after the release of the quinquennial Census of Agriculture.

Other expense items (interest, irrigation, livestock and poultry purchases, crop and hail insurance and stabilization premiums) and rebates are derived from administrative data prepared by banks, credit unions, industry associations, Farm Credit Canada, federal and provincial governments and from Agriculture and Agri-Food Canada.

The Farm Financial Survey (FFS) is a biennial nationwide survey of agriculture operations which is used in the estimation of depreciation and interest expenses.

The Census of Agriculture is a quinquennial survey of all Canadian agricultural holdings, including First Nations reserves producing agricultural products intended for sale.

The ATDP is an annual census of taxfiler records associated with farms.

Please see the link that follows for further information on Agriculture Taxation Data Program (record number 3447), Farm Financial Survey (record number 3450) and Census of Agriculture (record number 3438).

Error detection

Data for individual expense items are compiled directly and are verified for large year-to-year changes, analyzed for time series consistency, links to current economic events, issues arising from the source data, and for coherence with other sources.

Because the expenses are a component of net farm income, the resulting changes to the various measures of farm income are also analyzed for time series consistency, links to current economic events and coherence.

In addition, the source data are subject to their own quality-control procedures during collection and processing stages. For instance, automated edits identify processing errors at the data-capture stage and subsequent editing identifies, among other things, errors, inconsistencies and extreme values in the captured data. Top contributors at the provincial level are often further analysed.

The administrative data used in the series are assessed based on historical and current trends, subject matter expertise, and information obtained through discussion with industry authorities. Much of the administrative data are already audited by the source organization. Any anomalies or inconsistencies detected are verified with the source, and, where necessary, adjustments are made to reconcile data with the conceptual framework of the Farm Income series.


This methodology type does not apply to this statistical program.


Initial expense estimates (released in May following the reference year) are based on price changes from various sources including the Farm Input Price Index (FIPI) and quantity changes based on discussions with industry contacts and other available administrative and survey data. The first revisions in November are based on preliminary tax data. The following May, final tax data are used.

Some expense items (interest, irrigation, livestock and poultry purchases, crop and hail insurance, and stabilization premiums) and rebates are estimated from administrative data prepared by banks, credit unions, industry associations, Farm Credit Canada, federal and provincial governments, and from Agriculture and Agri-Food Canada.

The depreciation on farm buildings is based on the value of farm land and buildings. Provincial owner-occupied proportions are derived from the Census of Agriculture estimates of land tenure. The business share of the house was based on tax allowances and expert opinion. These proportions are used to derive the owner-occupied farm business share of the value of farm houses and other buildings. Depreciation is calculated using the declining balance method where the appropriate capital value is multiplied by the depreciation rate. Depreciation of autos, trucks and other farm machinery are based on their respective capital value series, using the declining balance method.

A full description on estimation is provided in the attached document.

Quality evaluation

The quality of expense estimates is evaluated by checking the consistency of these data within the time series and using estimates from other sources. The expense series is also an important component of the Farm Income series. An interpretative analysis is conducted for the series on its own and as it relates to the other components.

Disclosure control

Statistics Canada is prohibited by law from releasing any information it collects that could identify any person, business, or organization, unless consent has been given by the respondent or as permitted by the Statistics Act. Various confidentiality rules are applied to all data that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.

In order to prevent any data disclosure, confidentiality analysis is done using the Statistics Canada Generalized Disclosure Control System (G-Confid). G-Confid is used for primary suppression (direct disclosure) as well as for secondary suppression (residual disclosure). Direct disclosure occurs when the value in a tabulation cell is composed of or dominated by few enterprises while residual disclosure occurs when confidential information can be derived indirectly by piecing together information from different sources or data series.

Revisions and seasonal adjustment

Data are published twice each year, at the end of May and at the end of November. Preliminary estimates of a calendar year are available in May of the following year (i.e., five months after the end of the reference year). The November release revises these estimates to incorporate data received too late to be included in the first release, data revisions received from administrative source agencies, and to incorporate preliminary tabulations from the Agriculture Taxation Data Program (ATDP). At this time, revisions can also be made to estimates from the year previous (i.e., data for the previous two calendar years are subject to revisions in November). Updates based on the final ATDP data are incorporated in the estimates released the following May (i.e., 17 months after the end of the reference year). Every five years a historical revision is done based on the results of the Census of Agriculture and other data.

Data accuracy

A data accuracy measure is a numeric value, or symbol corresponding to numeric values, which quantifies or summarizes the likely magnitude and important sources of differences between the published data and the quantities that the survey was designed to estimate.

No direct measures of the margin of error for the Farm Expense estimates can be calculated. The quality of the estimates can be inferred from analysis of revisions and from a subjective assessment of the data sources and methodology used in the preparation of the estimates.

In general, weaknesses in the source data are from either under coverage or from inappropriate concepts and definitions. The data used in the derivation of annual expenses are quite varied in coverage, details, definitions and concepts and often these factors may not coincide with those required. They must be thoroughly examined and adjusted for consistency and coverage, using carefully designed estimating procedures.

Administrative data are generally compiled for an organization's own needs, and not for statistical purposes, however much of the data are already audited by the source organizations. The administrative agencies used are considered to be the best sources available, and data received from them is judged to be of very good quality, even in those circumstances where adjustments have been made to cohere with the conceptual frame work of the Farm Income Accounts.

The processing procedures for the ATDP and the FFS help minimize the occurrence of errors introduced during editing and response errors.

The Farm Financial Survey is based on a sample rather than the total population, and is thereby subject to sampling errors. At the Canada level, the 2015 FFS had a coefficient of variation range for total assets and total liabilities of 1.8% and 3.1% respectively.

The Agriculture Taxation Data Program (ATDP) underwent a redesign for reference year 2015. Until reference year 2014, the ATDP employed a weighted sample design. Starting in reference year 2015, the ATDP is based on a census of tax-filers thus eliminating sampling and subsequent weighting. As well, the ATDP was completely redesigned to use Statistics Canada's corporate tools and processing systems.

As a result of these changes, data users are advised to use caution when comparing 2015 data with the previous years.

In the 2011 Census of Agriculture, questions about detailed expenses from 2010 were asked on the questionnaire. As a result of the 2016 Census of Agriculture content consultations, a decision was made to replace the detailed expense categories on the questionnaire with tax data.

Due to a change in methodology, data users must exercise caution when using linked data from the 2016 Census of Agriculture and the 2015 Agriculture Taxation Data Program (ATDP), when comparing detailed expenses from the 2015 ATDP with those from previous censuses.


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