CCA that knows a greenhouse from a warehouse
The single most common classification miss we see is treating every structure on the property as an ordinary building. The CCA schedule is more generous than that: a typical frame or hoop greenhouse belongs in Class 6 at 10%, more than double the pace of a conventional Class 1 building, and the equipment inside moves faster still. Getting the split right before construction invoices are coded is worth real money in the early years of a build:
| Asset | Class and rate |
|---|---|
| Frame or hoop greenhouse structures | Class 6 — 10% |
| Conventional retail building | Class 1 — low single digits |
| Benches, irrigation, racking, most equipment | Class 8 — 20% |
| Delivery trucks and yard vehicles | Class 10 — 30% |
| POS hardware and computers | Class 50 — 55% |
Timing matters as much as class. An asset must be available for use before CCA starts, so a structure finished in the month after year-end deducts nothing this year, and a purchase moved a few weeks earlier can. We review the capital plan against the year-end every fall as part of Tax Planning & Advisory.
Family pay that survives TOSI
Most garden centres run on family in April and May, and the tax plan should pay them properly. Reasonable wages for real work are deductible to the company and taxed in the worker's hands at their own rate, which is often the cleanest income split available. Dividends are the riskier route, because the tax on split income (TOSI) rules apply top-rate tax unless an exception fits.
The exception that matters here is the excluded business test: roughly twenty hours a week of real involvement. The CRA's guidance applies that test to the part of the year a seasonal business actually operates, which is exactly the fact pattern of a spouse who works the store flat out from March to June and not at all in January. Documenting those hours, schedules, till logins, delivery runs, is cheap insurance we set up once. The salary-versus-dividend mix itself gets decided after the June numbers are real, not in a February guess.
The land under the lot
Around the GTA, the appraisal that surprises garden centre owners is rarely the business, it is the parcel. That reality drives two very different exits, and the tax plan has to know which one you are heading toward. A share sale can use the lifetime capital gains exemption, now $1.25 million per qualifying shareholder, but only if the shares meet the qualified small business corporation tests: broadly, assets substantially all used in the active business at sale and mostly so for the two years before. Land used in the business counts as active; a balance sheet stuffed with surplus cash and passive investments does not, and cleaning that up takes time, not a phone call the week an offer arrives.
A sale to a developer, by contrast, is usually an asset deal that never touches the exemption, so the planning shifts to corporate structure, a holding company for the property, and how proceeds come out over time. We handle the reorganization side through Corporate Restructuring, and where the goal is passing the operation to the next generation rather than selling it, Estate Planning maps the route before the family assumes there is one.
Off-season cash without grinding the small business rate
A strong spring leaves cash that sits until the fall buying commitments, and where it sits has a tax consequence. Once a CCPC's passive investment income passes $50,000 in a year, the $500,000 small business limit shrinks by five dollars for every extra dollar, and it is gone entirely at $150,000. Most garden centres are nowhere near that line, but a land-rich company that has sold something, or one that has accumulated years of retained earnings in securities, can cross it without noticing.
The practical off-season moves are smaller and annual: dividends timed across calendar year-ends to fill low personal brackets, RRSP contributions matched to salary decisions, and a shareholder loan account that gets cleared deliberately rather than discovered at filing time. None of it is exotic. All of it works better decided in November than reconstructed in April.
