This year’s federal budget appears poised to reverse the effects of a landmark 2012 decision by the Supreme Court of Canada that could have resulted in a slew of part-time farmers across the country to claim full farming losses against other income.

In Canada v. Craig, the Supreme Court held that the taxpayer met the chief source of income test for farming, and his farm losses were fully deductible, even though the farm represented a subordinate income source to his law practice. The court took the unusual step of reversing a 1977 ruling, Moldowan v. Canada, which had defined the legal and accounting landscape for nearly three decades.

"The government acted to ensure that the income tax law is consistent with its underlying policy intent," a Department of Finance official told The Bottom Line, adding: "The recent decision in Craig was inconsistent with the policy."

MNP is adding four significant letters to the firm: MSCM. Effective June 1, Canada’s seventh largest accounting firm will acquire MSCM, a Toronto-based accounting, tax and advisory firm, which was ranked 26th in The Bottom Line’s Canada’s Accounting Top 30 with $14.7 million revenue in 2012.

The move will bring the number of offices MNP has in the Greater Toronto Area to four and its employee count to 375. "We’ve effectively doubled MNP’s presence in the GTA," said Jeremy Cole, the firm’s regional managing partner for the GTA.

That growth will enable MNP to enhance the services it can offer to clients in Canada’s largest city. At present, MNP has upwards of 50 publicly listed companies in the Toronto area that it conducts audits for, while MSCM has 80.