Daycare Meals - Canada Revenue

[bright sparks]

Dear Daycare Owners,

CRA has started to audit the cost of daycare meals. My client has been audited and it is CRA's view that the cost of meals (breakfast, lunch and 2 snacks) should be no more than $3.08 all age groups. They got their information from "Consumer Trends Report, Chapter 9: Consumer Spending , Office of Consumer Affairs -9.5 Consumer Spending on Food, the average weekly cost of the Nutritious Food Basket for a family of 4 in Edmonton. It is reported that the average spending was $132.10 in 2002.Due to inflation the $132.10 would be equal to $161.13 in 2013. CRA estimates that adults eat twice as much as children so that 2 children would be equal to 1 adult.
Family of 4 equals $161.13 weekly; divide weekly amount by 3 to determine amount for 2 children equals $53.94 and for 1 child weekly equals $26.97. Daily cost per child would be $3.85. Since all kids don't eat everything CRA concluded a reasonable amount would be $3.08 per day (4/5*3.85). The number I used for my daycare clients in 2013 was $5.22.What do you allocate per child per day for meals?

I have to be honest, I'm not buying this. You said your client is being audited? Who are you to them then? Are you an agency then?

First of all, the cost of food is never constant so the average is way off. That cauliflower can cost $2 or as much as $5 in ontario. Cost of living is also significantly different in certain provinces making it impossible to base the cost off of one city's average "consumer report".

Also it just doesn't make sense to me. Some folks live off processed foods whereas others eat clean. Additionally a families diet may be very different than that which is being provided to children at this kind of business. Two daycares could pretty much serve the same meal plan but have very different costs based on source of food, season, convenience packaging e.g chopped bagged broccoli vs whole, organic and none organic, frozen or fresh. Same foods but potentially significantly different expenses.

If this is an expense, it should be actual cost, not an average. I have children who eat like birds and others who eat as much as me! Why should I expense based on a dreamed up average vs actual cost of food purchased. I just don't buy this claim at all.

People get audited on a regular basis and I think that isn't cause for concern. I'd like a link to the source of this claim, otherwise aim going to continue to claim what it costs. I don't claim an average I have a meal plan, purchase all of my ingredients and then the cost is what it is.