Camille fixed the chair I use at my design desk. In return, I laid out a small price sheet for her workshop. We agreed on the work over coffee, finished it, and considered the arrangement settled.
A month later I was sorting expenses. There was the chair, no longer wobbling. There was no payment in the bank file.
"Did we forget the paperwork?" I asked.
We had remembered everything except the part that would explain the exchange to someone else.
No cash does not mean no income
When a business exchanges its goods or services for someone else's, the value of what it supplies must be included in business income. Barter can also have GST/HST consequences. CRA's sources-of-income guidance.
In our simplified agreement, each service was valued at $300 before any applicable tax. I recorded $300 of design revenue and documented how we settled the amount through the exchange. Camille kept the corresponding record for her work.
The other side needs its own decision
Receiving something in a barter doesn't make it automatically deductible. The business purpose and whether the item is a current expense, capital property or personal purchase still matter. A repaired work chair and a birthday gift would not produce the same expense decision.
We wrote down the date, services, agreed value and how the two amounts were settled, and retained the normal invoices and work descriptions. Each of us checked our own sales-tax position instead of assuming the other's registration settled it for both.
The arrangement was still useful. I had a chair that stayed level and Camille had the price sheet she wanted. The records simply made the agreement understandable without needing us both in the room to retell it.
Canadian rules checked October 20, 2026. This is an ordinary business exchange, not a conclusion about casual personal swaps.
