If I am interpreting this correctly, than what it is saying is that if I buy $1000 worth of bitcoins and immediately buy a product with them, I am subject to the "barter" tax provision and I owe income tax on $1000, whereas if I used the dollars I would owe nothing, only the merchant would be required to claim the "income".
You are reading this wrong.
I'm Australian, but this appears to be very similar to Australia. So I will add what my tax/accountant lawyer has told me.
You are not subject to any further taxation with a barter purchase. It's the same as fiat.
The government will want the consumption tax (e.g sales tax/VAT/GST whatever) from the merchant.
"we generally consider that the value of whatever is received is at least equal to the value of whatever is given up."
Just because the merchant received bitcoin, does not mean he gained no "value" because it is not fiat.
The merchant declares the fiat equivalent of the transaction and must report it.
From the link..
"When BitCoins are bought or sold like a commodity, any resulting gains or losses could be income or capital for the taxpayer depending on the specific facts," ruled the CRA.
Capital gains on your Bitcoin trading will only apply when you cash out to fiat. This includes losses.
tldr: Carry on Canada with bitcoins.
Ditto aussie, and IANAA, but personal experience in non-standard tax returns combined with a little common sense says that you aren't just liable for tax when you cash out to fiat - you are also liable for tax when you trade-out.
So, imagine you buy
BTC5 for AU$50 ($10 each, back mid last year?)
13 months later you take your
BTC5 and buy a nice shiny new US$650 laptop from bitcoinstore.com.
You are now, IMO, liable for a capital gain of $600.
If your coins were mined then I would guess you're liable income tax of $650, but that's nothing more than my guess.
Of course, I'm wondering if there is there any single one of us out there that can produce accurate records as to which coins where mined/bought when for what price? Can you choose which coins you use (ie. choose your CGT tax base price) for a given purchase? Having never actually spent coins on "stuff", I could probably manage it, although some of my purchases were on exchanges that no longer exist.... Untangling that mess to pay tax owed is going to be... challenging, to say the least.