By Jean-Paul McDonald
Farms.com
A coalition of major Canadian agricultural associations is pushing back against new federal tax policies that they believe could adversely affect the farming community.
This collective, including entities such as the Canadian Federation of Agriculture and the Canadian Cattle Association, has officially voiced their concerns through a letter addressed to the government.
The primary issue at stake is the proposed hike in the capital gains inclusion rate which, according to these groups, threatens the financial health of farming enterprises, especially when passing down farms through generations.
The letter argues that the increase essentially negates the benefits of the newly adjusted Lifetime Capital Gains Exemption (LCGE), which was recently raised to $1.25 million to better reflect the rising value of farmland.
The organizations have put forth several recommendations to the federal authorities. Firstly, they are calling for a delay in the enactment of these tax changes until at least January 1, 2025, to allow for more comprehensive consultations with stakeholders.
They suggest modifications to the Canadian Entrepreneurs’ Incentive (CEI) to extend its benefits to successive generations of family farms, not just the initial founders.
Another significant proposal is to maintain the former tax rates for farm transfers under Bill C-208, ensuring that such transfers can still benefit from the older, more favorable inclusion rates.
Additionally, they recommend that capital gains qualifying for the LCGE should be exempt from the Alternative Minimum Tax calculations, even if the exemption is not claimed.
These groups express a willingness to engage in further dialogue with the government to refine these policies, emphasizing the importance of these changes for the sustainability of agricultural businesses across Canada.
The collective effort by these prominent associations highlights the critical nature of tax policy in the sustainability and continuity of agricultural businesses, underscoring a significant moment in Canadian farm economics.
The complete list of groups that signed the letter include the following:
the letter included the following:
Canadian Canola Growers Association
Canadian Cattle Association
Canadian Federation of Agriculture
Canadian Hatching Egg Producers
Canadian Ornamental Horticulture Alliance
Canadian Seed Growers Association
Canadian Sugar Beet Producers Association
Fruit and Vegetable Growers of Canada
Grain Growers of Canada
National Cattle Feeders Association