Grain Growers of Canada (GGC) maintained its stance against the proposed tax hike, despite the government’s postponement. According to the GGC, the tax increase has already forced many family farms to sell earlier than planned, and the delay only prolongs the uncertainty facing these operations.
"Delaying bad policy doesn’t fix bad policy – it just drags out uncertainty, derails succession planning, and challenges the future of family farms," stated the organization in a media release.
The GGC argued that when the tax hike eventually takes effect, it will target farmers' retirement plans, complicate farm transfers to the next generation, and drive up the costs of legal and accounting services. They called on the government to completely reverse the planned increase to safeguard family-run farms.
GGC had previously explained that an average family-owned grain farm could face a 30 percent increase in taxes once the new two-thirds capital gains inclusion rate is enacted. "This not only complicates retirement planning but also the transfer of farms to the next generation," said Kyle Larkin, Executive Director of the GGC.
The financial burden would be significant for many farmers. For example, an 800-acre farm in Ontario, purchased in 1996, would incur an estimated $1.2 million in additional taxes if sold under the new tax regime. Similarly, a 4,000-acre farm in Saskatchewan would face an increase of just over $900,000 in taxes.
It’s not only farmers who are concerned about the proposed tax changes. The C.D. Howe Institute has warned that the capital gains tax hike could lead to significant economic consequences, with potential declines in employment of up to 414,000 jobs and a reduction of $90 billion in Canada’s GDP.
Jasraj Singh Hallan, Conservative Shadow Minister for Finance, criticized the government for seeking to raise taxes on farmers at a time when many Canadians are struggling with food insecurity.
Photo Credit: Pexels Nataliya Vaitkevich