At the annual conference of Federal, Provincial, Territorial (FPT) Ministers of Agriculture in Whitehorse, Yukon in July, the Ministers of Saskatchewan, Alberta, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Manitoba expressed serious concerns about changes to the capital gains tax proposed in the 2024 federal budget and the impacts they will have on the agricultural sector.
The changes to the capital gains tax was not a topic on the agenda of the annual meeting of FPT Ministers of Agriculture. Provinces raised this important topic during roundtable discussions, and noted that these changes will inadvertently, disproportionately and unfairly target producers and their succession plans.
"Agriculture is the backbone of our economy," Saskatchewan Minister of Agriculture David Marit said. "We must work with our producers, ensuring their success and the proposed changes to capital gains taxes will make it harder for us to do just that. It is our position that the federal government reverse this harmful policy and work with producers and provinces to keep our agriculture sector strong and vibrant."
"The proposed changes to the capital gains tax are deeply concerning for Alberta's agricultural community," Alberta's Minister of Agriculture and Irrigation RJ Sigurdson said. "These changes will unfairly burden our farmers and ranchers, who are already facing significant challenges. The federal government must reconsider these measures as they threaten the long-term viability of Canada's agricultural sector and the livelihoods of those who depend on it."
"The Ontario approach has always been to reduce taxes and red tape for farmers, agricultural employers, and agribusiness stakeholders," Ontario's Minister of Agriculture, Food and Agribusiness Rob Flack said. "Raising capital gains taxes at a time when so many farmers are approaching retirement and managing farm succession planning is a serious mistake and our government opposes it unequivocally."
Intergenerational transfers play an integral part in succession planning for family farms. Increasing inclusion rates from one-half to two-thirds for individual capital gains above $250,000, and from one-half to two-thirds for corporations, will penalize farming operation transfers. Farmers and ranchers who rely on selling their assets for retirement will also see their retirement plans diminished.
The changes to the capital gains tax will jeopardize the long-term viability of family farms who are unable to keep pace with federal tax measures, in addition to other increasing costs associated with the farming industry. Putting these critical farming businesses at risk will have wide ranging implications to Canadian food security, rural communities, and the Canadian economy. In the long-term, these impacts may be greater than the federal government's anticipated revenue generated by these tax measures.
Click here to see more...