Strength in numbers: tax proposal debate sparks change

Oct 23, 2017

Federal government will discuss ways to improve the intergenerational transfer of farm businesses

Staff Reporter

Farms.com

Farmers who are planning to pass their operation down to their children can take a sigh of relief, as the government has heard the concerns over its proposed tax changes.

Last week, Finance Minister Bill Morneau announced that the federal government will not implement the proposed changes to the Lifetime Capital Gains Exemption (LCGE).

“Under the proposals that (the government) put forward, there were going to be restrictions on (the amount) of Lifetime Capital Gains (LCG) you could use when transferring to a corporate entity,” Ron Bonnett, President of the CFA, said in an interview with Farms.com.

“(These restrictions) could have had a huge impact on the amount of tax that would be payable on the transfer of a farm to a family member.”

This particular rule “would have made it more costly for small business owners — including farmers and fishers — to sell or transfer their business to their children,” Dan Kelly, President of the Canadian Federation of Independent Business, said in a release yesterday.

The proposed changes would have put an additional burden on the next generation taking over the farm, Bonnett said.

And, farmers had already invested their time and money into “tax and succession planning based on the rules as they stand today,” he said.

“The new proposals could have changed their entire plans.”

However, the recent debates have taken a positive turn.

The discussions around the proposed tax changes have sparked the government’s interest in further conversations on succession planning.

The government wants to see "if there are other ways that could improve the ability of farmers to pass the farm from one generation to the other,” Bonnett said.

This notice followed the federal government’s announcement on Oct. 23 that it will cut the small business tax rate from the current rate of 10.5 per cent to 10 per cent in 2018 and then to 9 per cent in 2019.

“The tax announcements have been fairly positive throughout the whole week,” Bonnett said.

Photo: Thunderstock Images/ Stockbyte photo

Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.