New Changes to CEI Offer Partial Relief to Farm owners
The Canadian Federation of Independent Business (CFIB) has responded positively to the recent amendments to capital gains taxation introduced by the federal government.
The changes, part of the Canadian Entrepreneurs’ Incentive (CEI), aim to offset some of the negative impacts of the increased capital gains inclusion rate, offering relief to a select group of small business owners.
The CEI will now reduce the amount of capital gains paid by business owners when selling shares of their business. While CFIB appreciates the progress, they note that these changes do not fully counterbalance the inclusion rate hike's impact.
Among the key amendments, farmers and fishers selling property will now have access to the CEI, expanding the program beyond just those selling shares. Additionally, personal services businesses will also benefit from the incentive.
The removal of the founder rule is another significant improvement, allowing those who invest later in a business to take advantage of the program.
The CEI will be phased in over five years instead of the initially proposed ten, providing faster relief to eligible business owners.
CFIB remains committed to advocating for the expansion of the CEI to all small and medium-sized enterprises (SMEs) and urges the federal government to reconsider the increase in the inclusion rate to better support the broader business community.
These amendments are a step in the right direction, but there is still much work to be done to ensure all small business owners receive the support they need to thrive in Canada’s evolving economic landscape.