Rising farm costs - calls to stop capital gains tax increase
Over 130,000 Canadian farmers and ranchers, represented by the Canadian Canola Growers Association, Canadian Cattle Association, and Grain Growers of Canada, are urging the Government of Canada to reconsider its proposed capital gains inclusion rate legislation.
Despite the Deputy Prime Minister and Minister of Finance tabling a Notice of Ways and Means Motion (NWMM) for a bill titled "An Act to amend the Income Tax Act and the Income Tax Regulations," these changes are still subject to parliamentary approval and should not be implemented without Parliament's explicit consent.
The average age of Canadian farmers is now over 55, with tens of billions of dollars in farm assets expected to change hands in the next decade.
As Canadian farms continue to grow, often supporting multiple households, many farmers are incorporating for tax and estate planning reasons.
Meanwhile, land and farm asset prices are rising, making it increasingly difficult for new farmers to purchase property due to soaring capital costs.
The associations express concern about the rapid implementation of these changes, the lack of consultation prior to the proposals, and the potential negative impact on the intent of Bill C-208, particularly in relation to the uncertainty surrounding capital gains treatment.
This uncertainty adds complexity and cost for farmers attempting to transfer assets between generations.
Although the proposed increase to the Lifetime Capital Gains Exemption limit for producers is a step forward, it does not fully address the broader challenges posed by the policy changes.
In light of these concerns, the farming associations are calling on the government to withdraw the NWMM and reinstate the previous capital gains inclusion rate.
They urge all political parties to support reversing the capital gains inclusion rate increase for farmers, ensuring a more stable and predictable environment for intergenerational transfers of farm assets.
Photo Credit: pexels-nataliya-vaitkevich