Immediate equipment write-offs and expanded farm succession rules welcomed, but profitability and grain transportation remain concerns.
Canadian grain farmers could benefit from new tax measures aimed at encouraging farm investment and making it easier to transfer agricultural property to the next generation, but the industry says Budget 2026 leaves several major challenges unresolved.
Grain Growers of Canada (GGC) welcomed measures in the federal budget that could help producers invest in machinery, buildings and other assets while providing greater flexibility for farm succession.
At the same time, the organization is calling on Ottawa to do more about the immediate pressures affecting farm profitability and Canada's ability to move grain reliably to export customers.
“Budget 2026 gets important pieces right for grain farmers,” said Kate Sauser, interim executive director of GGC. “Permanent immediate expensing gives producers more certainty to invest, and the broader rollover provisions recognize the different ways family farms transition.”
Sauser said the focus now needs to turn to implementation, including clear eligibility requirements, accessible programs and infrastructure investments that produce measurable improvements for farmers.
Immediate equipment write-offs could support farm investment
One of the measures with direct implications for producers is the government's Productivity Mega Deduction.
Budget 2026 makes immediate expensing permanent for a broader range of eligible capital investments acquired on or after Sept. 15, 2026.
For farmers, eligible investments can include major pieces of machinery and infrastructure such as tractors, combines, seeders, crop sprayers, silos and certain farm buildings.
Instead of depreciating an eligible asset for tax purposes over a number of years, qualifying businesses could deduct the cost in the year the property becomes available for use.
That doesn't reduce the actual purchase price of farm equipment, but accelerating the tax deduction could improve the economics and timing of investments for producers considering major capital expenditures.
The federal government says its broader Productivity Mega Deduction is intended to lower Canada's marginal effective tax rate on new business investment and encourage businesses to invest, expand and improve productivity.
More options for transferring the family farm
Another significant change involves farm succession.
Beginning Jan. 1, 2027, Budget 2026 proposes expanding the tax-deferred rollover for qualifying farm property to include transfers to nieces, nephews, grandnieces and grandnephews.
The measure recognizes that farm succession doesn't always involve a transfer directly from parents to their children.
The government estimates the expansion of the intergenerational farm and fishing property rollover will represent $65 million in federal revenue impacts over the five fiscal years beginning in 2026-27.
Proposed changes to the Canadian Agricultural Loans Act are also intended to make capital more accessible, support intergenerational farm transfers and reduce some administrative requirements.
Moving grain remains a major concern
For Canada's export-dependent grain industry, GGC says investment incentives are only part of the competitiveness equation.
Budget 2026 continues Ottawa's focus on diversifying Canada's international trade relationships and investing in trade infrastructure. It includes previously announced trade corridor funding as well as projects linked to the Port of Vancouver and Port of Churchill.
The budget also proposes investments in digital trade processes and better supply-chain data and analysis.
GGC supports the direction but argues that the ultimate measure of success will be whether infrastructure serving the grain sector is actually built and whether farmers see a more dependable route to international customers.
Labour disruptions remain part of that concern.
The budget points to Bill C-39, the Building Canada Strong Act, as part of the government's effort to modernize federal labour relations. Introduced in September, the legislation proposes significant changes to the Canada Labour Code, including changes to federal intervention in labour disputes, earlier bargaining requirements and a special mediator process.
GGC says the legislation does not, however, contain all of the protections being sought by the Keep Grain Moving coalition. Those requests include stronger maintenance-of-activities requirements, earlier intervention triggers and binding mechanisms for resolving disputes.
For grain farmers, disruptions involving Canada's railways and ports can quickly become farm-level problems when crops cannot move to customers.
GGC says farm costs remain unresolved
GGC is also cautioning producers that the investment measures shouldn't overshadow continuing pressure on farm margins.
“The ability to write off a piece of equipment immediately matters, but a tax measure cannot solve the full cost and risk picture on a grain farm,” said Scott Hepworth, GGC chair and a Saskatchewan grain farmer.
“Farmers still face high fertilizer and fuel costs, limited visibility into export demand and losses when labour disruptions stop grain movement. We need the government to finish the job with measures that protect farm cash flow and keep our grain moving.”
Among GGC's concerns, Budget 2026 does not remove Canada's tariffs on Russian fertilizer or introduce a dedicated response to exceptional on-farm fuel costs.
The organization also continues to advocate for mandatory export sales reporting, stronger business risk management programs, long-term public agricultural research capacity and action on trade barriers affecting access to international markets.
GGC is additionally seeking clarification about the exclusion of agricultural businesses from the proposed Canada Growth Incentive.
The organization says it plans to work with the federal government as Budget 2026 measures are implemented, while continuing to press for policies it believes are needed to keep Canadian grain farms competitive.
For producers considering equipment purchases or farm succession, some of the budget measures could eventually provide meaningful tax and planning opportunities. However, eligibility, timing and individual tax circumstances will matter, making professional tax and financial advice important before farmers make major investment or succession decisions.