Proposed tax changes could hit farmers the hardest

Sep 21, 2017

The Liberal government’s proposed tax rules could pose a barrier to intergenerational succession of farm businesses

Proposed tax modifications have the potential to significantly affect farming families.

The intended purpose of the proposed changes is to ensure wealthy Canadians do not pay less tax than the middle class, according to yesterday’s CBC report. But critics caution these changes could drive family farms out of the industry by making incorporated operations less competitive and increasing the cost of succession planning.

As a result, producers are lobbying the Canadian government to exempt farmland from the new rules.

“To penalize the next generation for wanting to carry on a family farm is absolutely wrong,” Andrew Pedden, an Alberta farmer, said to CBC.

The government has set an Oct. 2^nd deadline for Canadians to voice their opinion on the changes. However, this timing could not be worse for producers, as many farmers are in the midst of harvest.

And producers are stressing that the government needs to take the time to methodically review potential changes.

“It’s important (for everyone involved) to … gain a clear understanding of what’s at stake. That includes looking at penalties for the many farmers who incorporate to access lower tax rates that allow them to re-invest in their operation. (Farmers) are also subject to more risk and lack benefits,” Lynn Jacobson, Alberta Federation of Agriculture president, said in CBC’s report.

The government is considering the proposed tax changes with farmers in mind and has made some allowances already, David Barnabe, Finance Canada spokesperson, said in an email to CBC.

“Farmers and other small business owners can continue to have family members actively involved in, and appropriately compensated by, the business,” said Barnabe.

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.