The Canadian Entrepreneurs' Incentive program is undergoing some changes, but agriculture groups say that's not enough to help out farmers.
That's meant to help out small business owners with a tax break, but that's been out of reach for many farmers.
Kyle Larkin, the Executive Director at the Grain Growers of Canada, says now that's been changed but it may not be enough.
"There's a few key changes, one that farmers should be aware of is that farmers can actually now access this incentive, so previously, because of a founder clause that they had in there most grain farmers wouldn't be able to access this incentive. Now they can because of changes that they made. That's a key change."
"The other one is the original phase-in was going to be until 2034. Now they've changed it till 2029. So all these changes and what we've said is this will benefit certainly some farmers, but most farmers because of the capital gains tax increase, the increase in the inclusion rate from 50 per cent to 66 per cent, are still falling short and are still going to have to pay extra taxes on top of everything else that they're they're already paying, so there's still a big challenge with this."
Larkin details two other concerns that he has with the incentive and what it does for farmers.
"There's two big concerns that we continue to have with it. Number one is it further complicates the tax code. So while most accountants and economists say that Canada's tax code should be more simplified, this actually further complicates the tax code, which means that all farmers across the country, will actually be paying more fees, more accountants fees, and more legal fees on a yearly basis when they need those services, but especially when they're looking at succession and they're looking to transition their farm to the next generation"
"Number two is we're concerned with the patchwork approach around all of this. We had a capital gains tax increase, we have new taxes for if you have capital gains above $250,000, we have this new Canadian Entrepreneurial Incentive. It's super complicated and it's very much a patchwork approach. We personally believe that things should be more simplified for farmers. Farmers already have a difficult enough life making a profit at the end of the year."
A simplified approach is the best for Larkin as he says many farmers have different circumstances.
"Every farmer's situation and financial situation is different. Some farmers have multiple shareholders, some may only have one, some are incorporated, some are sole proprietorship, so it's difficult to really draw a line as to who will benefit from this. I would recommend all farmers speak to their accountants to figure out if they'll benefit, or if they'll still be seeing a tax increase, but our general research en-mass shows that most farmers are still going to be paying more in tax because of the capital gains tax increase."
Larkin says the best thing the federal government can do is revert the capital gains inclusion rate and make legislation simpler.
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