Ottawa – The Canadian Federation of Agriculture (CFA), who represent over 190,000 farm families across Canada, is disappointed with the Government of Canada’s decision to ignore calls to delay implementation of changes to the recently announced capital gains inclusion rate. By announcing the proposed tax changes in the Federal Budget on April 16th with an effective implementation date of June 25th, the Government of Canada is not providing Canadian farm businesses with enough runway to fully assess the potential implications of these changes for farm succession tax planning purposes and adjust accordingly.
While the Lifetime Capital Gains Exemption (LCGE) was increased to $1.25 million, the capital gains inclusion rate was also increased from one half to two thirds. CFA's concern is that by increasing the capital gains inclusion rate we are neutralizing the increase to the LCGE threshold and jeopardizing the success of genuine intergenerational farm transfers and the financial health of the next generation of farms across Canada.
“By ramming these very significant tax changes through while farmers are in the field planting, we aren’t giving producers enough time to fully assess the implications for their families and their businesses,” said Keith Currie, CFA President.
With 40% of Canadian farm operators set to retire over the next decade, we need to ensure that the proposed personal income tax measures announced in Budget 2024 do not jeopardize the transfer of assets from one generation of farmer to another, but rather encourage the next generation of farmers to take up the calling, drive much needed rural economic activity and help the agriculture sector reach its growth potential.
Source : CFA-FCA