It’s never too early or too late to start planning

By Teresa Van Raay, Director, Ontario Federation of Agriculture

A significant portion of Canada’s economy is powered by small and medium sized businesses. In fact, according to Statistics Canada, what are known as SMEs represent 98 per cent of all Canadian businesses and employ about two-thirds of the Canadian workforce.

Many of these businesses also happen to be family owned – and often family-run as well. That’s certainly the case in agriculture, where the latest figures show that 98 per cent of Canadian farms are owned and operated by families.

It’s also no secret that Canada, like many countries in the Western world, has an aging population with an imminent wave of retirements as the Baby Boomer generation transitions out of the work force. In the agriculture sector, for example, statistics point to a potential of up to 40 per cent of farmers retiring by 2033.

That’s why planning for the future of a business is so important. Whether the ultimate outcome involves a transition to next-generation family members or to a new owner altogether, the process of transition or succession planning is one that takes careful thought and effort from both the incoming and outgoing owners.

The story is a bit more complex in agriculture because in most cases, farm business transition also involves the family home and often an agricultural legacy dating back multiple generations – so the stakes are also high emotionally.

What is surprising, then, is that approximately 66 per cent of farmers are not prepared for succession and don’t have a plan in place as to what it’s going to look like.

To help draw attention to this important topic and encourage farmers to start thinking about it, the Ontario Federation of Agriculture (OFA) has just wrapped up its third year of running a Financial Literacy and Farm Succession Planning Roadshow together with Farm Life Financial, a consultancy that specializes in this field.

This included a series of in-person workshops across Ontario as well as a virtual session that was recorded and is now available for viewing on the OFA website.