The federal government is delaying the implementation of its higher capital gains inclusion rate until 2026, but the Grain Growers of Canada (GGC) wants Ottawa to go further and scrap it altogether.
“Delaying bad policy doesn’t fix bad policy – it just drags out uncertainty, derails succession planning, and challenges the future of family farms," GGC said in a statement. “When this tax hike takes effect, it will also target farmers’ retirement plans, move the goalposts for the next generation of producers, and further complicate the tax code, driving up accounting and legal expenses for all farmers.”
Federal Finance Minister Dominic LeBlanc on Friday announced Ottawa is deferring — from June 25, 2024 to January 1, 2026 — the date on which the capital gains inclusion rate would increase from one-half to two-thirds on capital gains realized annually above $250,000 by individuals and on all capital gains realized by corporations and most types of trusts.
Farm organizations across the country have universally expressed opposition to the higher capital gains inclusion rate, arguing it would make farm succession planning less financially viable and present significant challenges for farmers reinvesting in their business.
In its statement, GGC said the tax hike has already forced many family farms to sell early and will increase costs for most family-run grain farms that produce most of the food that Canadians and the world rely on, once implemented next year.
In fact, according to GGC research, an 800-acre farm purchased in 1996 in Ontario would incur nearly $1.2 million in additional taxes if sold today, while a 4,000-acre farm in Saskatchewan would face an increase of just over $900,000.
Source : Syngenta.ca