The Canadian Federation of Agriculture (CFA) says it's pleased that the Canadian Senate voted in favour of Bill C-208’s adoption Tuesday evening.
Brandon-Souris MP Larry Maguire's private member’s Bill addresses long-standing barriers that make it more costly to transfer a farm to a family member than to a third party. CFA expects the bill should receive rapid Royal assent.
CFA President Mary Robinson says with billions in family farm assets needing to change hands in the coming years, the passage of this Bill comes at a critical time for the sector.
“The average age of canadian farmers, now at over 55 years, continues to climb and farm debt is at an all-time high. If we want to ensure the next generation of family farms is in strong financial health to capitalize on the immense opportunities facing our sector and drive Canada’s economic recovery, we cannot burden them with undue tax liabilities from day one,” commented Robinson. “This is tremendously positive news for farm families, who will now will not have to face an additional tax bill, potentially in the hundreds of thousands of dollars. This reduced financial strain on the next generation will directly contribute to a more robust and vibrant Canadian Agriculture sector.”
More than 95% of Canadian farms are owned and operated by Canadian farm families.
CFA says Bill C-208 essentially ensures that intergenerational farm transfers receive the same capital gains treatment as those businesses selling to an unrelated party, rather than treating the difference as a dividend that is taxed at a higher rate and cannot access the lifetime capital gains exemption.
“We have never been seeking preferential treatment for family farms but have been seeking to ensure the Income Tax Act puts intergenerational farm transfers on a level playing field as those selling to a stranger," added Robinson. "On behalf of the farming families across Canada , we are appreciative that our long-standing recommendation to remove this barrier to smooth family farm transfers has reached a successful conclusion. We thank all the MP’s, Senators, and in particular MP Larry Maguire & Senator Diane Griffin, who supported and tirelessly advocated on behalf of Canadian farmers."Click here to see more...