Key tax proposals for 2024 affected by pausing parliament
The Ontario Federation of Agriculture (OFA) is advising farmers to be cautious when preparing their taxes this year.
With Prime Minister Trudeau stepping down and proroguing Parliament until March 24,Ontario farmers are learning the suspension of parliament impacts various proposed federal tax changes, including measures that affect the agricultural sector.
The government had proposed several tax reforms in the past year, including:
- An increase in the capital gains inclusion rate
- An increase in the Lifetime Capital Gains Exemption (LCGE)
- The introduction of the Canadian Entrepreneurs’ Incentive
- The reinstatement of the Accelerated Investment Incentive.
For now, these proposals remain just that—proposals—and are not yet law.
However, the Canada Revenue Agency (CRA) is still administering certain proposals in line with their policy, such as the capital gains inclusion rate increase and the LCGE increase, which are set to be implemented for the 2024 tax year.
If an election triggers a change in government before the proposals become law, they will be withdrawn and would need to be reintroduced by the new government.
Tax proposals the CRA will implement in 2024 include:
- An increase in the capital gains inclusion rate
- An increase in the Lifetime Capital Gains Exemption (LCGE)
Proposals that will not be implemented by the CRA in 2024 include:
- The Canadian Entrepreneurs’ Incentive
- The reinstatement of the Accelerated Investment Incentive.
The increase in the capital gains inclusion rate, scheduled for June 25, 2024, has raised concerns among farmers, particularly regarding intergenerational farm transfers.
The increase in the LCGE, from $1.016 million to $1.25 million, is generally supported by farming organizations. However, the other two proposals are still pending and may not be implemented in 2024.
OFA advises that ongoing monitoring of these developments is essential, and farmers will need to stay informed on any changes to these proposals.
Photo Credit: Nataliya Vaitkevich