Last week's federal tax announcements temper several concerning changes being proposed to Canada's Income Tax Act. "Farmers have been especially alarmed about the proposals that impact small business corporations, including farms," says Jack Froese, President of the Canadian Canola Growers Association (CCGA). "The changes announced last week help to alleviate some of the anxiety over those adjustments."
Of particular worry for farmers are the impacts that the proposed changes could have on succession planning, exiting the farming business and farmer retirement. "As originally proposed, the changes would have had shackled agriculture's ability to transfer farms to the youth in our industry, while greatly reducing retirement options for farmers who have heavily invested in their farm's growth and succession plans," says Froese.
Last week, Finance Minister Bill Morneau and Agriculture and Agri-Food Minister Lawrence MacAulay announced a rollback on proposed changes to the lifetime capital gains exemption as well as 'measures relating to the conversion of income into capital gains'. "These changes move us in the right direction and show that our collective voices are being heard in Ottawa," says Froese.
Other modifications announced by the Minister of Finance include clarification on how prior investment income will be treated, a threshold established on passive income, and a reduction in the small business tax.
"We're pleased about the reduction in the small business tax," says Froese. "That will help all small business keep more of their income for investment and growth."
Froese acknowledges that the groundswell of farmer concern for the tax proposals has made a difference in changing the course of the tax plan, but notes that more details are needed to fully understand the implications.
CCGA will continue working with other stakeholders across agriculture to assess the impacts and hopes to work with the Ministers of Finance and Agriculture as the proposals move forward. "While progress has been made, our work on this file will continue to bring the farmer voice to the table."
CCGA represents more than 43,000 canola farmers on national and international issues, policies and programs that impact farm profitability.
Contact:Kelly Green, Director of Communications
t: 204.789.8821 e: kellyg@ccga.ca