The Ag sector is calling on the federal government to pause its capital gains changes saying it threatens the family farm.
Number crunching from the Grain Growers of Canada (GGC) says the capital gains inclusion rate changes will increase taxes by 30 per cent on family-run grain farms. The group says weeks of research by its farm tax accountants have distilled the dire numbers.
The Canadian Cattle Association (CCA), and Canadian Cattle Youth Council (CCYC) are calling on the Government of Canada to halt the move and study the proposal’s impacts.
The grain growers see the tax move as targeting farmers’ retirement plans, complicating intergenerational transfers, and threatening the long-term viability of family farms across the country.
“A 30 per cent increase in taxes on the family farm also dramatically increases the cost of farms, pricing out many families,” says Kyle Larkin executive director of GGC. “This puts the family farm at risk, as the only ones that can afford to pay millions of extra dollars will either be corporate farms or development companies.”
GGC sees a decline in Canadian family-owned farms, with a two per cent drop between 2016 and 2021, according to Statistics Canada.
The chair of Alberta Beef Producers, Brodie Haugan wants measures that support family farm transfers to ensure their continued success.
“We’re at a turning point in the industry,” says Haugan. “In 1991 the average age of farmers in Canada was just over 47 years old. It’s been steadily increasing since then, and now sits around retirement age. To ensure the success of Canada’s family farms, we need mechanisms that support family farm transfers.”
Grain Growers of Canada (GGC) is encouraging farmers to send letters to their Members of Parliament through the Protect Family Farms campaign.
The capital gains tax changes were brought up in April’s federal budget, and come onstream on Tuesday, June 25, 2024. The move will raise the inclusion rate on capital gains to 67 per cent for Canadians earning more than $250,000 through stocks or secondary properties, up from the current 50 per cent.
