The Canadian Federation of Agriculture (CFA) is concerned about the negative impacts on family farms that will come from the delay to enact Bill C-208 as legislation.
The Finance Department has said that they are delaying the implementation of the Bill until January 2022, and will likely be making amendments in order to close potential tax loopholes.
Bill C-208 removes the tax burden that farmers face when transferring their farm to a family member. Prior to Bill C-208, there was a much larger tax burden facing farmers who had incorporated their operations and were looking to pass their farms over to a family member compared to those who transferred them to an unrelated third party.
“In our talks with the accounting community, this delay, and the uncertainty around exactly what the amendments will be, will force many farmers who were looking to transfer their farm to a family member to delay their retirement plans until 2022. If they transfer to a family member under the current rules, it can potentially cost them hundreds of thousands of dollars more in taxes compared to if this Bill was fulfilled,” said Mary Robinson, CFA President.
The Bill has received Royal Assent.
CFA says the primary concern is that the capital gains treatment afforded through Bill C-208 to inter-generational family farm transfers must be made clearly accessible as quickly as possible, as Parliament made its intentions clear through the passage of the bill.
“Ensuring farmers don’t continue to face this unfair penalty for transferring their farms to family members helps preserve the identity and financial stability of the Canadian family farm. With the average age of farmers now greater than 55 years, there is urgency here for the farming community. This is important legislation that will help safeguard our food production systems for our entire country,” added Robinson.
CFA has reached out to the Finance Department and says it will work to ensure that the intent of Bill C-208 remains intact and is a law as soon as possible.