By Mark Wales, Director, Ontario Federation of Agriculture
The federal government got an earful about its proposed tax changes that would have devastating impacts on incorporated farm businesses in Canada. It appears they have listened as Finance Minister Bill Morneau has now announced a reduction in small business tax rates, as well as the abandonment of other proposals that would have impacted family farm transfers.
When the proposed changes were announced in July, with consultations open until October 2, the Ontario Federation of Agriculture (OFA) encouraged members to let the federal government know the serious implications many of the tax changes would have to the estimated 25% of farm businesses in Ontario and Canada that are incorporated. And members responded in droves – a signal of the devastating impact these changes would inflict. More than 600 people submitted a letter to local MPs through OFA’s Act Now website.
OFA welcomed the statement by the Canadian Federation of Agriculture (CFA) on October 16 reacting to the joint announcement by Prime Minister Trudeau, Minster Morneau and Small Business and Tourism Minister Bardish Chaggar about small business tax changes.
CFA President Ron Bonnett stated that reducing the 10.5% small business tax rate to 10% in 2018 and 9% in 2019 will help drive growth in agriculture and boost the competitiveness of Canadian farmers. It should be noted that this tax reduction was actually following through on a campaign promise by the Trudeau government.
Other changes appear to indicate that the voice of Canada’s farmers and farm groups were heard over recent months. Minister Morneau has announced all capital gains rules are being removed from the draft legislation and this is good news for agriculture. They heard our concerns and aren’t changing the existing family farm transfer rules.
These tweaks to the proposed changes to private corporation taxes are an encouraging first step, and demonstrate how vital it is to work together with strong messages to ensure the voice of agriculture is clearly heard in the halls of government.
OFA is also encouraged because these announcements have positive implications to the rural small businesses that support our agricultural industry.