Capital Gains Exemption Tops List of Ag-Related Pieces in Federal Budget — Gerry Ritz on what's in it for farmers


Farmers and fishing businesses will save a projected $50 million in taxes over the next five years thanks to another increase to the Lifetime Capital Gains exemption announced in the federal budget this week.

The exemption, which helps farmers reduce their tax burden when transferring ownership of farm assets, has been raised to $1 million for next year, an increase from $813,600 for 2015 (the exemption was raised to $800,000 in 2014 and indexed according to inflation.)

“One of the most significant items for agriculture in this budget is the increase to the Lifetime Capital Gains, which CFA has been advocating for some time. Last year’s budget saw a small increase in this area, but the funds allocated this year will have a more meaningful impact,” said Ron Bonnett, president of the Canadian Federation of Agriculture.

Agriculture Minister Gerry Ritz
Agriculture Minister Gerry Ritz

In the interview below, Agriculture Minister Gerry Ritz joins Kelvin Heppner to discuss the capital gains exemption and  other ag-related pieces in the budget, including an additional $12 million over the next two years for the AgriMarketing program. This is in addition to the $341 million committed to the program under Growing Forward 2. Another $18.1 million over two years will also be used to expand the Market Access Secretariat in its work maintaining and improving export opportunities. These funds will be used to “introduce new agriculture trade commissioners abroad and to play a more active role in setting international science-based standards.”

Ritz also talks about how the budget fits into the upcoming election campaign, potential ag issues in the election and the early work on the next ag policy framework — Growing Forward 3:

Budget snippets for Canadian agriculture:

  • Increasing the lifetime Capital Gains Exemption to $1 million for farm owners.
  • $18 million over two years, starting in 2016-17, for the Market Access Secretariat and its work promoting trade.
  • $12 million over two years, starting in 2016, for the AgriMarketing program (in addition to $341 million committed through Growing Forward 2.)
  • Reducing the small business tax rate from 11 per cent to 9 per cent by 2019.
  • To provide manufacturers with an accelerated CCA at a rate of 50 per cent on a declining balance basis for eligible assets acquired after 2015 and before 2026. Food processing is the largest manufacturing industry in Canada.
  • $42 million over five years, starting in 2015–16, and $9.3 million per year after to expand the Canadian Trade Commissioner Service.
  • Starting in 2016-2017, $10 million per year will go to NSERC for collaborative research between companies and academic researchers focusing on natural resources, energy, advanced manufacturing, environment and agriculture.

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