Bill C-208, which would amend the Income Tax Act for the transfers of small businesses, family farms, or fishing corporations, passed its third reading in the House of Commons on Wednesday, May 12, sending it to the Senate for approval.
The private member’s bill, introduced by Manitoba Conservative MP Larry Maguire, would make it more affordable for producers to sell their farms to a family member instead of selling to a non-family member.
“Very simply, it levels the playing field for a family that wants to sell to their son or daughter or grandchild as opposed to selling to a complete stranger,” explains Maguire in the interview below.
The bill received support at third reading from Conservative, New Democrat, Bloc, and Green party members, as well as 19 Liberal MPs.
The Agricultural Producers Association of Saskatchewan (APAS) and Ontario Federation of Agriculture say they are very pleased that Bill C-208 has been approved by the House of Commons.
“The passing of this bill in the House is good news for producers in Saskatchewan and across the country,” says Todd Lewis, president of APAS. “For too long, it’s hasn’t made sense that it’s cheaper to sell your farm to a stranger than to your son or daughter.”
Right now, when a producer chooses to sell their farm to a family member, the sale is considered a dividend between the original purchase price and the sale price. If the producer sold to a non-family member, the sale would be seen as capital gain, which is taxed at a lower rate than a dividend.
APAS estimates that 95 per cent of Saskatchewan farming operations are family-owned and operated and that the number of producers nearing retirement is increasing. Many of these family farms want to transfer their assets to a family member to maintain the farm as a family operation, says the organization.
The Ontario Federation of Agriculture is also pleased the bill has passed to the next stage and supports the requirement that a child who has bought a farm not sell the shares of the farm corporation within 60 months. OFA states that this wording will preserve the new tax treatment for farm children who wish to keep the business in the family.
Bill C-208 will now need to be passed by the Senate before it comes law. Maguire says he would hope to see the bill move ahead in the Senate before Parliament rises for summer in June.
Listen to Brandon-Souris MP Larry Maguire discuss the passage of Bill C-208 in the House of Commons, expectations for it in the Senate, and more: