Agriculture ministers from seven out of ten provinces are calling on the federal government to immediately reverse changes to the capital gains tax that they say are hurting farmers and the agriculture sector.
As of June 25, the annual capital gains inclusion rate – the taxable portion of a capital gain, such as the sale of farm property – was raised from one-half to two-thirds for individual capital gains above $250,000, and from one-half to two-thirds for corporations.
Ministers from Saskatchewan, Alberta, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Manitoba issued a joint release on Friday asking their federal counterpart, Lawrence MacAulay, to make agriculture a priority at the federal cabinet table and to reverse the capital gains changes.
Ministers from Quebec, B.C. and Newfoundland and Labrador, as well as the territories, were not part of the joint public statement.
Appearing before the House of Commons agriculture committee in late May, MacAulay acknowledged the government did not hold consultations on the impact of the change in the agriculture sector prior to announcing it in the federal budget in April. He also told the committee he wasn’t aware the capital gains change would be included in the budget.
While the Canada Revenue Agency has implemented the tax changes, the standalone legislation behind the inclusion rate increase was only introduced on June 10 and will be up for debate in the House of Commons when MPs return from their summer break.
Provincial ag ministers’ comments:
“We must work with our producers, ensuring their success and the proposed changes to capital gains taxes will make it harder for us to do just that. It is our position that the federal government reverse this harmful policy and work with producers and provinces to keep our agriculture sector strong and vibrant.” – Saskatchewan’s Minister of Agriculture David Marit
“These changes will unfairly burden our farmers and ranchers, who are already facing significant challenges. The federal government must reconsider these measures as they threaten the long-term viability of Canada’s agricultural sector and the livelihoods of those who depend on it.” – Alberta’s Minister of Agriculture and Irrigation RJ Sigurdson
“The Ontario approach has always been to reduce taxes and red tape for farmers, agricultural employers, and agribusiness stakeholders. Raising capital gains taxes at a time when so many farmers are approaching retirement and managing farm succession planning is a serious mistake and our government opposes it unequivocally.” – Ontario’s Minister of Agriculture, Food and Agribusiness Rob Flack
“The New Brunswick government has always been supportive in providing resources for farmers to assist with succession planning. At a time when the average age of farmers is 57, we must provide policies which encourage our young people to engage in the sector. We must make farming more enticing and eliminate the obstacles impeding entry by supporting the succession of farmers.” – New Brunswick’s Agriculture, Aquaculture and Fisheries Minister Margaret Johnson
“A driving force for most farmers is to provide an opportunity for the next generation to carry on the family tradition. Changing the capital gains structure will harm the farming industry by stripping value from the family farm through increased taxation. Now is the time we should be investing in our agricultural industry and make it easier to farm. The changes to the taxation of capital gains adds to their burden and should be reconsidered.” – PEI Minister of Agriculture Bloyce Thompson
“Everyone can agree that local food production and food security are vitally important. With an aging agricultural workforce, now is the time to encourage young people who are interested in farming and food production. The federal government’s proposed capital gains tax could have a significant impact on farms and farmers and their succession plans.” – Nova Scotia’s Agriculture Minister Greg Morrow
“Manitoba stands with producers who are especially being hit hard by these changes to the Capital Gains Tax. After years of succession planning, long-time producers should be able to retire knowing that their children have the opportunity of becoming the young farmers that will feed the next generation of Canadians. Manitoba has gone to great lengths to reduce costs for producers, including lowering the cost of crown lands and freezing the provincial gas tax, and this change will only increase costs for producers who are already facing enormous challenges.” – Manitoba’s Agriculture Minister Ron Kostyshyn
