It won’t be a happy new year for more than 130,000 Canadian farmers until federal tax changes poised to eat into their retirement funds are taken off the table, farming advocates say.
“These changes are subject to parliamentary approval and should not be implemented without the express approval of Parliament,” a Grain Growers of Canada news release said last week.
The association, which was also speaking on behalf of the country’s canola growers and ranchers, warned last spring that retiring farmers faced paying 30 per cent more into government coffers because of an increase in the percentage of asset sales subject to capital gains tax.
For many farmers, their future retirement fund is directly linked to how much they get for their farms once they decide to sell. The Grain Growers have said an 800-acre Ontario farm that was purchased nearly 30 years ago and is being sold in the current market would require the vending farmer to pay $1.2 million in additional taxes under the capital gains changes.
Prior to the changes, 50 per cent of profits earned from sales of assets like land and stocks were subject to federal tax.
The amount subject to the levy was increased to 66 per cent, following changes put forward by former finance minister Chrystia Freeland.
Freeland, who is among the contenders to replace Justin Trudeau as Liberal leader, said last year raising the taxable amount to two- thirds would reap nearly $20 billion over five years for the federal government, and about $11.5 billion for the country’s provinces and territories.
In its news release last week, the Grain Growers said they continue to oppose the increases, which cause “uncertainty . . . complexity, and delays for farmers trying to navigate the inter-generational transfer of farm assets.”
“The average age of Canadian farmers is now over 55 years old, and tens of billions of dollars in farm assets are set to change hands over the next decade,” the association said.
“We call on all political parties to support the reversal of the capital gains inclusion rate increase for farmers,” it added.