OTTAWA - A Conservative led bill to lower taxes on family farm and business transfers passed Third Reading in Parliament and has now been sent to the Senate.
Bill C-208 was introduced by Larry Maguire, the MP for Brandon-Souris, and received bipartisan support with 199 MPs voting in favour and 128 against. It was mostly Members of the Liberal caucus who voted against the bill, including the Prime Minister, the Minister for Small Business, and the Minister of Agriculture.
“It is an exciting day for all those farmers and small business owners who have been waiting a long time for this legislation,” said Maguire. “We still have to get the bill through the Senate, but I am thrilled it passed Parliament, however, disappointed but not surprised the Liberal government voted against this common sense bill.”
Maguire has been a staunch advocate to change the Income Tax Act, which currently makes it more financially advantageous for a parent to sell their farm or small business to an absolute stranger than it is to their children.
Currently, when a person sells their small business or farm to a family member, the difference between the sale price and the original purchase price is considered a dividend. However, if the business or farm is sold to a non-family member, the sale is considered as a capital gain, which is taxed at a lower rate and allows the seller to use their lifetime capital gains exemption.
Maguire’s legislation allows for sustainable business and farm succession, secures the retirement savings of business owners and farmers who elect to sell their operation to a family member.
With the passage of C-208, Maguire said, “No longer will parents have to be given a false choice of having to choose between a larger retirement package by selling to a stranger, or a massive tax bill because they sold to a family member – their own child or grandchild.”
Farms and small businesses from across the country support this bill and Maguire welcomes the endorsements from the Keystone Agricultural Producers, Insurance Brokers Association of Canada, Canadian Federation of Agriculture, the Grain Growers of Canada, the Canadian Canola Growers Association and the Canadian Federation of Independent Business.