QUESTION PERIOD — Finance
Capital Gains Inclusion Rate
June 17, 2024
Senator Gold, I asked you a question about the government’s awareness of the policy impacts the capital gains tax will have on farm families. You stated that the government is aware of the impacts, and as such the government was increasing the lifetime capital gains exemption for capital gains on the sale of a small business or farm by 25%. However, according to the Grain Growers of Canada, the average grain farm will pay additional capital gains and easily surpass the proposed $1.25 million lifetime capital gains. In addition, most young farmers taking over the family business will not be eligible for the proposed Canadian entrepreneurs’ incentive.
Given these issues, what further measures are the government considering to adequately support farm families and young farmers in light of the capital gains tax implications?
Thank you for your question. As you know, colleague, the government already has numerous programs available for farmers and producers. Although I can’t list all of them, let me cite a few as an example: the AgriInvest program that helps cover income declines and supports investments to help mitigate risk; the AgriInsurance program, which offers protection against production losses caused by hail, drought, flooding, disease and other national hazards; and the AgriStability program, which offers protection against declines in farm income as a result of low prices, rising input costs and production losses. These are just a few of the programs. I’m not aware of any further measures the government is considering with regard to the specific question you asked.
Senator Gold, statistics show that Canada is losing 700 to 1,000 family farms annually. Considering the proposed measures you just mentioned and previously mentioned may not sufficiently address financial challenges faced by farm families and young farmers, especially those with larger operations, when will your government wake up and put in place workable solutions to ensure that these crucial contributors to our agricultural sector are not disproportionately burdened by the capital gains tax?
Thank you for your question. As I said, I’m not aware of any plans for the government to make further changes to the capital gains tax. The government is aware that the measures will affect certain segments of our economy and society, notably farmers but not only farmers, and is not of the view that it is disproportionate in its impact.
