AGRICULTURE IN THE 2023 FEDERAL BUDGET

Budget season has finally come to an end! Provinces and territories saw their budgets announced in February and March, and similarly, the federal budget was announced Tuesday, March 28. The Canadian Federation of independent Business (CFIB) had the opportunity to attend provincial and the federal budget pre-screenings to get a first-hand look at what is in store for agri-businesses, while representing their interests and connecting with policymakers.

HERE ARE SOME IMPORTANT POINTS IN THE 2023 FEDERAL BUDGET THAT MAY AFFECT YOUR AGRIBUSINESS:

As we expected, amendments are quickly on the way for Bill C-208: An Act to amend the Income Tax Act (transfer of small business, family farm, or fishing corporation). However, the details of the amendments remain vague in how they intend to ensure that small business transfers are legitimate in the eyes of the federal government. What we do know is that these changes have already passed as they were included into the 2023 budget itself. The changes will affect transfers that happen on or after January 1, 2024. For further clarification on the changes, CFIB has reached out to government officials.

Although there was not much in the 2023 federal budget for small businesses in general, what was in there did show that the federal government has begun listening to what small agri-businesses actually need in policy.

Starting in the 2024 tax year, business owners can transfer their business to a group of their employees much easier thanks to the tax changes coming to facilitate the creation of an Employee Ownership Trust. This is good news for 75 per cent of our CFIB ag members who are in support of this, and something that we have been lobbying for in government.

Next, the federal government has committed $34.1 million over the next 3 years to Agriculture and AgriFood Canada’s On-Farm Climate Action Fund to support the adoption of nitrogen management practices by Eastern Canadian farmers to reduce the need for imported nitrogen fertilizers. This comes on the heels of last year’s fertilizer emissions reduction targets debacle, where CFIB pushed for the government to make the targets non-mandatory and regionally adapted, while the government remained silent on their plans.

There is hope that this targeted funding to help farmers in the East who rely more heavily on nitrogen fertilizers will mean that it is less plausible for the reduction targets to be mandated and that there will be funding for a voluntary transition away from nitrogen fertilizers.

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“The government should not set nitrogen limits. Instead, they should be looking at how each farmer is producing crops in certain regions and that they can justify the amount of nitrogen fertilizer being applied”Livestock farmer, ON.

Lastly, the federal budget included additional funding will be provided to increase the interest-free limit for loans under the Advance Payment Program from $250,000 to $350,000, making it slightly easier for agribusinesses to invest in more costly inputs.

Overall, the budget seems to provide some stability and support for the agriculture sector. We are now keeping a close eye on whether these new budget items will provide agri-businesses with clarity, support, and improve the ease and cost of doing business.

There are a few other large policy plans coming for the agriculture sector. This includes the new $3.5 billion, 5-year, federal-provincial-territorial Sustainable Canadian Agricultural Partnership (previously titled the Canadian Agricultural Partnership) that came into effect April 1st and expires at the end of March 2028. Additionally, new strategies have recently been announced from the federal Standing Committee of Agriculture and Agri-Food (AGRI Committee) that focus on supporting agri-businesses across the country.

CFIB is working closely with members of the AGRI Committee to ensure that the positive strategies the Committee is looking at (previously lobbied for by CFIB, directly from our ag membership) actually make it into policy, helping your agri-business.

For more information on the federal budget and how it impacts small businesses, read CFIB’s news release: Federal Budget makes progress in lowering credit card fees for small business, available on the CFIB website in both English and French. Not a member? JOIN CFIB today for more help and information.

Taylor Brown is the Senior Policy Analyst, National Affairs & Agri-Business for the Canadian Federation of Independent Business (CFIB).

CFIB is Canada’s largest association of small and medium-sized businesses with 97,000 members (6,000 agri-business members) across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.