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Bill C-208 Amend the Income Tax Act
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BILL C-208
Amend the Income Tax Act (transfer of small business or family farm or fishing corporation)
Alistair MacGregor, MP Cowichan-Malahat-Langford NDP Critic for Agriculture and Agrifood, Rural Economic Development, Deputy Critic for Justice
The House of Commons recently voted on and passed Bill C-208, which will make it easier to pass the family business on to the next generation. Currently, when parents decide to sell their business to their children, the difference between the sale price and the price originally paid is currently considered a dividend. If they sell their business to an unrelated individual or corporation it is considered a capital gain. Unlike capital gains, a dividend does not include the right to a lifetime exemption and is taxed more heavily.
While this issue affects all small businesses, it also has a significant impact on farming and fishing corporations, both of which are important sectors in our riding. Family-run small businesses are the bedrock of many communities, and they have developed extensive relationships with residents and local suppliers. Making the legislative changes necessary to allow the generational transfer of a small business, farm, or fishing corporation without penalty is a meaningful gesture towards equity and fairness.
The average age of Canadian farmers is now above 55, and the challenges and opportunities these businesses face will carry into the next generation. It is a sector in which most remain family-owned; maintaining their financial health across generations is critical. Many farms must chase income from off-farm work or taxpayer support programs just to get by. What is also concerning is that we have lost two-thirds of our young farmers since 1991. We are looking at $50 billion in farm assets that are set to change hands over the next 10 years. 8,000 family farms have disappeared over the last decade. With increasing debt loads, family farms are being systematically destroyed in Canada, and we need to put measures in place that are going to help.
The Covid-19 pandemic has also disproportionally challenged small family-owned businesses, many of which did not qualify for government assistance and continue to navigate the challenges of provincially mandated restrictions. Small businesses are the backbone of the Canadian economy, responsible for 80% of the jobs in our economy. I appreciate the farming and fishing families and what they contribute to our region. I was proud to vote in favour of Bill C-208, which will have a measurable and positive impact for family-run businesses, when it was passed by the House of Commons, and I look forward to its speedy passage in the Senate.
Alistair MacGregor, Member of Parliament 126 Ingram Street #101, Downtown Duncan
