Farmers Forum staff
OTTAWA — The Trudeau government’s planned increase in capital-gains taxes continues to cause confusion and consternation in farm country. As the beginning of June approached, important details of the impending tax hike — which is supposed to take effect June 25 — remained shrouded in a lack of information.
The measure made a media splash when announced as part of the April 19 federal budget, but the governing Liberals opted against implementing the hike through the actual budget bill itself. Instead, a separate capital gains bill will be brought forward, and Finance Minister Chrystia Freeland now says that will happen before parliament breaks for the summer. Until then, many aspects of the coming tax increase are a frustrating mystery to farmers, small business owners and their accountants.
“It’s very hard to advise (clients) when we don’t have legislation to read,” BDO Canada accountant and national agriculture taxation expert Kurt Oelschlagel said during a May 16 webinar hosted by the Ontario Federation of Agriculture.
All the same, Oelschlagel outlined how the proposed change will impose thousands of dollars in additional taxes on farmers who realize a gain on property sold, either corporately or individually.
The broadcast also served as a clinic of sorts on the near-obscene levels of complication in the Canadian tax code. “It’s a shit show,” an Eastern Ontario real estate developer later told Farmers Forum.
A recent membership survey by the Ontario Federation of Agriculture (OFA) identified reducing farm taxes as the number one policy priority for farmers across the province.
Noted OFA vice president Paul Vickers: “More than three quarters of survey respondents identified tax burden as their top concern – a sentiment that has been reinforced by the federal government’s proposed increase to Canada’s capital gains inclusion rate, which is the percentage of a capital gain that is included in a taxpayer’s income.”
For corporations and trusts, “the inclusion rate for all capital gains is proposed to increase from one-half to two-thirds,” Vickers said. “For individuals, the rate is proposed to increase to two-thirds for capital gains over $250,000 after deductions and exemptions.”
