OTTAWA — Legislation ending a tax penalty incurred by farmers who sell their business to family — as opposed to outsiders — has passed third reading in the House of Commons. Bills C-208 heads next to the Senate.
“The passing of this bill in the House is good news for producers in Saskatchewan and across the country,” said Agricultural Producers Association President Todd Lewis. “For too long, it’s hasn’t made sense that it’s cheaper to sell your farm to a stranger than to your son or daughter.”
Bill C-208 will amend the Income Tax Act, making it more affordable for producers to sell their farms to a family member instead of selling to a non-family member. Right now, when a producer sells their farm to a family member, the sale is considered a dividend between the original purchase price and the sale price. However, if the producer sold their farm to a non-family member, the sale would be seen as capital gain, which is taxed lower than a dividend.
The number of producers nearing retirement is increasing, and many of these family farms want to transfer their assets to a family member to maintain the farm as a family operation.
C-208 is the private member’s bill of MP Larry Maguire (Conservative, Brandon-Souris), who resurrected what was an NDP member’s bill that never made it into law during a previous parliament.
Maguire’s Tory colleague MP Eric Dundas (Stormont-Dundas-South Glengarry) celebrated the bill’s passage, along with two others sponsored by members of the Tory caucus.
