Change was supposed to benefit family farms and fishing operations that sell to next generation
OTTAWA — Finance officials are in for a likely grilling at the House of Commons’ Finance Committee this Tuesday, following the department’s delay of a new law easing the tax penalty for the owners of farms, fishing operations and small businesses that sell out to family instead of strangers.
Private member’s Bill C-208 became the law of the land when it passed through both houses of Parliament this spring and received Royal Assent before the Senate rose for the summer on June 29. The Bill was, however, opposed by the Trudeau government.
On the eve of Canada Day, the Finance Department issued a press release stating it wouldn’t implement law until next year, to the outrage of the small business community. Parliamentary insiders suspect the department was pressured by the governing Liberals to dissuade Canadians from taking advantage of the change now because the Trudeau team intends to retroactively reverse the law if reelected with a majority this fall.
Finance Committee Chair Wayne Easter has called the upcoming special July 20 session in response to the bureaucratic maneuver. The Prince Edward Island MP didn’t disagree when Farmers Forum asked if he intended to “call on the carpet” those Finance officials bucking the change of law.
“I believe strongly in the supremacy of Parliament. Cabinet can do nothing without the will of Parliament, nor can departments, so we’ll discuss that at a two-hour meeting … with the law clerk and a few others,” said Easter of the planned morning session, to be followed in the afternoon with Finance officials in front of the committee, though not Finance Minister Chrystia Freeland herself.
“I want to hear from … officials on their press release, what do they mean?” added Easter, “because the Bill legally comes into place the day it receives Royal Assent.
“If they have concerns with the Bill, they should have put amendments to it when we asked them to at Finance Committee,” observed the 28-year MP, one of two Liberals who voted in favour of the legislation in the House of Commons. “We need some clarity for the small business, farming and fishing community, on what their intentions here (are) based on their press release,” he said.
Though he’s not running for reelection, Easter denied that plays a role in his freedom of action on this issue. “Anyone that knows me, this is not a change in how I operate at all,” he chuckled. “So I’m not going to change now.”
Drew Ostash, in the office of C-208 sponsor MP Larry Maguire, a Conservative, said the committee will examine if the government “can blindly ignore implementing the law” as well as retroactively reverse a tax law it doesn’t like. “It actually is quite clear cut, they can’t do it,” Ostash added.
The new law allows a farmer or small business owner to sell the enterprise to family members and have it treated as a capital gain, as opposed to a more highly taxed dividend. The prior law allowed only sales to strangers to qualify for the lower-taxed option.