By Cam Lee

Provincial ag ministries unite expressing concerns about proposed capital gains tax changes

Aug 9, 2024 | 3:00 PM

Seven provinces, including Saskatchewan, have expressed their concerns about changes to the capital gains tax proposed in the 2024 federal budget, and what those changes could mean to the agricultural sector.

Ministers of Saskatchewan, Alberta, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Manitoba all expressed their misgivings at the annual conference of Federal, Provincial, Territorial (FPT) Ministers of Agriculture last month in Whitehorse, Yukon.

Provinces raised the topic at a roundtable discussion at the meeting, saying the changes would target producers and their succession plans.

Provincial Agriculture Minister David Marit said agriculture is the backbone of Saskatchewan’s economy.

“We must work with our producers, ensuring their success and the proposed changes to capital gains taxes will make it harder for us to do just that. It is our position that the federal government reverse this harmful policy and work with producers and provinces to keep our agriculture sector strong and vibrant,” Marit said.

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Alberta Minister of Agriculture and Irrigation RJ Sigurdson said the changes would unfairly burden farmers and ranchers and threaten the long-term viability of Canada’s agriculture sector and those whose livelihoods depend on it.

Rob Flack, Ontario’s Minister of Agriculture, Food and Agribusiness, said raising capital gains tax when so many producers are approaching retirement and managing farm succession planning would be a serious mistake.

The ministers say raising inclusion rates from one-half to two-thirds for individual capital gains above $250,000, and doing the same for corporations, would penalize farming operation transfers. They add farmers and ranchers planning to sell their assets for retirement would also see their plans diminish, and the changes to the capital gains tax would jeopardize the long-term viability of family farms unable to keep pace with tax measures.

The ministers, in a joint news release, cite a recent study from RBC that suggests 40 per cent of farm operators will retire by 2030, and they believe the federal government should make it easier, not more difficult, for intergenerational ag sector transfers.

The release said the pace of the changes, and the lack of consultation gives farmers little time to decide how to adjust their approach to succession planning.