Following is a statement from Canadian Federation of Agriculture (CFA) President Ron Bonnett in reaction to the announcement by Prime Minister Justin Trudeau, Finance Minister Bill Morneau, and Small Business and Tourism Minister Bardish Chaggar of small business tax changes.
"The Canadian Federation of Agriculture (CFA) welcomes today's announcement by Prime Minister Justin Trudeau, Finance Minister Bill Morneau, and Small Business and Tourism Minister Bardish Chaggar that the 10.5 per cent small business tax rate will drop to 10 per cent in 2018 and 9 per cent in 2019.
A reduced overall small business tax rate will help to drive growth in the agriculture sector and boost the competitiveness of Canadian farmers. As well, changes announced to 'Tax Planning Using Private Corporations' proposals are a positive sign that the government understands the concerns voiced by farm groups in recent months.
Simplifying the income sprinkling rules is a step in the right direction and farmers look forward to more clarity around tax changes. CFA is also pleased that the government will not proceed with limiting access to the Lifetime Capital Gains Exemption.
Minister Morneau has said that he'll ensure family farm transfers aren't affected by the tax changes and farm groups await details on how the proposals will be revised in this regard.
While today's news resolves some uncertainty, farmers remain apprehensive about other proposed tax measures, particularly on passive investments, which are vital for managing year-over-year risks due to weather or market-related volatility. CFA has also noted concern with plans that would affect the conversion of income into capital gains.
CFA executives are in regular contact with Finance Canada officials and other government representatives, and we understand these outstanding issues will be addressed in the near future."