My Private Member's Bill, Bill C-208, passed second reading in Parliament and has now been sent to Finance Committee.
Receiving bipartisan support, Bill C-208 passed with 178 MPs voting in favour and 146 against. I was disappointed, yet not surprised, that it was only Members of the Liberal caucus who voted against this commonsense bill.
I have been a staunch advocate to change the Income Tax Act, which currently makes it more financially advantageous for a parent to sell their farm or small business to an absolute stranger than it is to their children.
Currently, when a person sells their small business or farm to a family member, the difference between the sale price and the original purchase price is considered a dividend. However, if the business or farm is sold to a non-family member, the sale is considered as a capital gain, which is taxed at a lower rate and allows the seller to use their lifetime capital gains exemption.
Bill C-208 will allow small businesses, farm families, and family fishing corporations the same tax rate when selling their operation to a family member as they would when selling to a third party.
If passed, this bill will allow for sustainable business and farm succession, secure the retirement savings of business owners and farmers who elect to sell their operation to a family member, and allow farms and local businesses to flourish with fewer unfair taxes. Currently, operators have to choose between a larger retirement fund by selling to a stranger and a smaller one by selling to a family member – this is not a choice they should have to make.
Farms and small businesses from across the country support this bill and I welcome the endorsements from the Canadian Federation of Agriculture, the Grain Growers of Canada, the Canadian Canola Growers Association and the Canadian Federation of Independent Business.
Click here for more information on my PMB.