This week I voted in favour of C-274, which would have reduced the taxes paid by Westman residents when transferring family farms or small businesses to family members; however the Trudeau Liberals defeated the Bill.
Westman residents deserve fair succession tax laws on their family-owned small business or farm.
Currently, farms and small business owners pay higher taxes if they sell to their children rather than a stranger. If an owner sells to a stranger, the difference is recognized as a capital gain and is taxed at a lower rate.
In Canada, when an individual sells a business or farm to a family member, the difference between the sale price and the price originally paid is considered a dividend.
If the individual sells the business to an unrelated person, it is considered a capital gain. Consequently, transfers to family members are highly disadvantageous since they do not include the right to a lifetime exemption and is more heavily taxed.
This unfair situation penalizes small businesses and family farms.
Under the current rules, there is little incentive for parents to pass their business or farm down to their children.
This Bill would have made it so that owners are subject to equal tax Btreatment whether they sell to a family member or to a stranger. This would have made it easier for farms and businesses to be passed down to the next generation.
It is projected in the coming years that many farms or small businesses will change hands. An estimated 550,000 business owners are going to want to sell or transfer ownership of their business over the next decade.
According to the Canadian Federation of Agriculture, over $500 billion in farm assets are set to change hands over the next 10 years.
I will continue to stand up for Westman’s small business owners and farm families.
Even though the Liberals sat on their hands instead of supporting this legislation, I will always stand up for what’s in the best interests of our region.