As a voting associate board member, Standardbred Canada has been working with the Canadian Federation of Agriculture (CFA) by providing feedback to CFA as it pertains to the taxation proposals. Both Standardbred Canada and CFA welcome Monday's announcement by Prime Minister Justin Trudeau, Finance Minister Bill Morneau, and Small Business and Tourism Minister Bardish Chaggar that the 10.5% small business tax rate will drop to 10% in 2018 and 9% 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. We are 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 Monday'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. Through the CFA, Standardbred Canada 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 outstanding issues will be addressed in the near future.
(with files from CFA)