By Teresa Van Raay, Director, Ontario Federation of Agriculture

A significant portion of Canada’s economy is powered by small and medium sized businesses. In fact, according to Statistics Canada, what are known as SMEs represent 98 per cent of all Canadian businesses and employ about two-thirds of the Canadian workforce.

Many of these businesses also happen to be family owned – and often family-run as well. That’s certainly the case in agriculture, where the latest figures show that 98 per cent of Canadian farms are owned and operated by families.

It’s also no secret that Canada, like many countries in the Western world, has an aging population with an imminent wave of retirements as the Baby Boomer generation transitions out of the work force. In the agriculture sector, for example, statistics point to a potential of up to 40 per cent of farmers retiring by 2033.

That’s why planning for the future of a business is so important. Whether the ultimate outcome involves a transition to next-generation family members or to a new owner altogether, the process of transition or succession planning is one that takes careful thought and effort from both the incoming and outgoing owners.

The story is a bit more complex in agriculture because in most cases, farm business transition also involves the family home and often an agricultural legacy dating back multiple generations – so the stakes are also high emotionally.

What is surprising, then, is that approximately 66 per cent of farmers are not prepared for succession and don’t have a plan in place as to what it’s going to look like.

To help draw attention to this important topic and encourage farmers to start thinking about it, the Ontario Federation of Agriculture (OFA) has just wrapped up its third year of running a Financial Literacy and Farm Succession Planning Roadshow together with Farm Life Financial, a consultancy that specializes in this field.

This included a series of in-person workshops across Ontario as well as a virtual session that was recorded and is now available for viewing on the OFA website.

I’m a director on the board of the OFA, and I farm with my family near Grand Bend, where we raise pigs, and grow corn, soybeans, wheat and garlic.

My husband and I are still actively involved in the business, but we work alongside two of our kids who also play key roles in the farm – so I know first-hand how important and complex succession planning can be.

It’s not as easy as simply handing over the reigns or stepping away. In a family transition, the business must both provide for the retirement of the exiting generation as well as support a living for the next generation.

It’s also not always easy to step away from something that you’ve dedicated your life to building up; in the case of farming, it’s usually not just a business, it’s also a passion for agriculture and a love of the lifestyle that keeps us so committed to what we do.

If you’re not sure how to get started, a good place to get a sense of what it all means is by watching the video and reviewing the resources on the OFA website: ofa.on.ca/issues/succession-planning.

A few other tips that I’ve learned along the way:

• Keep the lines of communications open with the next generation, including any kids you have who don’t want to farm, and be honest with yourself about what your expectations are for retirement.
• Make sure you write things down, including any contributions your kids may have already made to the business.
• Have regular meetings as a team where you treat each other like co-workers and step away from your more traditional family roles or relationships.
• Consult with accountants, lawyers and financial planners. They are the experts in taxation, shareholder agreements, transition and financial matters and their advice will help guide your process – and likely save you some money while you’re at it.
• And finally, it’s never too early or too late to start. No matter how old your kids are, if you haven’t thought about developing a succession plan, now is as good a time as any to get the process going.

Tyler Brooks
Director of Communications and Stakeholder Relations
Ontario Federation of Agriculture
519-994-2578
comms@ofa.on.ca