OFA is pleased that Bill C-208, which was introduced by Larry Maguire, Member of Parliament for Brandon-Souris was passed by the House of Commons on Wednesday, May 12. The bill will need to be passed by the Senate before it becomes law. This Bill would amend the current wording in the Income Tax Act, which financially penalizes a farmer if they choose to transfer the farm business to a family member as opposed to an anonymous third party. OFA has long advocated for this change because the tax system should not provide financial disincentives to maintain the strong tradition of family farms in Ontario and Canada.
In October 2020, OFA submitted a letter to MP Larry Maguire supporting this Bill and its efforts to help facilitate family farm transfers to the next generation. Read the letter here.
Specifically, Bill C-208 would amend the Income Tax Act to allow farm businesses to be sold to the next generation and taxed at capital gains rates, which are much more preferable than the current dividend tax treatment for these transactions. OFA also supports the requirement that the child does not sell the shares of the farm corporation within 60 months. This will help preserve the new tax treatment for farm children who wish to keep the business in the family. OFA thanks MP Larry Maguire for supporting Canadian farmers and urges all Members of the Senate to support Bill C-208.