OFA is pleased that Bill C-208, which was introduced by Larry Maguire, Member of Parliament for Brandon-Souris has passed second reading. 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. This has been a consistent OFA policy years. OFA has long advocated for this change because the tax system should not provide financial dis-incentives to maintain the strong tradition of family farms in Ontario and Canada.
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 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 business in the family. OFA thanks MP Larry Maguire for supporting Canadian farmers and urges all Members of Parliament to throw their support behind Bill C-208.