Consultations close on tax planning proposals

John Barlow in July 2015. (

Calls from farm groups and federal opposition politicians for further consultations on a proposed overhaul of the private corporation tax system have been shut down in the House of Commons.

A motion Tuesday from Ontario Tory MP Pierre Poilievre, vice-chair of the Commons finance committee, calling for consultations to continue beyond their Monday deadline through to Jan. 31 next year, went down to defeat by a 198-89 vote.

“To try to make these substantial changes in just four months is simply impossible. How can (the government) say that it is listening to Canadians when a vast majority of our farmers and ranchers are in the fields during harvest?” John Barlow, the Tories’ associate ag critic, said in the Commons.

“Many of our professionals and small business owners simply are not paying attention to these things during their busy summer season,” he said, speaking to the motion.

However, the motion came on the same day as Finance Minister Bill Morneau, in a release announcing the end of the consultations, pledged to limit the proposed changes’ effects on incorporated family farms and other small businesses.

In Tuesday’s release, Morneau reiterated that the current tax system for private corporations is “unfair” in that “an incorporated professional making hundreds of thousands of dollars a year who takes advantage of the current rules could end up paying a lower tax rate than a middle class employee on salary.”

The government, he said, is “going to fix this, while taking into account the feedback received during these consultations. In particular, we will act on what we’ve heard from small business owners and hard-working middle class farmers and fishers.”

The focus of the government’s planned changes, he said, is not small businesses or farms but “a small number of wealthy incorporated individuals.”

Morneau’s statement Tuesday echo those he made last week to reporters following a Commons finance committee meeting on the tax proposals.

The government said Tuesday the “principles” behind its next steps include “recogniz(ing) the importance of maintaining family farms, and work(ing) with Canadians to ensure we don’t affect the transfer of a family business to the next generation.”

Speaking for the government on the Tories’ motion Tuesday, Jean-Claude Poissant, the parliamentary secretary for agriculture, said the proposed tax changes “will not increase the tax rate for farms” and “will have no impact on the ability of farmers to incorporate, invest, and pay family members salaries to work on their farm.”

Farm owners, he added, will also “continue to benefit from a lifetime capital gains exemption of up to $1 million for their farm properties.”

The government, he said, “listened to farmers’ views to determine if and how it will be possible to transfer farm businesses to the next generation. I can guarantee that we will be considering the agricultural sector’s perspectives as we move forward.”

Farm transfers are among the points of concern for farmers, as Ontario NDP MP Tracey Ramsey noted in the Commons, citing a farmer in her riding who’d said he and his wife had “taken on payments to be able to buy the farm from his parents.

“They have a 16-year commitment to do this, and now they are very worried that they have made the wrong decision and will pay the price for the government’s complete lack of understanding about farm management.”

Farm groups such as the Canadian Federation of Agriculture, which had previously called for extensions on the government’s consultations, expressed relief at the “change in tone” from Morneau.

“But I think the thing is now that’s got to be followed up with real action to make sure the proposals are amended or farms are exempted from some of the provisions of these tax laws,” CFA president Ron Bonnett told the Manitoba Co-operator last week. — Network


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