Pour quiconque s’inquiète de la disparition des fermes familiales au Canada, les changements fiscaux imminents des libéraux sont un désastre imminent.
The Liberal government’s proposed tax changes will likely cause the greatest destruction of wealth for Canadian farm families since the 1980s farm crisis. But unlike the crisis of the 1980s, from which farmers eventually recovered, the proposed changes are a permanent, structural change that will cause a drop in farmers’ income and net worth from which there will be no recovery.
Finance Minister Morneau and Prime Minister Trudeau have said that the proposed tax changes are aimed at wealthy Canadians who use “tax loopholes” to unfairly pay less tax than “middle class” workers. But the legitimate small business tax planning tools, which the Liberals plan to change, have been used for decades by small business entrepreneurs in all sectors across Canada to help manage and mitigate the financial risks associated with starting, building and selling their businesses.
The implications of these changes for all small business entrepreneurs are huge, but given the unique nature of farming, the impact on Canadian farm families will be especially severe. Farming, more so than most other businesses, rely on the entire family’s participation and support to succeed. Children, spouses and extended family members typically support the farm business, whether directly in the farm’s operations, or indirectly in unpaid, but essential ways. Canadian farm families typically incorporate as small businesses to enable them to efficiently share the income from their farm operations among family members. But the proposed tax changes will severely restrict a farmer’s ability to split income among family members, even though the reality for most farmers is that the entire extended family participates in one way or another in supporting the business.
Moreover, for most farm families, their primary (and sometimes sole) source of wealth for their retirement is their land. Because of the capital-intensive nature of farming and the volatility of most farm incomes, farmers often do not have significant other sources of retirement savings such as TFSAs, RRSPs and investment savings. By incorporating as small businesses, and having multiple family members as shareholders, farmers have been able to use legitimate tax planning tools to maximize capital gains exemptions and reduce the tax burden when it comes time to sell the farm to finance their retirement. The proposed tax changes will eliminate farmers’ ability to use multiple capital gain exemptions and will thereby dramatically reduce their retirement savings.
L'ampleur de cette réduction de richesse imminente pour les agriculteurs est difficile à estimer et dépend des circonstances individuelles, mais il n'est pas difficile d'imaginer que pour une famille agricole typique comme celle que nous côtoyons quotidiennement à Bonnefield, les modifications fiscales proposées pourraient détruire un un tiers, voire la moitié, de la richesse qu’ils ont accumulée au cours de leur carrière grâce à l’appréciation du prix des terres.
Bizarrement, les modifications fiscales proposées rendront bien plus avantageux, d’un point de vue fiscal, qu’un agriculteur vende son entreprise à un grand conglomérat, plutôt que de vendre la ferme à la prochaine génération et de la garder dans la famille. Le recensement de 2016 a montré que l'agriculteur moyen au Canada était âgé de 55 ans. Ainsi, au cours de la prochaine décennie, une partie importante des fermes canadiennes vont changer de mains.
At Bonnefield we often work with young farmers to help them finance the transition of their parent’s farm and expand their operations. The proposed tax changes will dramatically reduce the amount of after-tax cash available to retiring farmers et rendre plus difficile la transition de la ferme à la prochaine génération.
Pour quiconque s’inquiète de la disparition des fermes familiales au Canada, les changements fiscaux imminents sont un désastre imminent.
Everyone agrees that tax fairness is an essential principle for a civil democratic society like Canada. But one’s tax burden should not only be proportionate to one’s income. It should also take into account the risk and sacrifice entrepreneurs incur to earn their income, as well as the benefit to society that results from their entrepreneurial spirit. Canadian farmers represent the best of that entrepreneurialism and risk taking, and all Canadians benefit from a thriving agricultural sector.
Je vous exhorte à contacter le ministre Morneau, le premier ministre Trudeau et votre député local et à les exhorter à mettre fin à ces modifications fiscales désastreuses et mal conçues.