On Wednesday, Manitoba MP (Brandon-Souris) Larry Maguire's Private Member's Bill to lower taxes on family farm business transfers passed Third Reading in Parliament and has now been sent to the Senate.
Bill C-208 received bipartisan support with 199 MPs voting in favour and 128 against.
"It was an exciting day for all those farmers and small business owners who have been waiting a long time for this legislation," said Maguire. "We still have to get the bill through the Senate, but I am thrilled it passed Parliament, however, disappointed but not surprised the Liberal government voted against this common sense bill.
Currently, when a person sells their small business or farm to a family member, the difference between the sale price and the original purchase price is considered a dividend. However, if the business or farm is sold to a non-family member, the sale is considered as a capital gain, which is taxed at a lower rate and allows the seller to use their lifetime capital gains exemption.
"With the passage of C-208, parents will no longer have to be given a false choice of having to choose between a larger retirement package by selling to a stranger, or a massive tax bill because they sold to a family member – their own child or grandchild," added Maguire.
Organizations that supported the bill include Keystone Agricultural Producers, Insurance Brokers Association of Canada, Canadian Federation of Agriculture, the Grain Growers of Canada, the Canadian Canola Growers Association and the Canadian Federation of Independent Business.