The Agricultural Producers Association of Saskatchewan (APAS) is calling for a pause on new federal government tax rules that have a major impact on the farm community.
In a release today, APAS said it is seeking immediate intervention from National Revenue Minister Marie-Claude Bibeau to halt new capital gains tax changes “until more substantial discussions can be held.”
At issue is the federal government’s decision to increase the taxable portion of capital gains to 66.7% from 50% for individuals and companies earning over $250,000 in capital gains. The measure, introduced as part of the federal budget in April, has not yet been officially approved in Parliament. However, the government began taxing at the higher rate in June, regardless.
The future of the higher inclusion rate has been further clouded by Prime Minister Justin Trudeau’s resignation and the proroguing of Parliament until March while the Liberal Party selects a new leader. The possibility of a spring federal election remains another major wildcard.
The higher capital gains tax inclusion rate has been roundly criticized by the agricultural sector, contending it increases the financial burden for farmers who typically rely on the sale of land, equipment, or quotas as part of succession planning.
“We have been taken aback by the pace at which these changes are being pushed without
parliamentary approval,” said APAS President, Bill Prybylski. “This creates a cloud of uncertainty for farmers, who are already facing numerous challenges. Immediate clarification and halting of these changes are crucial until a thorough discussion has been had in Parliament.”
Revenue Canada has reportedly said it will continue to collect the higher capital gains tax through the period of prorogation. Beyond that, it will be up to whatever government is in power to decide if it wants to continue. There has been no word on whether rebates will be offered if the measure is eventually killed.
“Right now, without Parliament approval, it's confusing and risky because it can change when Parliament does weigh in, making it impossible to plan with confidence,” Prybylski added.
