Liberals block tax fairness bill even after it has passed

In the Okanagan, Similkameen and Nicola valleys, we have many small family-run farms and smallbusiness operations.

When it comes time for retirement, if a business owner decides to sell to another member of the family to pass the business along to the next generation, the difference between the sale price and the original purchase price is considered a dividend.

In the event the same family farm or small business is sold to a stranger, the difference between the sale price and the original purchase price is considered a capital gain.

Both dividends and capital gains are taxable.

The difference is that generally capital gains are taxed at lower rate than dividends.

So, if you sell your family farm or related small business to a family member, you are, in effect, penalized for doing so, compared to selling to a non-family member who would pay lower taxes on the sale.

Conservative MP Larry Maguire from Brandon-Souris did not feel this tax approach was fair and tabled a Private Members Bill C-208 “An Act to amend the Income Tax Act (transfer of small business or family farm or fishing corporation).”

Bill C-208 proposes to amend the Income Tax Act so that the same tax rate would apply when selling an operation to a family member as would apply when selling to a third party.

Unfortunately, Prime Minister Justin Trudeau, Finance Minister Chrystia Freeland, the Liberal cabinet and majority of the Liberal caucus voted against this bill.

Fortunately, all members of the Conservative, the NDP, Bloc Québécois, Green MPs and some backbench Liberals voted for this bill allowing it to pass third reading by a vote of 199-128.

Bill C-208 received Royal Assent and was passed into law on June 29.

Despite this bill now becoming law, the government is refusing to immediately implement the bill and has indicated that: “The government proposes to introduce legislation to clarify that these amendments would apply at the beginning of the next taxation year, starting on Jan. 1, 2022.”

The concern here is that the legislation has already been passed into law, in spite of the fact that the current Liberal government doesn’t support it.

This action undermines and disrespects the will of the people though an elected Parliament.

It is my view the prime minister believes by delaying this bill until after a federal election, if the Liberal government receives a majority, they can overturn it.

I believe this bill, that is now law, should be immediately implemented.

If a future majority government seeks to overturn these amendments to the Income Tax Act, they could attempt to do so using the democratic process.

To use the bureaucracy to delay and basically block this bill is an arrogant affront to democracy.