Farmers remain cool on proposed tax changes
WALTON He rode a tractor, plowed a row, surprised Queen of the Furrow contestants onstage, then got out of town.
Prime Minister Justin Trudeau, his wife, Sophie Gregoire Trudeau, and their children, Ella-Grace, Hadrien and Xavier, got a warm welcome during a whirlwind stop at the International Plowing Match in Walton Friday morning.
Such a friendly welcome, in fact, you’d never guess his government has galvanized farmers with a proposed tax overhaul some say hurts small business.
Look past the photo ops and you’ll find farmers with serious concerns about what the Trudeau government proposed in mid-July.
“It seems insincere,” said retired dairy farmer John Wilkinson, irritated Trudeau didn’t stop to talk to real farmers along the way. “I feel that all he does is travel the world and have a good time.”
The battery of changes — which has drawn fire from the small business community, farmers, tax planners, doctors and lawyers — includes restricting business owners’ ability to sprinkle their income to family members in lower tax brackets.
Another change limits business owners’ freedom to change regular corporate income into capital gains, which are typically taxed at a lower rate.
But the biggest concern for farmers seems to be succession planning and barriers the new rules will create for passing the family business on to another generation.
Bayfield-area chicken farmer and cash cropper Tim Wubs, 35, will take over his family’s farm in the next few years. He’s anxiously watching Ottawa’s next move.
“We’re waiting on more details,” he said. “This tax change could really hurt.”
But it’s not just farmers. Other businesses connected to agriculture are wary of the corporate tax overhaul, too. “It’s going to be hard,” said Allan Scott, general manager of the Lucknow District Co-Operative.
The farm supply business has a lot of different partners, he said, it’s fluid and passing power and ownership along under the new rules won’t be as straightforward.
“We’ve been talking about it with our accountant (and) he said it’s going to have some major implications.”
The Ontario Federation of Agriculture (OFA) and Canadian Federation of Agriculture both have spoken out about the proposed tax changes. Since about 25 per cent of farm businesses in Ontario and across Canada are incorporated, the OFA said the changes could hike accounting and succession planning fees and limit options for farmers who want to retire and pass their businesses on to their children.
The Canadian Federation of Agriculture said it’s unfair that Ottawa scheduled its 75-day public consultation on the tax changes, which ends Oct. 2, during harvest season, when farmers are working long days and might not have time to take part.
Finance Minister Bill Morneau is standing by the controversial plan, saying the reforms are needed to level the playing field and promote fairness and equity.