Tax change fallout continues to vex federal government

In the face of mounting pressure from farmers and small business owners, federal Agriculture Minister Lawrence MacAulay and Finance Minister Bill Morneau both pledged last week to listen to concerns about proposed tax changes.

The House of Commons resumed sitting Sept. 18 after a summer break that included the roll-out of a package of tax reforms that could affect farm financial management, particularly intergenerational transfer.

In question period Sept. 19, Conservative agriculture critic Luc Berthold (Megantic-L’Erable) asked if the consultation period could be extended past the Oct. 2 deadline, given that farmers are harvesting.

He didn’t get an answer.

“Does the minister agree with his prime minister, who has said that farmers, ranchers and producers are wealthy, privileged people who are using their businesses to pay less taxes?” Berthold asked.

MacAulay first defended the Liberal government proposal but later told media he would ensure family farms aren’t hurt by the changes.

He said that the federal government is working on improving grain transportation and has invested $100 million in science research.

“Mr. Speaker, we inherited the tax system from the Harper government, which encouraged wealthy Canadians to incorporate to make sure they paid less taxes than the middle class,” he said. “We think that is unfair.”

Later, the minister told iPolitics.ca that an existing provision in tax regulations that allows easier farm transfers within families will stay in place, if he has anything to say about it.

“We want to make sure we are committed to supporting the young farmers by maintaining the tax exemption on intergenerational (transfer),” he told the media outlet.

Several opposition MPs used question period to raise examples of farmers in their ridings who could be affected by the tax changes.

Morneau acknowledged the concern, particularly after Conservative MPs tweeted his office phone number and encouraged people to call.

He said Sept. 21 that everyone wants a fair tax system and that is what the government is working toward.

“In the case of farmers, we know we want to listen to make sure our tax proposals, which are important to make the system fair, do not have unintended consequences,” he said in response to a question from John Barlow (Foothills).

“That is why we are listening to farmers across this country. We know how important they are. We are going to listen to them and we are going to get this right.”

Meanwhile, at the standing agriculture committee, a Conservative motion to examine the tax changes rather than study a national food policy was defeated by the Liberal majority.

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