Bill C-661 (Historical)

Facilitating the Transfer of Family Farm or Fishing Corporations Act

An Act to amend the Income Tax Act (transfer of family farm or fishing corporation)

This enactment amends the Income Tax Act in order to provide that, in the case of the shares of the capital stock of a family farm or fishing corporation, siblings are deemed not to be operating at arm’s length and to be related.

Facilitating the Transfer of Family Farm or Fishing Corporations Act

[Francine Raynault, NDP, Joliette, QC]

moved that Bill C-661, An Act to amend the Income Tax Act (transfer of family farm or fishing corporation), be read the second time and referred to a committee.

Mr. Speaker, I am very pleased to speak today to my Bill C-661, the facilitating the transfer of family farm or fishing corporations act. I will start by explaining the objective of this bill, and then I will talk about some problems it addresses and I will give some broader context.

I strongly believe that this bill is a step in the right direction for our regions' economies, and I hope that I will have the support of the entire House to help our farmers and fishers. It will be up to my colleagues to decide what they think, but I believe they will agree with me that this bill offers a clear solution to a major problem people are currently faced with.

As everyone probably knows, I was a farmer for a number of years in Saint-Alexis-de-Montcalm in Lanaudière. I owned and managed a market garden and started a small canning factory so that I could distribute my products myself. The farm was not a big operation by any means, but it made a decent living for my family and me. The bill I am introducing today was inspired by that experience because I want to give farmers in my region and across the country all the flexibility they need to overcome the challenges they are facing.

Bill C-661 amends the Income Tax Act in order to provide that, in the case of the shares of the capital stock of a family farm or fishing corporation, siblings are deemed not to be operating at arm’s length and to be related.

This bill makes a tiny change to the Income Tax Act. However, given the current context and in light of the explanations I am about to provide, I am sure that everyone will understand how necessary this change is.

Currently, section 55 of the Income Tax Act is the only one that does not acknowledge that brothers and sisters do not operate at arm's length. This minor provision in a 3,000-page act is an anomaly; it is the only place where brothers and sisters are deemed to be operating at arm's length.

Once I explain the issue and put the problems caused by this anomaly into perspective, I am sure that the members will agree with me that this situation needs to be resolved. The provisions in subsection 55(2) were designed as anti-avoidance measures to prevent fraud. Without this section, it would be possible for a corporation to create another company to transfer a certain value, thereby reducing the value of the corporation at the time of the transaction. This is a fairly simple operation, but on a large scale, it can cause significant loss of revenue for the government for reasons that in most cases would amount to tax avoidance.

When it comes to brothers and sisters working side by side on a farm they own together, that is another story. The value of farmland has jumped so much in recent years that it would be virtually impossible to pay even just the taxes on the transaction value, if one of the partners had to quit the business. That is what is happening right now.

There are two ways to deal with this problem, but they are complicated and costly, if not impossible. The first way to get around the provisions of subsection 55(2) of the Income Tax Act is what I just explained: create a new company and transfer some of the assets of the business in order to save on taxes on the transaction. However, this solution is available only to people who are deemed not to be operating at arm's length, which is not the case for brothers and sisters at the moment.

The other method that is sometimes used involves costs that are prohibitive for all but the very largest companies. Tax experts hesitate to use it without first asking for a decision from the Canada Revenue Agency, which can cost between $10,000 and $20,000 in accounting fees, not to mention the time it takes, which can complicate the management of the company.

This approach can take a year, which creates uncertainty regarding the company's future, and the cost of the whole operation can be in the six-figure range. According to the Canadian Federation of Agriculture, this method cannot be used by companies worth less than $2 million. Right now in Canada, large corporations are buying up large tracts of land. As evidence of this, from 2010 to 2011, 5,400 farms with incomes between $100,000 and $250,000 had to shut down. Over the past decade, nearly 15,000 farms of that size have had to close. That is a lot.

At present, the market is speeding up this phenomenon. Between 2007 and 2012, more than 22,000 family farms were forced to cease operations. In 2012 alone, the net worth of the richest farms increased by $1 million, while the net worth of mid-sized farms, those that earn between $100,000 and $250,000, remained the same. This is still the trend today.

We wonder how family farms can survive in these conditions. That is why the bill I am introducing is so important. It provides a clear solution to the problems faced by farmers who co-own a farm with siblings. These entrepreneurs need greater flexibility, and I know we can help them out. This bill will benefit our region's economies and ensure the survival of family farms and a proven entrepreneurial spirit.

We cannot expect the trend to reverse itself. If we look at the figures, they are quite worrisome. In Quebec, land values have jumped by 600% over the last 23 years. That is a huge increase. These percentages may be appealing to financial corporations interested in land speculation. However, this uncontrolled increase in the market value of land, which is a priceless resource, poses a risk to the future of the industry.

In Quebec, the number of transactions has increased by 67% in the past year, while their value has increased by 84%. The key players in these transactions have no interest in agriculture. They include pension funds and private investment funds, which hope to turn an incredible profit through land speculation. In this context, it is not surprising that Saskatchewan recently passed legislation to prevent pension funds and investment funds from purchasing farmland.

If my colleagues think this is a drastic solution, they should consider that in this case, the market could not balance itself and that this was jeopardizing the future of agriculture in Canada's bread basket. In 2014, Saskatchewan was the province in which the overall land value increased the most—by 18.7%. I do not know who, here, has RRSPs, but it is rare for a Canadian family to be able to boast about earning 18.7% in the past year.

After Saskatchewan, Quebec saw the biggest increase in land value in 2014—15.7%— closely followed by Ontario at 12.4%. All of that was in a single year.

In this context, we need to promote family farms, because they will survive and will be able to sustain Canada's agricultural industry. A young person who wants to get involved in agriculture has virtually no chance of coming up with the money needed to buy land. Even the children of farmers have a hard time taking over the family business. In 2013, I did an agricultural tour of my region and this is a real problem.

The solution to this problem lies in a very small change proposed in Bill C-661, which would enable siblings who jointly own a family farm or fishing corporation to take up the torch.

This is more important than ever, since fewer than one in 10 Canadian farms are operated by an owner under 40 years old, which means that the average age is rather high. Many farm owners will have to think about who will take over in the coming years, and we must give them tools to ensure that this will be successful.

The change to the Income Tax Act that I am proposing today is minor, but the repercussions are significant and would incur no expense on the part of the government, although they could result in loss of revenue. Overall, I believe that our regions will be better off if they have strong agricultural businesses and a next generation ready to take over. This is the right thing to do for our economy.

The president of the Canadian Federation of Agriculture, Ron Bonnett, agrees with me on this. He said he was pleased to see Bill C-661 introduced in the House because it offers a clear solution to this problem by providing the flexibility that farmers need to reorganize their operations. He added that co-ownership by brothers and sisters will be quite common for intergenerational transfers that happen in the coming decades. The federation is eager to see this problem solved in the interest of farmers across Canada.

This bill will have a direct impact on many businesses, and it will allow for an intergenerational link to be maintained in cases where only one of the two partners in a business has a succeeding generation.

For children who want to devote themselves body and soul to the family business, this will allow them to reorganize over time without fearing for the survival of the business.

The NDP is working with farmers, of course, because we believe in the agriculture and agri-food sectors, which employ one in 10 Canadians. This is a major segment of our economy and an important part of our culture. What is more, as a former farmer myself, I want to assure farmers that the NDP is fighting hard to secure the future of family farms.

In closing, I hope that this bill can move on to committee stage and that it will lead to meaningful discussions on issues related to succession planning in Canada, because this is a very important issue.

I invite all my colleagues to join me in showing farmers that we heard their message and that their concerns will be heard in the House.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Mr. Speaker, I sincerely want to thank my colleague from Joliette for introducing this good bill, but also for her work on the Standing Committee on Agriculture and Agri-Food and her defence of farmers in Lanaudière and throughout Quebec.

This change is a step in the right direction for helping farmers. One in two farm transfers fails in Canada and one in eight jobs is provided through farming. This is therefore a very important sector to support. We are the only party that has a pan-Canadian food strategy.

Would the hon. member for Joliette like to comment on the support for her bill and tell us how much her bill will change things in the lives of farmers across the country?

With the average age of farmers going up, we have to think about retirement and the next generation of farmers. Can the hon. member elaborate on this issue and comment on the importance of passing this bill as soon as possible?

[Francine Raynault, NDP, Joliette, QC]

Mr. Speaker, I thank my colleague from Berthier—Maskinongé for her question.

First of all, in introducing this bill, we also want to ensure our food sovereignty. That is very important. Also, as my colleague said, the price of our farmland is increasing so much that people can no longer afford to buy a farm. Our young people can no longer even buy their parents' farm, and that is serious, because other companies will start buying up our land.

I do not want our farmers to become employees of large corporations, which is what is happening elsewhere in the world, and I am sure my colleagues do not want that either.

I thank my colleague for her question, and I hope everyone will vote in favour of this bill.

[Emmanuel Dubourg, Liberal, Bourassa, QC]

Mr. Speaker, I want to thank and congratulate the member for Joliette on taking the initiative to introduce this bill.

In her speech, she talked a lot about large corporations that own farms. I would like to know if she was able to estimate the tax effects of the measures she is proposing and how she was able to limit that to small and medium-sized businesses. I think her intention is to favour small and medium-sized businesses.

[Francine Raynault, NDP, Joliette, QC]

Mr. Speaker, I would like to thank my colleague for his question.

The government will not lose tax revenue when people want to sell their farm.

For example, let us say that my colleague from Berthier—Maskinongé and I own a farm. She becomes an MP and wants to leave the farm. However, I am unable to buy her share; even if I could, she would not have enough money to pay the tax on what I would pay her. This is a serious issue that is preventing us from ensuring the survival of family farms.

Family farms, small and medium-sized businesses, are the lifeblood of our regions and keep the economy going. It is important for our food sovereignty to have small and medium-sized farms. I know of family farms where three or four brothers and sisters make a living. We consider this to be a family farm because no one outside the family owns part of the business. It is very important that we save our family farms. I believe that it will take political will to ensure the survival of our farms.

[Mike Lake, Conservative, Parliamentary Secretary to the Minister of Industry]

Mr. Speaker, today let me once again reassure members opposite, including the hon. member for Joliette, that our government is always standing up for the interests of Canadian farmers and fishers, and others who own and operate businesses in Canada.

Our government has worked hard to foster an environment in which businesses can grow and contribute to Canada's long-term prosperity. To help small businesses grow and create jobs, this government has delivered substantial, ongoing tax relief to small businesses and their owners. Let me remind the member of a few.

On September 11, 2014, the government announced further action to create jobs, growth and long-term prosperity with the introduction of the small business job credit. This credit is expected to save small businesses more than $550 million over 2015 and 2016.

This measure builds on substantial support for small businesses, including reducing the small business tax rate to 11% as of 2008, and increasing the amount of annual income eligible for this lower rate from $300,000 to $400,000 in 2007, and to $500,000 in 2009.

We are reducing the general corporate income tax rate to 15% in 2012 from 22.12% in 2007. This benefits successful small businesses on their way to becoming big businesses when their income exceeds $500,000.

We are increasing the lifetime capital gains exemption on qualified small business shares to $750,000 from $500,000 in 2007. The government further increased the exemption to $800,000 for 2014, and indexed the limit to inflation, bringing it to $813,600 for 2015. The exemption is estimated to be delivering over $1 billion of federal tax relief annually to small business owners and owners of farm and fishing businesses.

However, more recently, economic action plan 2015 goes even further, introducing a new reduction in the small business tax rate. It also proposes to further increases the lifetime capital gains exemption to $1 million for qualified farm and fishing property disposed of on or after April 21, 2015.

With respect to the small business business tax rate, which was reduced to 11% in 2008, it generally applies to the first $500,000 per year of qualifying active business income. This preferential rate allows small businesses to retain more earning than can be used to reinvest and create jobs.

Almost 700,000 small businesses benefit annually from this lower rate, including farmers and fishers.

To further encourage small business growth, economic action plan 2015 proposes to further reduce the small business tax rate to 9% by 2019. It is estimated that this measure will reduce taxes for small businesses and their owners by $2.7 billion over the 2015-16 to 2019-20 period.

Take the example of a small business with $500,000 of taxable income. As a result of actions already taken by the government to reduce the small business tax rate and increase the amount of income eligible for that rate, the amount of federal corporate income tax paid by this small business would be 34% lower in 2015 than in 2006. When the proposed reduction in the small business tax rate takes full effect in 2019, the amount of federal corporate income tax paid by that small business would be 46% lower than in 2006.

In other words, for this business, our government's measures provide an annual tax reduction of up to $38,600 that can be reinvested in the business to fuel its growth.

Small businesses, many of them in rural Canada, are saving thousands of dollars in annual business taxes. That is money that can be reinvested in their business to help it grow and prosper. We recognize the important contribution rural communities make to our economy, and we are committed to helping them achieve their goals.

We are proud of our commitment to supporting Canada's farmers, who are the backbone of our country, which is why we have consistently recognized the value of farmers when it comes to job creation and opportunity. A strong rural Canada makes for a stronger economy overall.

Now let me turn the attention of the House to Bill C-661, a bill that proposes a relieving income tax amendment to expand the scope of an exception to an existing anti-avoidance rule. Currently an existing income tax rule generally prevents corporate shareholders from avoiding tax on the sale of their shares by receiving tax deductible intercorporate dividends that reduce an accrued capital gain before the share sale.

Bill C-661 proposes a relieving income tax amendment to expand the scope of an exception to that existing anti-avoidance rule. This exception is currently available for spouses and their children as they are presumed to have shared economic interests. In the farming and fishing context, tax deferred transfers of assets are generally permitted between spouses and parents can leave farming or fishing property to their children without triggering capital gains tax.

In contrast, siblings who are shareholders in the same business are considered to have separate economic interests. Therefore, they are not eligible for this exception for closely related persons. This is consistent with many tax rules which generally do not accommodate tax deferred transfers of assets between siblings.

Instead, like other taxpayers in business together, the existing rules already allow them to divide their corporate interests on a tax deferred basis as long as each of them receives their pro rata share of each type of property in the business being split up. This exception allows siblings to divide a farming or fishing business into two separate farming or fishing businesses that they can carry on separately.

Bill C-661 would allow siblings to benefit from the first exception as if they had shared economic interests. In effect, this would enable siblings to exit the farming or fishing business, while deferring capital gains tax. This would be a special tax concession not available to other shareholders in similar circumstances and inconsistent with the general scheme of the tax rules, which generally limit tax deferred asset transfers to spouses and, in some cases, children.

What makes this private member's bill all the stranger is that the same member is extremely opposed to income splitting. The member opposite does not believe that a married couple is a single economic unit. Yet now, the NDP is arguing that brothers and sisters or siblings are a single economic unit and should be allowed an exemption for this purpose. It would be interesting to hear the NDP explain this contradictory stance. How can it make a distinction between the two?

Bill C-661 would loosen the application of the anti-avoidance rule at a time when the government is trying to strengthen integrity of the tax system by closing loopholes that allow tax avoidance. The bill would provide a special tax benefit to a very small group of taxpayers in very specific circumstances.

Since 2006, our government has been working hard to promote the interests of our farmers and fishers. We also recognize that Canadians have the food choices they have thanks to the hard work of our farmers and fishers.

Through economic action plan 2015, Canadian farmers and fishers will be able to save more for their retirement through the increase in the lifetime capital gains exemption. Therefore, given all of the aforementioned consideration, we do not support the proposed bill and we encourage all members to vote against it.

[Emmanuel Dubourg, Liberal, Bourassa, QC]

Mr. Speaker, I am pleased to rise today to speak to Bill C-661, which was introduced by the member for Joliette. This bill would amend the Income Tax Act regarding the transfer of a family farm or fishing corporation.

I want to focus on the importance of family businesses, on how challenging it is to transfer a business, and on the economic implications of a flourishing agricultural sector, fishing sector or small business. Today, a family farm or fishing corporation, for example, is still the dream or reality of many Canadians. However, our society has changed, and although we benefit from and rely on the well-being of these industries every day, many of us are far removed from them. That is why I appreciate being able to consult my colleagues who come from these fascinating worlds every time an agricultural or fishing issue comes up. We are fortunate enough to have many of them in our caucus. They make an important contribution to the House and to the study of this bill in particular.

Agriculture and fishing have also changed, and we need to make sure that the legislation governing them keeps pace. As we discuss this bill, the main objective is still to ensure that the overall intent of Income Tax Act measures remains unchanged. In a law as long and complex as the Income Tax Act, it is easy to lose sight of the intention behind each measure. It can be easy to introduce inconsistencies. Let us keep that in mind.

Even though agriculture and fishing have changed so much, the family business remains the cornerstone of Canada's agri-food industry. Family farms are good employers. Canadian fishers are excellent contributors to their communities. Both represent our cultural wealth here and in the eyes of the world. My party was proud to promote them and represent their interests when we were in government. We continue to support them today.

The current context is particularly urgent. Estimates all show that most family farms and fishing corporations will change hands in the next 10 years. The same is true of other small businesses. We would like to make sure that they fall into the best hands as often as possible.

Those who have worked in the field, whether at the head of a small business or supporting one, will all agree: the first transfer of the business is always the biggest obstacle to its success. My colleagues will therefore understand why my party definitely wants to give farming and fishing businesses the best possible chances for survival every time they have to change hands. Given the extremely hard economic context, that is absolutely crucial.

I would like to share a few reasons why transferring from one family member to another, whether to a sister, brother or child, should be supported by law. First of all, there is no doubt that these areas—fishing and farming—require a very high level of expertise and familiarity. Family members often get a head start on developing these skills and this knowledge. Secondly, farming and fishing businesses are often integrated into the family's daily way of life. We can imagine why growing up on a farm or on the ocean would help a future business owner, in the case of a sister or brother, to successfully take over such a business.

It is also important to note that not all entrepreneurs have the chance to transfer their business easily and predictably to one of their children. Perhaps they do not have any children. Perhaps their children have moved to the city or moved away to study, or perhaps their children are simply not interested. There can be many reasons.

However, if a brother or sister is available to take the controls with a steady hand, then we should stay out of it. That type of transfer can suit everybody. Instead of rushing the transfer to a child just to take advantage of the tax rules, only to see the business crumble as a result of poor succession planning, everyone wins if a sister or brother buys the business and then possibly hires the next generation and perhaps hands down the business to them one day. If we encourage the survival of that business through the best means available, then the Canadian economy wins in the end.

Those are just some of the reasons why I believe that we must allow such a business to pass to a sister or a brother with the same tax benefits that apply to children. In many cases, the brothers and sisters, by generally having lived close to the business in question for longer, have the extra experience needed. The business may benefit from it, and the survival of the business many very well depend on it.

By supporting this bill we are simply trying to ensure that the Income Tax Act does not discourage the best qualified person in the family from taking over the business because of the tax implications. Such a distortion of this market would certainly be harmful to both these industries.

I am therefore pleased to support Bill C-661, and I encourage my colleagues to examine the bill with a view to the transfer of small and medium-sized businesses, particularly in farming and fishing, in a tough economic context. It is a matter of helping these people acquire these businesses because often, they do not have the means.

Let us do our part and support this bill for the good of the Canadian economy.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Mr. Speaker, I commend my New Democrat colleague from Joliette for introducing Bill C-661, An Act to amend the Income Tax Act (transfer of family farm or fishing corporation).

It is a step in the right direction to promote the transfer of a farm or fishing corporation to a family member. This bill will help address some of the problems facing family farms and the next generation of farmers. This bill is common sense, which is why I will vote in favour of it and why I will try to ensure that it is passed unanimously.

In my speech today, I will try to show how this bill is in line with the ideas the NDP has been proposing for four years and how it is essential to keeping our agricultural sector healthy.

First, Bill C-661 is consistent with the work my New Democrat colleagues and I have accomplished in the agricultural sector. Compared to the Conservatives, we truly value farmers and family farms, and this bill is yet another example of that. Since the Conservative government came to power, it has shown that it favours big corporations and big producers at the expense of small ones. The best example is omnibus Bill C-18. Although it was necessary to make amendments and updates, the government did not listen to small farmers. Instead it chose to favour the big plant breeders. As a result, my colleagues and I were forced to present a number of petitions signed by hundreds and even thousands of farmers and Canadians who were critical of many aspects of Bill C-18.

W raised some problems In committee and we proposed solutions to those problems by way of amendments to this omnibus bill, but as usual, the Conservatives outright rejected our amendments.

Historically, the NDP has been the only party that has a proven commitment to helping family farms and small farmers, since we understand the vital role they play in the economy, in our regions and in our society.

The bill introduced by the member for Joliette is also in keeping with the pan-Canadian food strategy proposed by the NDP. We are the only Canadian party to have proposed a plan that indirectly strengthens regional economies by encouraging people to buy local.

At present, we are lagging behind the other OECD and G8 countries. Great Britain and Australia have already successfully adopted this type of strategy.

The NDP believes that a comprehensive food policy would stimulate the local economy and stop the increase in food insecurity in Canada. It would also address farm accessibility issues.

Our “Everybody Eats” policy would have been a good way of helping the next generation of farmers, supporting farm succession planning and reviewing the fiscal framework for farming businesses to be successfully managed. Support for the agricultural sector is a societal choice that the NDP is prepared to make, unlike the current government.

As we have seen, the government has yet to announce the compensation it will offer to dairy producers for losses incurred as a result of the Canada-European Union Comprehensive Economic and Trade Agreement, despite a number of promises, including the unanimous adoption of my motion requiring:

That...the government [respect] its promise to dairy and cheese producers of Quebec and Canada who will be affected by the Comprehensive Economic and Trade Agreement between Canada and the European Union, by: (a) revealing details without delay related to the compensation that will be paid; (b) providing for an implementation period for the agreement that is as long as possible; (c) putting an end to the circumvention of tariff quotas and the misclassification of products at the border; (d) maintaining high quality standards by imposing the same production and processing requirements on imported products; and (e) committing to provide support for commercialization.

Unfortunately, there is still nothing on the table, except for more worries about supply management being sacrificed in future trade agreements.

We see that the agriculture sector is only of use to the government for balancing its budget and electioneering.

Let us not forget the fiasco resulting from the Conservatives' changes to the rules for temporary foreign workers in the agricultural sector. That sector was already struggling with a labour shortage when the government further complicated things. Its bad management cost Quebec farmers nearly $54 million.

I encourage all members to get on board and vote in favour of Bill C-661 because it is critical to maintaining our agricultural system in the short, medium and long terms. Why? Because it acknowledges the realities of the agricultural sector.

For many years now, the agricultural sector has been facing a number of problems related to the next generation of farmers and transferring farms. This has given rise to a new phenomenon: the dismantling of farms.

Those problems include a reduction in the number of farms, growing indebtedness and the ballooning cost of farm assets, which is sometimes as much as $5,000 per acre. This increase in the value of agricultural businesses, which is inflated by land speculation, boosts the value of farmers' assets but does not improve their liquidity, which is essential to transferring farms.

In Quebec, over the past 23 years, the value of land has jumped by 600%. Over 8,000 family farms have disappeared over the past 10 years. The number of farms in Quebec is decreasing every year, and all across Canada, the next generation cannot afford market prices.

At the Standing Committee on Agriculture and Agri-Food, on February 26, 2015, Pierre-Luc Lacoste said, and I quote:

...farm transfers are...complicated....Transfers are extremely expensive and lead to a loss....Mechanisms should be implemented to help farmers...

That is exactly what the bill introduced by the member for Joliette does. It would allow farmers to save time, money and worry by reducing the bureaucratic and fiscal complexities of transferring a farm to a brother or sister. Furthermore, it would facilitate joint ownership of farms by brothers and sisters. At this time, 50% of farm transfers fail. That is an alarming statistic.

If we want to prevent more and more dismantling and a decline in our agricultural production, it is our duty as parliamentarians to make sure that this bill passes as quickly as possible. It appears to be a step in the right direction, because it solves some of the problems caused by the current reality in the agricultural sector.

To the NDP, the choice is clear: we must support family farms and the next generation of farmers as best we can. That is how we will ensure the vitality of the farming sector and our regions.

Farmers know that they can count on the NDP to stand up for them. We believe in an economy of entrepreneurial farmers, and the best way to achieve that is to help family farms by giving them more flexibility, less paperwork and substantial savings on accounting costs.

Quebeckers who are concerned about all the land that is being bought up can count on us to provide clear solutions to help family farms prosper and ensure that they can be transferred from one generation to the next.

I want to thank the hon. member from Joliette once again for her bill and her work. I hope that all the parties and all the members of the House will study this bill and vote in favour of it soon.

[Earl Dreeshen, Conservative, Red Deer, AB]

Mr. Speaker, certainly listening to some of the debate, I hear major concerns with regard to some of the issues as far as agriculture is concerned. Of course, young farmers have great opportunities and they are using all of the tools we have to make sure they have these opportunities when it comes to farm succession planning.

Our government is very much aware that a strong and vibrant farming and fishing sector benefits not only our rural communities but also the country as a whole. Our agricultural sector is a recognized leader in the development of new products using Canada's field crops, while our country's fish and seafood are among the largest food sectors exported by Canada.

I will begin by focusing on how our government is proud to partner with farmers in building a prosperous agricultural sector in Canada.

As members well know, the agriculture and agri-food sector in Canada accounts for over $100 billion in economic activity and provides employment to more than 2.1 million people. Throughout Canada's history, it has played an integral role in our country's economy. That is why our government has continued to do what is necessary to support farmers and processors.

As just one example, in April 2013, our government introduced the growing forward 2 policy framework, which is a $3 billion investment by federal, provincial, and territorial governments and the foundation for our government's agricultural programs and services, focusing on innovation, competitiveness, and market development.

At the same time, unlike the opposition, we know that our prosperity is strongly linked to reaching out beyond our borders and forging new trade agreements. Increasing our exports to the largest, most dynamic, and fastest-growing markets in the world is a key part of the economic action plan. We have acted to break down barriers that were preventing Canadian businesses from becoming more competitive on the world stage.

Since 2006, the government has concluded free trade agreements with 38 countries, bringing Canada's total to 43. Last September, the Government of Canada and the European Union released the complex text of the historic Canada-European Union Comprehensive Economic and Trade Agreement. The agreement opens the way to vastly increased trade, job creation, and greater prosperity, providing preferred access to the world's largest and most lucrative market with more than 500 million consumers in 28 countries.

On January 1, 2015, the landmark Canada-Korea Free Trade Agreement entered into force, giving Canadian businesses a gateway to the dynamic Asian region. Further, in October 2014, we confirmed a foreign investment promotion and protection agreement with China so that Canadian companies investing there are treated fairly and benefit from a more predictable, secure, and transparent investment climate.

This brings to 28 the number of investment agreements Canada has with countries around the world. Taken together, these agreements afford Canada preferential access to more than half of the world market.

With new trade agreements completed, and more soon to be in place, economic action plan 2015 proposes $152 million in trade promotion investments over the next five years to help Canadian businesses fully capitalize on global opportunities. That money would be used to create a new export market development program to share the costs as small businesses pursue new export opportunities around the world, as well as for new resources for the Canadian Trade Commissioner Service to support Canadian firms with on-the-ground intelligence and practical advice on foreign markets, to help them achieve their goals.

We are also creating a new internal trade promotion office to support federal, provincial, and territorial negotiations to strengthen the economy within Canada's borders, by comprehensively renewing the Agreement on Internal Trade.

In addition, the expansion of agriculture and agri-food sector marketing and promotion activities will continue to secure Canada's position as one of the largest exporters of agricultural and agri-food products globally.

I can assure members that we have a government that is working to set the right conditions for rural communities, farmers, and Canada's fishery to compete in Canada and around the world.

In doing so, we are building one of our nation's strengths. In 2014, Canada exported $4.9 billion of fish and seafood products, an increase of $530 million from 2013. Approximately 85% of all fish landed by Canadian harvesters is exported to foreign markets.

As members can see, our government is standing up for the interests of Canadian farmers, fishers and others who own and operate businesses in Canada. We have continued to act to ensure that they can count on their investments of a lifetime even when their working life has concluded.

In order to increase the potential rewards of investing in small business, farming and fishing, economic action plan 2013 increased the lifetime capital gains exemption, the LCGE, from $750,000 to $800,000 in 2014. To ensure that the real value of this exemption is not eroded over time, we indexed the $800,000 LCGE limit to inflation. The first indexation adjustment occurred this year, raising the limit to $813,600 for 2015. Economic action plan 2015 proposes to further increase the exemption to $1 million for qualified farming or fishing property disposed of on or after April 21, 2015.

In addition to increasing the exemption, last year the government simplified the tax rules relating to the lifetime capital gains exemption and the intergenerational rollover for taxpayers who carried on farming or fishing businesses in combination. To accomplish this, the government passed legislation to generally treat a taxpayer's combined farming and fishing business the same as a separate farming or fishing business conducted by the same taxpayer. This will ensure consistent treatment for taxpayers who conduct farming and fishing activities in different legal forms.

Similarly, in 2009 the government extended the rule that helped farmers who disposed of breeding livestock due to drought conditions existing in specific regions in a given year to farmers affected by excess moisture conditions. This rule allows farmers to exclude up to 90% of the net sale proceeds from their taxable income until the year following the sale or a later year if the conditions persist. Economic action plan 2014 extended this tax deferral also to bees and to all types of horses that were over 12 months of age that were kept for breeding, effective for the 2014 and subsequent taxation years.

Our government has made it our mission to put farmers and fishers first. We firmly believe that Canadian farmers and fishers should be strong and profitable and able to capitalize on market opportunities. That commitment extended to economic action plan 2015, which is why our government cannot support today's bill from the hon. member for Joliette.

Bill C-661 proposes a relieving incoming tax amendment to expand the scope of an exemption to an existing anti-avoidance rule. This exemption is available for spouses and their children as they are presumed to have a shared economic interest. In the farming and fishing context, tax-deferred transfers of assets are generally permitted between spouses, and parents can leave farming or fishing properties to their children without triggering capital gains tax. In contrast, siblings who are shareholders in the same business are considered to have separate economic interests and therefore they are not eligible for the exemption for closely related persons. This is consistent with many tax rules, which generally do not accommodate tax-deferred transfers of assets between siblings.

I am somewhat shocked that the NDP member would propose this considering the New Democrats' stance on income splitting. The hon. members opposite do not believe that a married couple is a single economic unit and are highly opposed to income splitting. Yet, the individual opposite argues that siblings are an economic unit and should be allowed an exemption for this purpose.

I wonder how NDP members can explain how they can remain consistent if they now believe that siblings are a single economic unit?

So that there is no confusion, let me be clear that if siblings separate their farming or fishing business in equal amounts, or their pro rata share of each type of property, they will continue to be able to take advantage of this exemption.

Given these examples, and many more, we cannot support the bill, and we encourage all members to vote against it.

[The Acting Speaker, Conservative, Bruce Stanton]

The hon. member for LaSalle—Émard has four minutes left in the time provided for private members' business.

The hon. member for LaSalle—Émard.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I must admit that it will be very difficult for me to express the passion I share with my colleague, the member for Joliette, for agriculture and especially for the future of agriculture in just four minutes.

I am an agronomist by training, and I grew up in a rural area. I went back to school in 2004 to get a degree in agriculture and the environment. During my studies and over the years, it became clear to me that farmers across Canada, and in Quebec especially, are people who work very hard and who are passionate about putting food on our tables.

The agricultural industry is currently in crisis, which is one of the reasons why I went back to school to study in this field. A number of businesses are having a hard time with succession planning, and we are seeing an increasing number of farms that do not have anyone to take over.

Bill C-661, An Act to amend the Income Tax Act (transfer of family farm or fishing corporation), introduced by my colleague, the member for Joliette, is an attempt to address the serious succession problem and use Canadian tax laws to make it easier to transfer a farm to a second generation. The previous speakers on the official opposition side also mentioned that there is currently a lot of speculation in farmland across Canada. Saskatchewan recently took measures because its farmland is sought after by non-agricultural businesses that simply want to manage and speculate in this farmland. We have to think about what kind of agriculture we want in Canada.

Not only is agriculture part of our economy, but it is also part of our history and heritage. We have to decide how we want to develop agriculture and what we can do to attract more people to this sector and this industry. I am talking about front-line agriculture. We know that the agri-food sector employs many Canadians, that it is expanding and that it makes a huge contribution to our economy. However, front-line agriculture is beginning to lack vitality and people to take over farms. Many farmers are close to retiring, if they have not yet reached the average age of retirement in Canada.

I believe that my colleague, the member for Joliette, has introduced a very important bill about how the Government of Canada, through tax measures, could facilitate the transfer of farms, ensure agricultural succession and ensure that we have healthy agriculture in a healthy environment that is in keeping with our vision of what it should be, with passionate farmers who will produce food with confidence and guarantee that Canada has home-grown, healthy food.

I believe that the House could hear much more about agriculture and its future, which is cause for concern. I hope that we will have a long debate about this matter so that we can identify concrete solutions and offer our farmers a promising future.

[The Acting Speaker, Conservative, Bruce Stanton]

The hon. member for LaSalle—Émard will have five minutes to complete her remarks when the House resumes debate on this motion.

The time provided for the consideration of private members' business has now expired, and the order is dropped to the bottom of the order of precedence on the order paper.

The House resumed from May 12 consideration of the motion that Bill C-661, An Act to amend the Income Tax Act (transfer of family farm or fishing corporation), be read the second time and referred to a committee.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Mr. Speaker, I am truly honoured to rise and speak on this piece of legislation that is before us in the form of a private member's bill.

I want to thank my colleague from Northumberland—Quinte West for his camaraderie and friendship. He is a kindred spirit to me. We are both former law enforcement officers, although he has much more experience than I do. We are both hunters and fishermen who love the great outdoors. I can only commend him for the excellent work he has done on the hunting and angling caucus and in passing a bill in this place that recognizes those historical traditions in our country. I want to thank him deeply for his service, and I wish him all the best, good health, and a long and healthy retirement catching all the fish and hunting all the game that is out there and available for him over the years to come.

I thank this House for the opportunity to speak to Bill C-661 and to discuss how our low-tax plan is providing all Canadians with tax relief and to talk about our strong record of helping farming and fishing businesses succeed.

As the member opposite may know, our government holds an impressive record on tax relief. In fact, since 2006, the government has introduced over 180 tax relief measures, and the overall federal tax burden is now at its lowest level in more than 50 years. I have been proud to stand in this place over the last almost nine and a half years and vote in favour of all of these tax reductions.

Canadian families and individuals have benefited from significant tax reductions that have given them the flexibility to make the choices that are right for them and their families. Canadians at all income levels are benefiting from the tax relief introduced by the government, with low and middle-income Canadians receiving proportionally the most relief.

Our government knows a thing or two about tax relief. In fact, many of these farming or fishing businesses the member is raising awareness of through the proposed legislation are in fact small businesses. Our government believes that small businesses should spend their time growing their businesses and creating jobs, not choking on stifling high taxes. Cutting taxes and reducing red tape is the way to create prosperity for these business people.

We cut the small business tax rate to 11%. I actually know that number, unlike the leader of the NDP. We also increased the amount of annual income eligible for this lower rate from $300,000 to $400,000 in 2007 and to $500,000 in 2009, creating more wealth for job creators.

We cut the general corporate income tax rate to 15% in 2012, which is the number the leader from the NDP does not seem to know, from 22.12% in 2007. This benefits successful small businesses on their way to becoming big businesses, when their income exceeds $500,000.

We also reduced small businesses' El premiums by introducing the small business job credit. This credit is expected to save small businesses more than $550 million over 2015 and 2016.

To encourage further small business growth, economic action plan 2015 proposes to reduce the small business tax rate to 9% by 2019, which in effect will be the largest tax rate cut for small businesses in more than 25 years.

Let me present a few numbers to illustrate the impact of the tax reductions introduced since 2006. For example, take a small business with taxable income of $500,000. The amount of federal tax paid by that business in 2019 will be 46% lower than it would have been in 2006. This represents an annual tax reduction of up to $38,600 for that business. That is enough to create a job.

These changes, among others, will help enhance the ability of small businesses across Canada to retain capital, grow their businesses, and create jobs.

If the hon. member who introduced the bill is looking for an example of a tax relief measure that benefits a number of farming or fishing business owners, she need look no further than the lifetime capital gains exemption, which this government has enhanced.

The lifetime capital gains exemption for farming or fishing property provides an incentive to invest in the development of productive farming or fishing businesses and helps farming or fishing business owners accumulate capital for retirement. This is already a measure that provides real value to these businesses, but in economic action plan 2015, we are proposing to make it even better. Economic action plan 2015 proposes to increase the lifetime capital gains exemption applicable to capital gains realized on the disposition of qualified farm or fishing property on or after April 21, 2015 to a whopping $1 million.

It is estimated that this measure will reduce capital gains taxes on owners of farming and fishing businesses by about $50 million over the 2015-16 to 2019-20 period. This is money that farmers and fishermen have invested in their businesses. They have grown their businesses. They are now able, when they dispose of these assets, to keep that hard-earned money in their pockets, money that they have invested over the years to grow their businesses. Clearly this measure would provide much more significant tax relief than Bill C-661 from my colleague across the way ever could

Before I wrap up, I want to touch on the measures our government is taking to help Canadian farmers. Through the Department of Agri-Food and Agriculture and the Department of Fisheries and Oceans, our government runs several programs to help farming and fishing businesses succeed.

Under growing forward 2, which is a $3 billion dollar investment by federal, provincial and territorial governments and the foundation for government agricultural programs and services, farmers have access to a suite of business risk management programs, including agri-invest, agri-stability, agri-insurance, and agri-recovery, which help farmers in managing risk due to severe market volatility and disaster situations. These initiatives also help the industry in its efforts to research, develop and implement new agricultural risk management tools.

In addition, the federal agri-marketing program under growing forward 2 helps farmers and food processors compete in markets at home and around the world. It supports the agriculture industry by creating and maintaining access to markets and taking advantage of market opportunities. Economic action plan 2015 has provided $12 million over two years, starting in 2016-17, to expand the agri-marketing program.

I will go back to the bill. What is so confusing about this one is the irony of the NDP's position on this. We know that Bill C-661 would allow siblings to benefit from the exception to the existing anti-avoidance rule, which is presently only available for spouses and children. This would effectively enable siblings to exit the farming or fishing business, while deferring capital gains tax. This is no small matter. This would be a special tax concession not available to others in similar circumstances, and it is inconsistent with the general scheme of the tax rules, which for the most part limits tax deferred asset transfers to spouses and in some cases their children.

I recall another debate that the House had recently, and that is in regard to the family tax cut. Our Government is proposing that a married couple is a single economic unit, that two spouses should be considered an economic unit. The NDP members have rejected that definition and have been opposed to this tax fairness from the very beginning. However, now they are in fact proposing to expand the definition of a single economic unit to a brother and sister or any combination of siblings. That is complete and utter hypocrisy.

Therefore, the New Democrats do not think spouses are an economic unit, but they do think that siblings somehow are. It simply does not make sense. Either they support tax fairness or they do not. Clearly this hypocritical bill put forward by the NDP suggests that it does not truly understand tax fairness either way.

In closing, allow me to reiterate that Bill C-661 would offer limited benefits for a handful of people, and would loosen the application of the anti-avoidance rule, and as such, I urge my colleagues to oppose it.

Going forward, our Government will continue to work diligently toward making life more affordable for hard-working Canadians and helping Canadian farmers and fishermen who are the backbone of our country. We will continue to build on our impressive tax relief record with measures that make a difference on the bottom lines of Canadians, and implementing measures that will help create jobs, growth and long-term prosperity for all Canadians.

In the time I have left, I just want to thank you, Mr. Speaker, and everybody who occupies the chair and all of the staff at the table as well as everybody who does wonderful work in this place.

I have been a member of Parliament for almost 10 years. I tell the pages that there are 308 MPs during a four-year term and there are only 160 pages. It is harder to become a page in the House of Commons than it is to become a member of Parliament. I thank them for the diligent work they do.

I thank all of the staff and all the people who support us. I especially thank Constable Franchi for the excellent work he did on October 22. He has become a good friend of mine. He came into the room and calmed us all down on the day we were all deeply affected. I want to thank all of the House of Commons and Senate security guards, the RCMP officers who are here and keep us safe, not only on Parliament Hill, but all across the country. They do an absolutely excellent job. I thank all of those who serve here to empower me to do the best I can for my constituents in Wetaskiwin.

This is the end of the constituency of Wetaskiwin. I will be the last member of Parliament for the federal riding of Wetaskiwin, which because of the growth in Alberta is going to see new seats. I just want to say to everyone who volunteered, encouraged me, supported me, or voted for me that I could not have been more proud to be their representative for these last nine and a half years, and I look forward to running in the new riding of Red Deer—Lacombe.

From the bottom of my heart, I just want to thank everybody in the constituency of Wetaskiwin for allowing me the privilege and honour of being their member of Parliament.

[The Acting Speaker, Conservative, Barry Devolin]

The Chair regrets he was not paying attention to the hon. member from Wetaskiwin as closely as he ought to have been. There are a lot of farewells taking place in this place today.

At this point, we are going to resume debate. The hon. member for Sydney—Victoria.