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The Agricultural Producers Association of Saskatchewan (APAS) wants the federal government to withdraw its proposed changes to Canada’s capital gains tax.
Since June, the Canada Revenue Agency has been collecting on an inclusion rate that went from 50 per cent to 67 per cent. The higher rate also applies to individuals with capital gains of more than $250,000.
Read more:
- Capital gains tax change could hurt Sask. doctors and farmers
- CRA to continue with capital tax changes despite prorogation
- Prorogation upends capital gains proposal but CRA yet to offer guidance
On Tuesday, APAS president Bill Prybylski said the tax hike should be withdrawn until farmers can be properly consulted about its implications.
“The changes were kind of sprung upon us without much notice and without any consultation,” Prybylski said
He added that the change will be “quite severe for anybody who’s in that position where they’re wanting to sell their land or transition to next generation.”
Prybylski said the higher tax brings about a lot of uncertainty for producers.
“Any farmers that had succession planning in place and all of a sudden looks at changes to the capital gains taxes, their plans almost become null and void,” he said.
Although the changes were effective as of June, they have still not been passed in the House of Commons. Debates on the matter are now on hold due to Prime Minister Justin Trudeau’s decision to prorogue parliament.
Prybylski said the changes might not affect those who are expecting to farm for the foreseeable future but it will have a huge effect on those who are planning on retiring or selling their farms.
“Most producers will bank on the sale of their assets as their retirement fund,” Prybylski explained.
“If we don’t know what the rules are in terms of how much taxes they’re going to have to be forced to pay when they do eventually sell that land, it’s really hard to plan for that future.”
Prybylski said that uncertainty will likely cause some producers to delay their retirement.
Threat of another rail strike ‘very troublesome’
Unifor, the union representing workers at Canadian Pacific Kansas City, said on Tuesday that 99 per cent of its members voted in favour of strike action.
“We should be getting used to it,” Prybylski joked, noting the number of rail strikes in recent years.
“It’s very troublesome, because if there is a rail strike and grain movement is affected, that just puts more pressure on producers financially, not knowing how long the strike might last,” he said.
“Is it going to affect grain movement? If it does, how does that affect our cashflow? We as producers don’t get paid until we are able to sell our grain.”