Bill C-275 (Historical)

An Act to amend the Income Tax Act (business transfer)

This enactment amends the Income Tax Act in order to exclude, under certain conditions, the transfer of qualified small business corporation shares by a taxpayer to the taxpayer’s child or grandchild who is 18 years of age or older from the anti-avoidance rule of section 84.‍1.

Income Tax Act

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Speaker, it is an honour and a privilege for me to speak to this bill at third reading stage.

At its annual general meeting, the Syndicat de la relève agricole d'Abitibi-Témiscamingue called on MPs from the Abitibi-Témiscamingue area to support Bill C-208 and to actively contribute to its passage before the next election. That is my role today in bringing debate to a close at third reading.

The resolution of the Syndicat de la relève agricole d'Abitibi-Témiscamingue speaks of fairness when transferring agricultural farms. At present, when an individual sells their shares in their small business or family farm corporation to a family member, the difference between the sale price and the initial purchase price is treated as a dividend. However, if the business or corporation is sold to someone other than a family member, this transaction is treated as a capital gain.

Bill C-208 would give small businesses, farming families and fishing families the same tax treatment whether they sell their business to a family member or a third party. The economic landscape of our region is made up of a growing number of incorporated farms and family fishing corporations, which is why the Syndicat de la relève agricole d'Abitibi-Témiscamingue adopted this resolution, and I am here to honour it.

I had the opportunity to take part in the debate on this bill in November 2020, and I remember that my presentation centred on the fact that, incredible as it may seem, a business owner is currently better off selling their business to outside shareholders than to members of their own family. As I said, under the existing legislation, the transfer of a business to a family member is treated as a dividend and not as a capital gain, unlike a sale to a third party. As a result, owners are not entitled to the lifetime capital gains exemption if they decide to sell the business to their children.

The Bloc Québécois is in favour of Bill C-208. For several years now, my party has been calling for measures to encourage and facilitate the transfer of family businesses, especially in the agriculture and fisheries sectors. I would also like to acknowledge the work of my colleague, the member for Pierre-Boucher—Les Patriotes—Verchères, who had the opportunity to speak before me and who introduced Bill C-275 back in the day.

The Bloc Québécois has been calling for measures to encourage and facilitate the transfer of family businesses for over 15 years. For Quebeckers, the Bloc Québécois and myself, business succession is important. It is also important for our SMEs in general, but especially for family farms in the regions, like the Abitibi-Témiscamingue region. Perhaps we will soon have the opportunity to speak of Bill C-208 and its consequences in the past tense, a thought that fills me with excitement.

The existing legislation makes no sense at all. What is prompting the Liberal Party to vote against Bill C-208? They are raising the possibility of tax abuse and tax fraud, but we know that the Parliamentary Budget Officer questioned the amount of money that the Liberal government estimated would be lost, calculating that it would be tens or hundreds of millions instead of billions of dollars. Speaking of losses, I still do not understand why the government is not cracking down on tax havens.

I would like to share the comments of a farmer from my riding, a friend of mine named Simon Leblond, who was the president of the Fédération de la relève agricole du Québec when I was working for the union. With regard to the transfer of family farms, he said that it is important to maintain a large enough pool of farmers to maintain services for farms and, more generally, to ensure the vitality of the industry, make it known to those outside the world of agriculture, and ensure interest.

Farmers face major challenges, and I think it is important to point that out. Some of the challenges faced by farmers in Abitibi-Témiscamingue and everywhere else include land grabbing, farmland financialization, the whole issue of income security, vet services for farm animals, crop insurance and agricultural drainage. These are major challenges, and improving access to land and quality of life for Quebec's young farmers is one way to ensure a future in agriculture for Quebec's youth.

The more people we have who are willing to take over farms, the more services we will be able to provide. It is a cycle, but unfortunately that cycle has been broken. I hope that we can get that cycle going again and that we will see more and more young people taking over farms. Land prices, quota prices and new forms of agricultural production are leading to higher costs every year, and the red tape is becoming increasingly cumbersome, making it harder and harder for farmers to access land and operate their business. As politicians, we have a responsibility in that regard. I repeat: It is not right that a business owner is better off selling the business to a third party than to their own family members.

The Government of Quebec included measures in its 2016 budget to facilitate the transfer of family businesses in the primary and manufacturing sectors. A change to Quebec's Taxation Act relaxed the rule that prohibited the seller from using the capital gains tax exemption. Quebec has addressed this issue, while the federal government still lags behind, or at least it was lagging until now. I remind members that the Parliamentary Budget Officer assessed the cost of these measures, and his figure was lower than what the federal government was claiming.

I want to get back to the speech my colleague from Berthier—Maskinongé made about Bill C-208 at second reading. I want to make a little aside, though, and I want to acknowledge and commend our colleague, the member for Brandon—Souris, for his leadership. I would like to congratulate the Conservative Party for its leadership in this debate, because Bill C-208 has been given priority on two occasions at third reading. That is why we are debating it today. I hope that we will be able to vote on this bill by next week so that it can be sent to the Senate and then get royal assent. That would be the blessing that so many have hoped for. I will give some examples soon, but I just wanted to mention that.

The member for Berthier—Maskinongé said:

...what we are really talking about are small and medium-sized businesses, which are the backbone of our economy. We need to keep these businesses alive and make sure they survive. We need to make sure that these small businesses can keep going and that they are not put at a disadvantage where they will end up being bought out by big corporations. The survival of these small businesses is directly connected to the survival of our regions. This is why I am appealing to all of my colleagues.

I second my colleague from Berthier—Maskinongé's appeal because the Bloc Québécois stands for human-scale enterprises.

I also want to say that I got to be part of the debates that took place when Bill C-208 was sent to the Standing Committee on Finance. On March 9, Julie Bissonnette, a dairy farmer in L'Avenir and the president of the Fédération de la relève agricole du Québec, and Philippe Pagé, the FRAQ's general director and mayor of Saint-Camille, had this to say:

Bill C-208 is significant for young farmers because we believe it will encourage the transfer of farms to family members and go a long way towards correcting tax unfairness, while supporting a strong farming community.

As an organization whose mission is to protect the interests of the next generation of farmers and improve conditions for those starting out, it has taken a clear position. The FRAQ representatives also wanted the committee to know that some young Canadians are seeing their dreams evaporate because of ill-conceived tax rules. They said:

The numbers speak for themselves. A business that is transferred to a family member is six times more likely to succeed than a business transferred to someone outside the family. What's more, 70% of all entrepreneurs in Quebec would prefer to keep their businesses in the family. Even today, selling a business to a related party is the preferred way to transfer a farm. Our tax system should support all young farmers, no matter their path to business ownership, something the system does not currently do.

Marcel Groleau, from the Union des producteurs agricoles, echoed these comments. During the same meeting, he mentioned the pride that comes from completing a successful transfer, saying:

Some 98% of the country's farms are family owned and operated. That business model is a source of pride for Canadians. Family farming promotes sustainable growth, environmental stewardship and reinvestment in local economies.

He added:

According to a 2017 study by the Business Development Bank of Canada, nearly 40% of small businesses will be transferred or sold by the end of 2022 as owners near retirement.

There is an urgent need for action. Obviously, the reference to subsection 84(1) of the Income Tax Act is one of the things that needs to be revised. The act has not evolved to reflect the context and the demographic pressure that applies to farms.

I also want to mention the support of Daniel Kelly, the president and CEO of the Canadian Federation of Independent Business, or CFIB, who appeared before the Standing Committee on Finance and was quite happy to express CFIB's very favourable position on the bill. I should note that 17% of business owners are seriously considering shutting down, that Bill C-208 would facilitate business transfers and, most importantly, that it is time for a resolution and for significant action.

I will conclude by recalling two points raised by Mr. Groleau, who shared some data from the Commission de protection du territoire agricole, Quebec's farmland protection commission. He pointed out that everything is documented and that we are seeing an increasing number of transactions involving farmland being carried out by investors rather than by producers. The investors' interest lies in renting out the land while they wait to potentially do something else with it.

The devil is in the details, and it will be important to move on in order to meet the needs of the next generation of farmers.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Madam Speaker, I want to congratulate my colleague on his speech, which was interesting. My speech will be along the same lines as his, as it was all very sensible.

In his speech, my colleague said that Bill C-208, an act to amend the Income Tax Act, is not partisan. The bill does not belong to the Liberal Party, the Conservative Party, the NDP or the Bloc Québécois.

In fact, since there were no questions and comments following the remarks by the previous speaker, I would like to point out an oversight. I believe it was an oversight. Perhaps not, but I hope it was.

He mentioned some of the previous versions of this bill intended to facilitate the transfer of family businesses. Yes, the hon. member for Bourassa did in fact introduce legislation to facilitate the transfer of family businesses when he was in opposition a few years ago. Yes, it is also true that the former member for Rimouski-Neigette—Témiscouata—Les Basques, Guy Caron, had also introduced legislation to facilitate the transfer of family businesses.

However, my colleague may have forgotten that the member speaking right now, in other words me, also had the opportunity to introduce Bill C-275, which sought to facilitate the transfer of family businesses. I introduced it at roughly the same time as my former colleague from Rimouski-Neigette—Témiscouata—Les Basques. In fact, as we were announcing the introduction of this bill, my former colleague from Rimouski-Neigette—Témiscouata—Les Basques thought it was such a good idea that he quickly introduced his bill as well.

There was a bit of a friendly competition about doing the right thing. We wanted parents who want to hand down their business to their children to stop being penalized. This only makes sense, because it is good to see a family's achievement carry on.

Now it is the Conservatives' turn to introduce a similar bill. At the time, when they were in government, the Conservatives were against it, but now they support the cause. Of course we are very pleased to see that, but we are still disappointed to see that the current Liberal government does not seem to want to support the bill. It is hard to understand. How is it that when the Liberal and Conservative parties are in the opposition they want to do the right thing, but when they are in power they do not? That is quite disappointing, to say the least.

When this type of bill is introduced, many people pay attention to the ongoing debates. When the bill was introduced, and then when we began debating it, I immediately alerted certain businesses in my riding as well as some people I went to school with who also wanted to take over their family businesses. After seeing so many bills fail, they were all excited and hoped that this one would come to fruition.

In the meantime, after so many bills failed to pass in previous parliaments, the Quebec government decided to act. Quebec changed its tax legislation to allow the transfer of family businesses. It would seem that the federal government is frozen and incapable of moving forward. When either the Liberals or the Conservatives come to power, everything suddenly stops and fails to move forward.

I am making a heartfelt plea, which I believe echoes the pleas of the people who have been contacting me. They want to know what progress has been made on this bill and whether it will pass. Sometimes I tell them that even if my bill does not pass, some measures might well be included in a budget. In several economic updates and even in some budgets, the government stated that it would work to facilitate the transfer of family businesses and that it would examine the legislation to make certain improvements.

Once again, the government is giving people hope. People are thinking that maybe the government is finally going to do something. It is disappointing, because year after year there is always a holdup. Is it an administrative problem or does the bill run counter to some kind of interest? I do not know who would have an interest in preventing families from passing their business from one family member to another.

Passing a business on to the next generation is not easy. It is rare. People often say that it is difficult to transfer a business and to encourage their children to take over the family business. When their children do want to take over, why are we stopping them from doing so? Why would we financially penalize those who pass their business on to family members but not penalize those who do not? Why is it more profitable to sell one's business to anyone other than one's own children?

For example, I could sell my business to a stranger and make more money. There are many parents who have to think about that option. Obviously, all parents want what is best for their children, but when they see that passing their business on to their children could, in some cases, cost them hundreds of thousands of dollars, many of them have to stop and think about whether doing so is financially viable for them. Not all business owners have millions of dollars put away. Often these business owners invested in their business thinking that they would use it for their retirement. They therefore want to be able to benefit from it.

This is creating quite the dilemma for people. If they pass their business on to their children, then they may have to forgo their retirement. It is really disappointing to see that this situation has not yet been resolved. That is why I wanted to speak today, to bring to light this issue, this problem.

We also have to look further ahead. What happens when there is no one in a family to take over the business? The owner has to seek out someone else, approaching businesses or people who are already well established, such as a competitor, a bigger company. That is what poses a problem.

Family farms can disappear when they are taken over by larger farms. I have nothing against large farms, by why not let small businesses exist and prosper, run by people who are working for themselves and being their own boss? I think that would be nice. However, we are faced with a bill that hinders that possibility.

If we let farms disappear, if we let small businesses disappear because there is nobody to take them over, we are making other people think it is not easy to start a business or start a farm. Ultimately, if we want to allow those transfers, if we want to avoid seeing mega-businesses and mega-farms that are held by shareholders and operated by absentee executives and managers who live who knows where or are very far away from the customer, the consumer, we have to be flexible and attentive to this concern.

I studied accounting. Business owners and I are not the only ones saying we are frustrated. We are also hearing that from accountants, accounting students and professors, who have been saying for ages that the government is not interested in listening or understanding. We were hearing it back in the early 2000s, when I was in university. Professors did not understand why the government was not doing something about this issue. All the students were appalled to learn that, by law, this kind of capital gain was considered a dividend, which meant at least twice as much tax had to be paid on that gain. Financially, that hurts. Like it or not, money influences these decisions and affects the young people who would like to take over.

As I see that my time is almost up and I do not want you to interrupt, Madam Speaker, I will conclude with a heartfelt plea. I implore the government to finally listen to the wishes of the business world, small businesses, members of the House and members of the Standing Committee on Finance and to do the right thing by supporting and passing this much-needed bill.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

I would like to talk about an article published in the March 30, 2017 edition of the Journal de Montréal, during a debate on Bill C-274 introduced by New Democrat Guy Caron. The article mentions this bill introduced by the NDP and rejected by the Liberals, but I want to point out that my colleague Xavier Barsalou-Duval introduced in 2016 Bill C-275, which had the same objectives.

The Journal de Montréal article I am talking about says that the Liberals opposed the bill under the pretext that its implementation would cost between $800 million and $1.2 billion. They were then rebuffed by the Parliamentary Budget Officer who, as the taxpayers' watchdog, estimated that the annual cost would rather be between $163 million and $273 million. Those amounts are much lower than those the Trudeau government used to oppose the bill.

Mr. Kelly, do you think the numbers put forward are still realistic? How much do you think that kind of a measure would cost? In addition, what businesses would benefit most from it?

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Mr. Speaker, today's debate is about Bill C-208, an act to amend the Income Tax Act with respect to the transfer of small business or family farm or fishing corporation. This is a very important issue, and I am concerned about the government's ongoing failure to take action on it. This problem comes back year after year, and it has still not been resolved.

In Quebec, one in three SMEs is a buy-out. That means that one-third of Quebec's small businesses were existing businesses bought by someone else. That is a big deal, yet the government penalizes people who want to transfer their business to a family member. In 2018, it was estimated that 30,000 to 60,000 Quebec businesses would not find a buyer in the years to come, yet the government is actively penalizing people who want to buy out the family business. It would rather those businesses disappear or be sold to strangers. That is just great.

In the agricultural sector, Quebec is losing one farm a day. We know this, we talk about it and we speak out against it. The fishing sector is no different. Fifty years ago, fisheries were flourishing in the regions, but today, fishing villages are disappearing one after the other. This is sad, but it is partly due to inaction by this government and, obviously, governments before it.

During my previous term, from 2015 to 2019, I introduced Bill C-275 to address this issue by allowing family businesses to be transferred to members of the same family. I was made aware of this issue by some of my constituents, including Mr. Tremblay, from Armoires Tremblay in Saint-Mathieu-de-Belœil. Mr. Tremblay was in his 30s and his father owned a small, family-owned cabinetmaking business. His father wanted to retire and was waiting to sell his business to his children, in the hopes that one day the act would be amended and allow him to do so without being penalized.

Right now, the government assumes that people who sell their business to their children are fraudsters. It thinks that they will not set the price at fair market value, so it decided to tax the entire profit generated by the transaction. The problem is that a small company can quickly grow to be worth one, two or three million dollars, even if it does not employ a million people, but rather three, four, five, six or 20.

We cannot ask young people who want to take over from their parents to withdraw two million dollars from their bank account. Very few people in their twenties and thirties can withdraw one million dollars from their bank account. That is the problem. The government thinks that people who sell their business to their children are fraudsters because they will give them a better price.

That means that they will not be able to sell unless they sell to strangers. Businesses will have to close because there will be no one to take the reins. It is really frustrating to see how the government refuses to recognize and resolve this problem year after year.

Not so long ago, I was discussing this with an old school friend, Marc-André Daigneault. His parents have a company called Revêtement RJ. The same thing happened to him. His parents wanted to wait to sell their company in the hope that the rules would one day change. He is saddened by the fact that young people cannot take over their parents’ companies because the government does not want to modernize and change the legislation.

At the time, I had tabled a bill that was similar to Bill C-208. The NDP found the bill so appealing that it decided to copy it, and the former NDP member for Rimouski, Guy Caron, tabled it himself. I would not want to take all the credit for the bill, because this is something the Bloc Québécois has been fighting for for 15 years. As early as 2005, a Bloc Québécois member introduced a bill seeking to address the problem of passing down family businesses from one generation to the next.

I am an accountant by training. In my university years, when I learned the tax rules and understood that people could not pass a business down to their children—well, it is possible but very disadvantageous from a tax perspective—I was really frustrated and could not get over it. All of my classmates and professors agreed with me. If we visited a tax school, an accounting office, a lawyer’s office or any university and asked an accounting or tax professor what they thought of this, they would tell us that it makes absolutely no sense. Unfortunately, the government is digging in its heels and preventing family businesses from being passed down to the next generation.

In June 2015, however, the Liberal member for Bourassa introduced a bill concerning the passing down of family businesses. He said that it was his first bill and that it was extremely important. That was in June 2015. When the Liberals came to power in October 2015, just a few months later, they were suddenly against it. It seems that the Liberals promise all sorts of things when they are in the opposition but do not follow through when they get to power .

As my colleague from Rivière-du-Loup pointed out earlier, this is not a partisan approach. My Conservative colleague said he thinks transferring family businesses is important. I mentioned my NDP colleague earlier. I do not know the Green Party's position, but I know a lot of Liberals are not happy with their party's position and agree that it is ridiculous, so much so that the government now finds itself in an awkward position.

We have seen several economic updates and budgets since 2015. The government said it would tackle the problem and try to fix it. Now here we are in 2021, and it is still not fixed. The Bloc has been fighting for this since 2005. This is unacceptable.

There are solutions, however. The government is going to tell us that we would be opening up loopholes, but our tax law is full of loopholes. People use tax havens, and the government does not go after them, but it prevents the transfer of family businesses. How does that make any sense?

The government says that it is impossible, but we have tabled a number of bills to resolve the problem. In 2016, Quebec's Minister of Finance announced a solution to the problem in his budget. Since January 1, 2017, four years ago, Quebeckers have been able to pass down their business to their children without a tax penalty, but the federal government is unable to do the same. We do not know why, but it cannot do it. I think that the problem is stubbornness more than anything else.

Let us examine this question more in depth. The capital gains deduction in 2021 is $892,000. That means that you can sell a business you spent your entire life building without paying income tax on the first $892,000. It is similar to the sale of a tax-exempt home.

We also know that people with small businesses often do not have an RRSP. They pay themselves dividends or a small salary, and they have just as much as they need to get by. I am thinking about the neighbourhood mechanic or your local farmer. Often, they do not have any money put aside because they put everything back into the business. When they come to retire, they are very happy to have the $892,000, because retirement is expensive, and they need enough money to last the rest of their lives.

Unfortunately, the government does not allow them this $892,000 if they sell their business to their children. Selling their business to a stranger gets them an $892,000 deduction, but they have to pay tax on that amount if they sell to their children. Even worse, the tax payable on capital gains is normally half the amount. If they sell the business to their children, they have to pay income tax on the profit as if it were ordinary income or a dividend.

It boggles the mind that the government insists on voting against the bill when it is well aware of the problem, when we have been telling it for years, and when a number of bills have been tabled to resolve the situation. I try to understand, but I cannot. That is why I am very pleased that we have a minority government today and that, with the three opposition parties, we will be able to pass the bill.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Speaker, it is an honour for me to rise in the House.

Before I got into politics, I was the secretary to the Fédération de la relève agricole de l'Abitibi—Témiscamingue. My colleague, the member for Brandon—Souris, might be interested to know that.

The matter of transfers, particularly transfers to family members, is very important in Abitibi—Témiscamingue. I remember participating in a workshop about transfers hosted by the Réseau Agriconseils. A number of people attended because they were concerned about this issue, particularly since land value is different in Abitibi—Témiscamingue. Since our land is worth less than land in other parts of Quebec, it cannot be used as security as often. That is not the subject of this speech, but it is relevant when we are talking about the facility of transfer when a business is being transferred to a family member.

I had the opportunity to talk about this when I participated in the convention of the Fédération de la relève agricole du Québec, which took place in March in Rouyn-Noranda, located in my riding of Abitibi—Témiscamingue. As impossible as it may seem, still today, business owners are better off transferring their business to external shareholders than to a member of their own family.

I want to thank the member for Brandon—Souris for introducing his bill. I would have liked to introduce it myself, much like the member for Berthier—Maskinongé, as it is a fundamental issue. The Bloc Québécois supports Bill C-208. For several years now, my party has been calling for measures to encourage and facilitate the transfer of family businesses, especially in the agriculture and fisheries sectors. In fact, I would point out to my colleagues in the House that the member for Pierre-Boucher—Les Patriotes—Verchères introduced Bill C-275, an act to amend the Income Tax Act regarding business transfer in the previous Parliament.

The Bloc Québécois has been calling for measures to encourage and facilitate the transfer of family businesses for more than 15 years. For Quebeckers, for the Bloc Québécois, and for me, business succession is important. The next generation is important for the future of our SMEs in general, but especially for the family farming businesses in the Abitibi—Témiscamingue region.

Business succession is a major and promising phenomenon across Canada and especially in Quebec. Nearly one-third of Quebec's small and medium-sized businesses were buy-outs. In 2017, one-quarter of Canadian SMEs were takeovers. In Quebec, the majority of business buy-outs are in rural areas, where 44% of the SMEs belong to entrepreneurs who have taken over a business. In Canada, that figure is around 31%, according to UQTR professor Marc Duhamel, a regular researcher at the UQTR's small business research institute. Unfortunately, the government's unfavourable tax rules do little to encourage business succession.

The risk of sales to foreign buyers and businesses being lost is very real. In 2018, it was estimated that between 30,000 and 60,000 Quebec businesses would not find a buyer in the years to come and would die as a result. That represents around 150,000 jobs and $8 billion to $10 billion in revenue.

Right now, Quebec is losing one farm a day. That is alarming. The risk of sales to foreign buyers and businesses being lost is very real. In Quebec, the next generation of entrepreneurs is suffering badly. Unfortunately, this Parliament is not doing enough to support business succession.

Why does the Liberal Party not want to put a family member on equal ground with a foreign investor? Here are the facts. Under the existing legislation, the transfer of a business to a family member is treated as a dividend and not as a capital gain, unlike a sale to a third party. As a result, owners are not entitled to the lifetime capital gains exemption if they decide to sell the business to their children. The existing legislation is an affront to common sense.

Why does the Liberal Party of Canada refuse to amend the Income Tax Act? As we just heard, they appear to be worried about condoning tax evasion. That would explain why the Income Tax Act makes no mention of the notions of transferring, shuttering or selling a small business to a family member, for fear of potential abuse or tax fraud. If abuse and tax fraud are actual reasons, I am having trouble understanding why the Liberal Party continues to do nothing about tax havens.

As the member of Parliament for Abitibi—Témiscamingue, I have had the honour, along with members of my team, to speak with many farmers in my region week after week. I want to acknowledge the president of the Fédération de la relève agricole, Meghan Jarry. The federation and all business owners in Quebec see business succession as a key way to stop the outflow of businesses and Quebeckers to urban centres and to make it easier for young entrepreneurs to take over the family business.

Business succession is essential for Abitibi—Témiscamingue. It is essential for all of Quebec. The future of the Abitibi—Témiscamingue region is in the hands of the next generation of farmers.

I want to quote a farmer from the region, Simon Leblond, who is also a friend and a member of the Fédération de la relève agricole du Québec. He was the president of FRAQ when I was the secretary there. He said the following:

I am certainly going to have challenges, starting with the financing and development of my company, of course. There are also other issues unique to my region, including maintaining a large enough pool of producers to maintain services for farms and, more generally, to ensure the vitality of the industry and make it known to those outside the world of agriculture.

The next generation of farmers is essential because it ensures the vitality of agriculture, which in turn ensures the vitality of the towns in our regions. The vitality of our regions ensures the vitality of Quebec, the dynamic use of our land.

I think we need to talk about distress. In Abitibi-Témiscamingue and other parts of Quebec, farmers young and old are struggling. They have to deal with red tape, paperwork, long hours of work, their roles as mothers or fathers, bills, the stress of everyday life, the stress of being in debt, equipment that breaks down and has to be repaired or replaced, short production and crop seasons, poor weather conditions and all of the other pressures they are under.

Farmers are in real distress. Encouraging and facilitating the transfer of family businesses could alleviate some of that distress. I think that is an important reason for members of the House to support Bill C-208.

Now I would like to talk about what things are really like for new farmers. We all know farmers are stubborn and tenacious people. They are probably the most resilient members of our society. Young farmers are constantly looking for ways to access assets and encourage the transfer and start-up of agricultural businesses in Quebec. They face major challenges, including land grabbing and land financialization, income security, vet services for farm animals, crop insurance and agricultural drainage. These are major challenges. Improving access to land and improving quality of life for Quebec's young farmers is one way to ensure a future in agriculture for Quebec's youth.

It is the duty of this Parliament to create conditions conducive to establishing the next generation of farmers in order to attract that next generation and secure the future of small and medium family farms. That cannot happen without easier access to land. Transferring a farm is the best way to get a start in farming because starting a farm from scratch is very hard.

On top of that, land prices, the cost of quotas and production standards are increasing every year. Farm values are increasing. It takes longer and longer and is increasingly difficult to transfer the farm to one's children. Paying back the loans needed to purchase a farm takes so long and the red tape is becoming increasingly cumbersome, making it increasingly difficult for farmers to access land and operate their businesses. Farmers want the process for purchasing a farm to be simplified. Some are calling for a single-desk model to avoid having to speak to too many stakeholders in a transfer process. Everything I have mentioned from the beginning of my speech reflects opinions expressed by the Fédération de la relève agricole du Québec, which works to improve the lives of young farmers in Quebec.

Just today, actually, I spoke with Julie Bissonnette, the president of the FRAC, and its executive director, Philippe Pagé. Regarding the transfer of a family farm, the Fédération de la relève agricole du Québec is unanimous: It is just wrong that it is more advantageous to sell the family farm to a stranger than to a family member. Julie Bissonnette told me today that she is always asked about this issue no matter where she goes. Young farmers in Quebec and the Abitibi—Témiscamingue region have been calling for legislative changes for several years now.

She also told me that it was a problem on both sides. The transferors also want this to change. The oldest farmers in Abitibi-Témiscamingue want to transfer their farms to family members. This means that local farming will be put on hold. Dozens, if not hundreds of young future farmers and transferors want to be able to make transactions. This is a global issue. This desire to transfer their farm to their children is part of what has been driving older farmers to work as hard as they do and invest so much time in it for 30, 40 or 50 years. It may even span two, three, four or five generations. Farmers work like mad to provide a future to their kids. Selling their farm to a stranger can lead to feelings of failure or profound grief.

For farmers, it is a big step to hand over the farm to their children out of love and devotion. That is what I have heard from FRAQ members, young and old alike, who feel concerned. Their greatest wish is to be able to hand over their farms to their families.

I will conclude by mentioning that the tax arguments raised when the last point was rejected do not hold up well if we look at the PBO study. In my opinion, if things are not moving right now, it is because there is a flagrant lack of political will on the part of the Government of Canada. This lack of will needs to stop, and that is why the Bloc Québécois supports Bill C-208.

I expect the House to unanimously support this bill in order to prevent this outflow of people to urban centres and to foster the entrepreneurial spirit of our young farmers.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

moved for leave to introduce Bill C-275, An Act to amend the Income Tax Act (business transfer).

Mr. Speaker, I rise in the House to introduce a bill seconded by my colleague from Manicouagan. The purpose of the bill is to amend the Income Tax Act with respect to business transfers. As we all know, the population in Canada and Quebec is aging. As a result, there are certain needs regarding the transfer of businesses that are becoming increasingly urgent and important. Unfortunately, under the existing rules, there is a certain tax unfairness that makes it disadvantageous in some cases for people to transfer a business to their children or other family members. The purpose of this bill is to amend the act, specifically section 84(1), to include the children and grandchildren of shareholders, so that they are not put at a disadvantage when family businesses are transferred.

(Motions deemed adopted, bill read the first time and printed)