Francine Raynault

[Facilitating the Transfer of Family Farm or Fishing Corporations Act, June 18th, 2015]

Mr. Speaker, I would like to thank my colleagues who have spoken to this bill.

In recent weeks, I had the opportunity to present my bill to farmers with the UPA. As my colleague from Drummond just said, in 2013 I toured the farms around the riding of Joliette. We had a chance to talk about Bill C-661, as well as other issues surrounding young farmers and the transfer of family farms.

I came away enriched by these discussions, which confirmed that Bill C-661 is truly a step in the right direction, if not a miraculous solution. It is a small change, but as we have said again and again, it is an important one.

Members will recall that 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. 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 is an inconsistency that affects family farms held by siblings, depriving them of the flexibility they need at this time.

I should point out that land grabs have inflated the value of farms to the point where it is now unthinkable that a farm belonging to brothers and sisters might survive if one of the owners leaves. In fact, the income tax alone on the value owned by one of the partners could destroy the farm’s profitability. In Quebec, for example, the value of land has increased by 600% over the past 23 years.

Still in Quebec, the number of transactions has increased by 67% in the past year alone, and the value of those transactions has climbed by 84%. The main players in these transactions have no interest in agriculture, and their actions are primarily speculative. It is the same throughout Canada, so much so that Saskatchewan recently passed legislation prohibiting purchases of farmland by pension plans.

This state of affairs is of great concern to me and, as a former farmer, I can clearly see the risk that it poses to the future of farming in Canada. It is dangerous. Unfortunately, I am afraid that we are encouraging an industry of paid farmers rather than entrepreneurial farmers.

Frankly, it has become impossible for a young family to get into farming if the family members do not have any relatives who are farmers, and even if they do, it is not easy to transfer ownership. In fact, the current situation is still conducive to selling to a large investment company that is outside of the family. This puts our food sovereignty into jeopardy.

Society has made this choice, but is it our choice? I do not think so. We have the ability to turn back the tide. There is still much to be done to help the next generation of farmers, but Bill C-661 is a step in the right direction. This bill is a clear solution to a glaring problem.

Over the next few years, the aging of the population will affect farming as it will everything else, and we will see more and more brothers and sisters becoming owners of a farm. We have to give them the flexibility they need to embark on this adventure confidently.

Once again, I think that the NDP has found a concrete solution for our family farms, and we will continue defending them staunchly. I hope that all my colleagues on the government side will vote in favour of this wonderful bill.

[International Trade, May 28th, 2015]

Mr. Speaker, during my most recent meeting with the UPA, everyone around the table had the same question on the tip of their tongue. Everyone wanted to know whether supply management was on the negotiating table for the trans-Pacific partnership. We know that the Conservatives were not shy about sacrificing certain parts of our system for the agreement with the European Union.

Can the Conservatives tell us whether supply management is on the negotiating table for the trans-Pacific partnership?

[Business of Supply, May 26th, 2015]

Mr. Speaker, I would like to thank my colleague for her speech. This is certainly a very important motion. We are pleased that the Liberals intend to support the NDP's proposal to create the position of parliamentary chief science officer.

There is one thing I would like to know. During every election campaign, the Liberal Party promised to make science a priority, but then every time it tabled a budget, it made heavy-handed cuts to funding for science and research.

What does my colleague have to say about that?

[Business of Supply, May 26th, 2015]

Mr. Speaker, I thank my colleague for her speech. As we just said, the Conservatives have slashed over $1 billion from science budgets, and over 4,000 research positions have been eliminated.

How does political interference in scientific communication undermine our researchers and democracy in general?

[Petitions, May 26th, 2015]

Mr. Speaker, today, I am pleased to present a petition to eliminate the GST on feminine hygiene products. As I already said, I have three daughters and they have seven daughters. Let us just say that that costs parents a lot of money. It is fair and reasonable to eliminate the tax on these products because women have no choice but to use them.

[Facilitating the Transfer of Family Farm or Fishing Corporations Act, May 12th, 2015]

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.

[Facilitating the Transfer of Family Farm or Fishing Corporations Act, May 12th, 2015]

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.

[Facilitating the Transfer of Family Farm or Fishing Corporations Act, May 12th, 2015]

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.

[Lanaudière Native Friendship Centre, May 11th, 2015]

Mr. Speaker, for the past three years, the Lanaudière native friendship centre has been organizing the Motetan Mamo nation-to-nation march.

The march is approximately 185 kilometres long and goes from Joliette to Manawan. It is a fundraiser to assist Atikamekw people who have to leave Manawan in order to receive dialysis, which takes half a day every three days.

This event is a demonstration of solidarity, but it also brings together the nations in our region. It is a classic example of the extraordinary work that friendship centres do across the country.

I would like to take this opportunity to commend the Regroupement des Centres d’amitié, whose representatives are on the Hill today, and I invite all my colleagues to take the time to learn more about the friendship centres in their regions.

[Petitions, May 7th, 2015]

Mr. Speaker, I join my colleagues in calling on the government to eliminate the GST from feminine hygiene products. I have three daughters and one of them has four daughters. Imagine how much that costs in GST every month.