Bill C-208 (Historical)

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

This bill is from the 43rd Parliament, 2nd session, which ended in August 2021.

Sponsor

Larry Maguire Conservative

Introduced as a private member’s bill.

Status

This bill has received Royal Assent and is now law.

Summary

This is from the published bill. The Library of Parliament has also written a full legislative summary of the bill.

This enactment amends the Income Tax Act in order to provide that, in the case of qualified small business corporation shares and shares of the capital stock of a family farm or fishing corporation, siblings are deemed not to be dealing at arm’s length and to be related, and that, under certain conditions, the transfer of those shares by a taxpayer to the taxpayer’s child or grandchild who is 18 years of age or older is to be excluded from the anti-avoidance rule of section 84.‍1.

Similar bills

C-208 (43rd Parliament, 1st session) An Act to amend the Income Tax Act (transfer of small business or family farm or fishing corporation)

C-274 (42nd Parliament, 1st session) An Act to amend the Income Tax Act (transfer of small business or family farm or fishing corporation)

Elsewhere

All sorts of information on this bill is available at LEGISinfo, an excellent resource from Parliament. You can also read the full text of the bill.

Bill numbers are reused for different bills each new session. Perhaps you were looking for one of these other C-208s:

C-208 (2025) National Livestock Brand of Canada Act

C-208 (2021) Early Learning and Child Care Act

C-208 (2015) An Act to amend the Canada Evidence Act (interpretation of numerical dates)

Votes

May 12, 2021 Passed 3rd reading and adoption of Bill C-208, An Act to amend the Income Tax Act (transfer of small business or family farm or fishing corporation)

Feb. 3, 2021 Passed 2nd reading of Bill C-208, An Act to amend the Income Tax Act (transfer of small business or family farm or fishing corporation)

Debate Summary

This is a computer-generated summary of the speeches below. Usually it’s accurate, but every now and then it’ll contain inaccuracies or total fabrications.

Bill C-208 seeks to amend the Income Tax Act to equalize the tax rate applied to the sale of a family business, farm, or fishing corporation to a family member versus a third party.

Conservative

Current tax rules unfair: Current tax laws unfairly penalize owners who sell their small business, farm, or fishing corporation to a family member compared to selling to a stranger.
Bill C-208 equalizes tax: Bill C-208 aims to equalize tax treatment, allowing family transfers to be taxed as capital gains, enabling use of the lifetime capital gains exemption like third-party sales.
Supports family businesses: Passing the bill supports intergenerational transfers, helps keep businesses in families, protects owners' retirement, and strengthens local economies across Canada.
Support for common sense bill: Conservatives urge all parties to support this non-partisan, common-sense bill, which includes measures to prevent tax avoidance, to help Canadian entrepreneurs.

NDP

Supports bill C-208: The NDP supports the bill at second reading to send it to committee, recognizing its importance for intergenerational transfer of small businesses and farms.
Fixes tax unfairness: The bill ends the unfair tax penalty that currently makes selling a business to a family member significantly more expensive than selling to a stranger.
Protects family businesses: Ending the penalty encourages keeping family businesses, farms, and fishing operations within communities, preventing economic leakage to large corporations.
Disputes government cost claims: The NDP disputes the government's high cost estimates for the bill, citing much lower figures from the Parliamentary Budget Officer and highlighting government failures on tax havens.

Bloc

Supports bill C-208: The Bloc Québécois supports Bill C-208 to encourage and facilitate the transfer of family businesses, especially in agriculture and fisheries.
Fixes unfair tax rules: The bill addresses the current unfair tax legislation that treats family business transfers as dividends, unlike sales to third parties which are capital gains eligible for exemption.
Prevents business loss: Current rules disadvantage family transfers, potentially leading to businesses closing or being sold to strangers, threatening jobs and regional vitality.
Long-standing Bloc priority: Facilitating family business succession has been a Bloc Québécois priority for over 15 years, with similar bills introduced previously.

Liberal

Supports family business transfer goal: The Liberal party supports the bill's goal of facilitating the transfer of family businesses, farms, and fishing corporations between family members, recognizing their importance to the economy.
Creates tax avoidance loopholes: Concerns exist that the bill's amendments to complex tax anti-avoidance rules (Sections 84.1 and 55) could unintentionally create new tax avoidance opportunities.
Benefits wealthy disproportionately: The potential loopholes created by the bill's changes to tax rules could disproportionately benefit wealthy individuals rather than the middle class.
Requires cautious study: Amending complex anti-avoidance rules in the Income Tax Act, like those in Sections 84.1 and 55, requires careful consideration, rigorous study, and debate.

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Income Tax ActPrivate Members' Business

February 3rd, 2021 / 5:55 p.m.

The Assistant Deputy Speaker Carol Hughes

The House will now proceed to the taking deferred recorded division on the motion at second reading stage of Bill C-208.

(The House divided on the motion, which was agreed to on the following division:)

Vote #47

Income Tax ActPrivate Members' Business

February 3rd, 2021 / 6:40 p.m.

The Assistant Deputy Speaker Carol Hughes

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on Finance.

(Bill read the second time and referred to a committee)