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 (2021) Early Learning and Child Care Act

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

C-208 (2013) An Act to amend the Supreme Court Act (understanding the official languages)

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 amends the Income Tax Act to equalize the tax rate applied to the transfer of small businesses, family farms, or fishing corporations to family members versus third parties.

Conservative

Unfair tax rules: The current Income Tax Act unfairly punishes individuals selling their small business, farm, or fishing operation to family, taxing it differently than a sale to a stranger.
Level the tax playing field: Bill C-208 aims to amend the Income Tax Act to provide the same tax treatment for selling a business, farm, or fishing operation to a family member as to a stranger.
Support family businesses: The bill supports keeping small businesses, farms, and fishing operations in the family, promoting locally owned enterprises and preserving generational legacies in communities.
Includes safeguards and support: Safeguards are included in the bill to prevent tax avoidance, and it has received support from tax experts and organizations who testified at the finance committee.

NDP

Supports bill to fix unfair tax rule: The NDP supports Bill C-208 to fix the unfair tax rule that makes selling a family business to a child less profitable than selling to a stranger.
Helps keep businesses in families: The bill helps families keep their life's work in the family, preventing assets from being sold off and keeping businesses local for communities.
Not a tax evasion loophole: The bill, initially developed by a former NDP member, includes measures like a five-year ownership requirement to prevent it from being used for tax evasion.
Supports struggling family farms: The bill is critical for supporting generational family farms by making succession easier and addressing financial challenges faced by the sector.

Bloc

Equalizes tax treatment: Bill C-208 provides the same tax treatment for selling a business to a family member as selling to a third party, correcting an injustice.
Supports family business succession: The Bloc strongly supports the bill to facilitate the transfer of businesses, particularly farms and fisheries, to family members, protecting regional economies and jobs.
Criticizes government opposition: The Bloc criticizes the Liberal government's hesitation, disputes claims of high costs or tax evasion risks, and notes Quebec has already implemented similar measures.
Calls for urgent passage: Citing years of delay and support from agricultural and business groups, the Bloc urges Parliament to pass the bill quickly to provide certainty for family transfers.

Liberal

Addresses tax unfairness: The party recognizes a long-standing need for fairness and equity in the taxation of intergenerational transfers of family farms, fisheries, and small businesses.
Supports bill despite concerns: Despite concerns about potential misuse by corporations for tax avoidance, the party believes the bill is necessary to fix the current inequity and supports its passage.
Potential issues can be fixed: While acknowledging concerns about tax avoidance, members note that the government has the ability to address any issues that arise in reality through future legislative measures.

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Income Tax ActPrivate Members' Business

May 12th, 2021 / 3:10 p.m.

The Speaker Anthony Rota

It being 3:12 p.m., pursuant to an order made on Monday, January 25, the House will now proceed to the taking of the deferred recorded division on the motion at third reading stage of Bill C-208 under Private Members' Business.

Call in the members.

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

Vote #112

Income Tax ActPrivate Members' Business

May 12th, 2021 / 3:40 p.m.

The Speaker Anthony Rota

I declare the motion carried.

(Bill read the third time and passed)