Agriculture Committee on Nov. 5th, 2024

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thanks, Mr. Chair.

I'm going to advise you that I will be sharing my time with you, Mr. Chair, in case you didn't know.

My first question would be for Ms. Foster.

I believe it was you who said that Growing Forward 2 had some dollars for succession in its programs. Despite that, though, we're still facing.... Depending on which statistics you're looking at, we're still seeing that only 8% to 12% of farmers and small businesses have a succession plan.

What do you think the issue is in terms of, let's say, the grand majority of small businesses and farmers not adopting a succession plan? How do we raise the profile and ensure that people sign on? How do we raise the importance of having a succession plan?

[Coralee Foster]

I think that a lot do have one, but they've not formalized it. It's in their heads. There are intentions of what it's going to be. Formalizing it is often something small business owners don't care to do. They don't like paperwork. They'd rather be running their businesses or their farms. I think that's the first problem.

I did find the Growing Forward.... As I said, I think it did encourage people to do things sooner and to put some thought into it sooner. Something like that, again, would be helpful. It provided some dollars, and it certainly was beneficial.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Okay, but that didn't necessarily move the needle. Twenty years ago, we were still at only 10% of farmers and small businesses having a succession plan, right? These are CFIB's own numbers. I'm quoting their numbers.

There has to be something more that we can do for greater adoption of succession planning. That measure alone may have motivated more people, but it's still not enough to have a significant impact. When policy-makers are looking at this, they're saying that this particular program didn't necessarily have a major impact, that it didn't move the needle far enough.

There has to be something else we can do. If you have any recommendations on that, I'd love to hear them.

[Coralee Foster]

I can't think of anything specific, but I think it comes back to the fact that there just aren't.... There's a lot of succession planning to be done and not necessarily enough qualified people to do it, given the complexities and the changing environment as well. Simplifying things would be helpful, and I do think that having funding available is helpful.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Okay. Thank you.

My next question is for Mr. Dionne.

Mr. Dionne, I find the concept of L'ARTERRE very compelling.

I'll call you an intermediary. I've already visited your website, and I find it very interesting.

You say that the lack of funding means that you can't advance further into other territories.

Is that the main difficulty right now?

[Louis Dionne]

Actually, funding is established according to the sector agreements for each territory. It therefore differs from one region to another, making it very difficult to guarantee similar quality or harmonization of service in all regions. That's why we overhauled our business model; we wanted to move towards provincial funding, so that we could say that we would cover at least 80% of people's salaries in the regions, and be able to guarantee service everywhere. We don't want there to be service-free zones in Quebec, whatever the municipality. We have to be able to guarantee the quality and harmonization of services. We also need better promotion. If we approach retiring farmers six months before they decide to leave farming, it's too late to find a buyer. We want to contact them long before they decide to leave farming.

Currently, what's missing is provincial funding. In other words, regional funding should become provincial funding. That would allow us to provide service at a provincial level.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

All right, thank you very much.

[Louis Dionne]

I should point out that the service is managed locally by economic partners and they are coordinated by the Centre de référence en agriculture et agroalimentaire du Québec, or CRAAQ.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

All right, thank you very much.

Kody, it's over to you.

[The Chair, Liberal, Kody Blois]

Allan, I want to start with you.

It's great to see you. Thank you for the work that you and Carolyn and the entire board of the Nova Scotia Federation of Agriculture do for advocacy in our province.

You talked about land banks, which we heard about from other witnesses, and I think that's important.

I want to talk about a financial tool. When I have conversations, whether with you or with other farmers at home or across the country, it seems that the math around the capital assets, whether it be land—which you rightly highlighted—or just equipment, machinery and buildings, is far outpacing the operational income to support the debt that you have to take on to properly pay out the farmer who's retiring.

Do you think there are some existing tools the government at the federal level could enhance, whether they be the Canadian Agricultural Loans Act or other types of elements, so we could try to have lower cost financing to help smooth out that transition?

Is that a legitimate goal that we should be working toward as parliamentarians?

[Allan Melvin]

I think anything that reduces costs for the new entrant, like, in this case, minimizing or reducing interest costs, as you noted, would be a benefit. There are some programs from various lenders—provincial lenders, and federal lenders like FCC, for example—that do encourage that through reduced rates.

When we look at the whole basket of challenges as new entrants trying to get into the industry, interest costs are a significant burden. We have a significant borrowing cost up front when we take on a new farm. There are all of those other financial challenges as well, so we have to look at that whole basket at the end of the day.

[The Chair, Liberal, Kody Blois]

Okay. Thanks so much.

I have just another 30 seconds here.

Mr. Barlow talked about on-farm costs and carbon pricing. I do hope that his party will allow Bill C-234 to actually come to a vote. I know we've talked about that before, Allan.

[A voice]

Hear, hear!

[The Chair, Liberal, Kody Blois]

I hear some “Hear, hear!” in the room.

It's unfortunate that it has taken this long and we're still not actually at a vote. We've talked about this and what it means to farmers. The Conservatives like to signal it in the House, but we have to actually be able to get there.

Hopefully, Mr. Barlow, with your help we can let the member for Huron—Bruce come forward, and we can all rejoice.

I'm going to go to Monsieur Perron.

It's over to you for six minutes, please.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you, Mr. Chair.

I'd like to thank the witnesses very much for being with us today.

You'll understand that unfortunately we won't have time to put questions to each of the witnesses. I apologize in advance. This is part of the inconvenience of our work.

I would therefore like to invite each and every one of the witnesses to send the committee their concrete proposals in writing on subjects we may have dealt with superficially or too quickly. In this way, all committee members can apprise themselves of them, and we can make intelligent recommendations to the government. That's the purpose of this exercise. I thank them in advance.

Mr. Caron, I'll start with you.

It's always a pleasure to see you, even if you're on screen.

You were quick to make several recommendations regarding succession and land values.

Could you briefly explain your main requests for the next generation to have access to land?

[Martin Caron]

Thank you for your question.

I may let Mr. St‑Roch or Mr. Tougas add comments on this subject.

The fact that agriculture is one of the sectors that takes the most capitalization to make a dollar of farm revenue is one of the important aspects. We're at the point where it takes an investment of eight dollars to generate a dollar of farm revenue. Farmland has a direct impact on this aspect.

That's why we've talked about a few things today, whether it's land trusts or farm trusts, among other things, that help lighten that burden.

I'll turn the floor over to Mr. St‑Roch or Mr. Tougas, who can continue in this vein.

[Marc St-Roch, Accounting and Taxation Coordinator, Research and Agricultural Policy Directorate, Union des producteurs agricoles]

Good evening, everyone.

I'd like to bring up the possibility of extending the transfer of tax rules favouring family transfers to nephews and nieces, in the case of group farm businesses. Other witnesses have talked about this. Businesses are getting bigger and bigger, and in many families, brothers and sisters jointly operate the business—

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

I apologize for interrupting you, Mr. St‑Roch. What you're telling us is extremely important, but time is limited.

It seems to me that we've been talking for a long time about the issue related to nephews and nieces. Everyone understands how important it is. Weren't you working on this and making contacts? Didn't the government promise to settle this issue?

How come it hasn't been done yet?

[Marc St-Roch]

I can't tell you.

Of course, we've been making these requests for several years. The other speakers made the same point. At present, tax rules force a farmer who wants to transfer part of his business to his nephew or niece to declare capital gains that are taxable at the time of the transaction, even if he does so for no consideration, i.e., if he gives his business to the nephew or niece so that he or she can continue to run it without incurring a tax burden, which can be done between a parent and child. This is an additional burden that limits transfers. Very often, one of the parents or brothers doesn't have a successor and wants to pass the torch to his nieces and nephews, and these people run up against this tax obstacle. These are costs that you wouldn't normally have to pay in the case of a transfer between a parent and child.

We think this should be corrected, because farms are increasingly owned by groups.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you, Mr. St‑Roch.

I'd like to hear from the people from the Fédération de la relève agricole, Mr. Beauvais and Ms. Simard Brochu, on this subject.

[David Beauvais]

Thank you for your question.

As we mentioned earlier, yes, many of our members with slightly larger farms have nephews or nieces who need that tax exemption. While Bill C‑208 has made some good improvements, there's still some work to be done. From a tax standpoint, it's certainly part of the government's powers to financially help young people gain access to this land.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Mr. Dionne, you'll have about 30 seconds to answer.

You said that you lacked funding, but, if I understand correctly, it's essentially Quebec that funds you, and there is some funding from the regions as well. You think that the federal government could provide an envelope to support the implementation of a structure like yours just about everywhere. Is that right?

[Louis Dionne]

The funding we receive to offer this service comes from sectoral agreements with various Quebec ministries: the Ministry of Municipal Affairs and Housing, the Ministry of Economy, Innovation and Energy, and the Ministry of Agriculture, Fisheries and Food, MAPAQ. When it comes to coordinating the service, the lion's share of funding consists of a payment that comes to us from our economic partners in the regions, and a small portion comes from MAPAQ.

We would therefore like to supplement the provincial funding to be able to offer this service everywhere. We'd also like other provinces to have access to a similar service. In fact, several of them have expressed an interest. Young Agrarians wants to work with us and reach out to other provinces to see which ones would like to have access to such a service.

[The Chair, Liberal, Kody Blois]

Let's go over to Mr. MacGregor for six minutes, please.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you, Mr. Chair, and I'll echo my colleagues in saying thank you to all the witnesses for helping guide us through.

In the part of the country where I live, on Vancouver Island, we're being faced by significant land price issues. Where I live, in the Cowichan Valley, I am very close to the agricultural land reserve, and you can certainly see the land values increasing significantly year after year.

Mr. Melvin, maybe I'll start with you, on the other side of the country. I think I heard you say in your opening statement that only 8% of farmers have a succession plan, but that 62% of Nova Scotia farms are set to be transferred in the next decade. There's obviously quite a discrepancy between those numbers.

Could you just reiterate, when most farms are set to be transferred in the next decade, why is it that so many farmers are not putting this planning into place? Is it because they are so overwhelmed with the amount of work they're having to do, or there is no heir apparent? We just want to have some additional information so we can provide some good guidance to the government on this.