Agriculture Committee on Nov. 5th, 2024

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Thank you very much for being here, for your testimony and for your deep understanding of the challenges of family farms. Thank you for your proposals.

When I'm listening to you, I'm thinking about the other businesses that might be rural, capital-intensive, equipment-intensive, seasonal perhaps, and subject to weather, climate change, floods and fires. Those would be things like ecotourism, forestry operations and fisheries. There would be the similar type of family ownership in some of those businesses, and succession issues.

Would you be advocating that any solutions you're bringing forward for the family farm transition and succession should be applied also to other businesses that have some elements in common with the farming challenges?

[Coralee Foster]

I can take a run at it.

The one difference in agriculture is that all of those things are capital-intensive. I think that comes back to the fact that the margins are sometimes lower in agriculture than in some of those others. However, as you said, a lot of the same theories could apply. I don't think it's wrong to consider it, if it's in the interest of preserving family businesses.

One thing I would add, though, is that a lot of farms have diversified, too. We have farms with an on-farm grain elevator or with agri-tourism or some other piece. That's always a challenge, because sometimes those actions on a farm can put them offside of the farm taxation rules as well. That's something to be considered.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Mr. Chaffe or Mr. Dionne.

[Jack Chaffe]

The only thing I would add is that normally on a farming operation, any profit you make, if there is profit there, is all invested back within the farm, whereas a lot of small businesses would be taking a wage out of that, and, as well, building a retirement fund. It's not all of them, but, as Coralee said, the margins are so tight within farming that a lot of times there just isn't that capital to put away for investment for retirement. The investment is the farm. When they have to give up a huge portion of that on their sale to the government, a lot of farmers could be left in poverty after building their empires throughout their lives.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Okay.

Mr. Dionne, do you want to speak?

[Louis Dionne]

Yes.

I'll answer very quickly. It's definitely a big challenge. That's why we really need to be able to find innovative agricultural ownership models. That's also why we have to be able to offer other types of arrangements, whether through co-operatives, rentals or any other existing model.

I think it's important to be able to think outside the box to offer different models from what we've seen in the past.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Thank you.

I will pass it over to my colleague.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you to all our witnesses for being here.

It's a really interesting and important issue, how we pass farms on and how we keep farming going in Canada.

Mr. Dionne and Moe Garahan, you talked about different models. Looking at the average age of farmers and the need for succession planning, I'm wondering about the concept of the family-owned farm and having special treatment for family-owned farms versus other farms. I look at some family-owned farms that are huge corporations and are very profitable. In fact, I think the largest 10% of farms in Canada make up two-thirds of the revenue.

Do you find using the term “family-owned farm” is still useful in facilitating the broadest range of people who can possibly keep these farms and ensure that these businesses keep operating?

[Moe Garahan]

I thank you for that question and emphasize that supporting family farms is critical, and we support our colleagues around this table. However, this committee's almost singular focus over time on family farm transitions has left a humongous number of new farmers out of the picture. I think it has to be a diversified conversation here in order for you to meet your targets and support the diversity of new farmers.

I think the definition of family has to change. There have to be the same mechanisms. I know that's tough, but you can determine a bona fide farmer and have severe penalties if the land is not farmed. That prohibitively prevents speculation purchasing, but we need to have the same mechanisms for out-of-family transfers. That is where we are right now.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Okay.

Mr. Dionne.

[Louis Dionne]

Earlier, I think David Beauvais suggested that 35% of transfers are to family members, which means that 65% of transfers are non-family. Our service mainly focuses on non-family transfers. Certainly, it would be a great help if there were significant tax and governmental benefits to that kind of transfer. We mustn't disregard that. I think in the future there will be more and more transfers that are non-family.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Very quickly then, there were suggestions made that the tax advantages of a family transfer should extend to nieces, nephews and other family members.

Do you think they should also, then, extend to other bona fide farmers, who are going to take over and actually farm? We're extending it to the larger family, but why do we stop there? Why not extend it to immigrants who are coming to the country, trying to build a farm?

[Moe Garahan]

That's right. It has to go to who the new entrants are, which is a diversified group of people who extend beyond the traditional definition of family. It has to be available to third parties.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you.

[The Chair, Liberal, Kody Blois]

Just out of curiosity, colleagues, I went on ChatGPT and asked the question, “If I were seeking to become a new farmer and enter, what are the programs?” Obviously, there is the Canadian agricultural loans act program, which is up to $500,000, and there's the young farmers loan under the FCC.

My quick question is for Coralee. Is part of our job here to extend the ability to access very low interest-to-cost debt or maybe go even further and have it be truly debt-free for a certain portion? Is it going to take, in the next 10 years, a major financial type of package between governments and financial institutions to help make that smooth transition, whether or it's intergenerational or external?

[Coralee Foster]

I think that would be great. I definitely think that would be helpful to anyone taking over. As I said in my presentation, family members often have a vendor take-back, and they have a promissory note.

Invariably, I find the first generation underestimates how much they need to comfortably live their retirement. Not only is it a struggle sometimes for the new generation coming in, but sometimes the generation going out struggles as well, because it's become the banker.

[The Chair, Liberal, Kody Blois]

I want to thank all the witnesses. You were very patient.

Thank you to my colleagues. I know we had votes, but I thought that was a very productive session.

I see Monsieur Perron taking a look at me.

I want to close here. I'm going to release our witnesses and thank them on behalf of our colleagues for providing their testimony today.

We are coming back on Thursday.

Mr. Perron, go ahead very quickly, please.

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

Mr. Chair, you didn't mention at the beginning of the meeting whether the sound checks had been done. Today's meeting is obviously unusual. We started late and we had to combine the two panels.

I want to make sure that, in future meetings, sound checks are done and the fact that they were completed is announced at the beginning of the meeting. I don't know the reason for today's technical problems, but you can appreciate how frustrating it is when we can't get answers from the witnesses, given that time is already limited.

[The Chair, Liberal, Kody Blois]

Mr. Perron, I forgot to explain the instructions I normally give to all panels. We always do sound checks. However, for Mr. Caron and Mr. Beauvais, today's technical problem may have been due to the Internet connection. I don't know exactly. It's always important to follow the interpreters' advice. The sound checks were in fact done.

Colleagues, we are back on Thursday. We'll go from 8:30 a.m. to 10:00 a.m. The railroads are not able to make it on Thursday. They requested November 19. What we are going to do is this: We'll have five witnesses, so we'll do a super-panel. Again, it's from 8:30 a.m. to 10:00 a.m., so you get a few extra minutes to sleep in on Thursday morning.

On the 19th, we are going to be doing railroads. The Railway Association of Canada and Transport Canada will be in one panel, for about an hour and 20 minutes. This will be followed by our first crack at the CBAM study, which our analysts are preparing.

That's our agenda. We'll see you on Thursday.

The meeting is adjourned.