Thank you.
Thanks for the opportunity to present to you today. My name is Ron Bonnett. I'm actually a farmer but also the president of the Canadian Federation of Agriculture.
The CFA speaks on behalf of the farming industry to make sure that it becomes a viable and strong industry, not only for the farmers we represent but also for the communities we live in.
I think agriculture right now is uniquely positioned to be one of those success stories going forward. We're seeing rises in commodity prices. We're seeing demand increasing. Canadian agriculture is uniquely positioned to take advantage of the opportunities that are coming up worldwide. What we need is the government's support to make sure that we have a competitive environment, and a broad-based policy that really focuses in on the types of things agriculture needs.
I'm going to make a couple of general comments as well as some comments about some specific tax measures that we need to move forward. In general, right now we have a set of risk management tools in place. The Canadian government has worked with industry to put those in place. They have worked, in many cases, to help farmers through some of the rough periods. They include such things as some of the aid that went out because of drought and the wet conditions last year.
Those tools have helped us recover from disasters. A good example would be in the grains and oilseeds sector, which is doing very well right now. For the previous six years, a number of farmers would have been out of business, if it hadn't been for the supports that are available. We'd encourage the government to maintain the current funding for business risk management programs. However, we do recognize that there will likely be some changes that need to be made, because, in some sectors, the programs aren't working as well as they could. We would encourage the finance committee to ask Agriculture and Agri-Food Canada to work with stakeholders to develop that.
Specific tax measures that could be looked at in this year's budget should focus on the transfer of farms from one generation to another. We're seeing farmers aging and some young people wanting to come forward.
We have three specific recommendations. One is regarding the non-arm's-length sale of shares under section 84.1 of the Income Tax Act, which is used when one is transferring shares in a corporation to a family member, shares that are treated differently than if one is transferring those shares to a non-family member. Because it's a family member who is concerned, you can't take full advantage of the capital gains exemption. It's interesting that if my farm weren't a corporation and I transferred it directly to the kids, I could take advantage of it. If I transferred it to a corporation that's not related to me, I could take advantage of the capital gains exemption. But if I transferred it to my children who happen to have a farm corporation, then they would not be allowed to utilize those advantages. That's one specific example.
The other recommendation is in regard to deemed proceeds or capital gains under subsection 55(2) of the Income Tax Act. It's not uncommon now for a generation to transfer a farm to several siblings, and you can take advantage of capital gains issues and tax measures there. However, if those two children were to split that farm, they couldn't do that because they're related. So there are some changes that are needed to that.
The final specific recommendation is in regards to reporting requirements. There is regulatory change T5013, which used to allow you to avoid some of the filing requirements that other groups had, if you had fewer than six partners. The regulation was changed so that now all producers must file.