Thank you.
Good afternoon, committee members.
Thank you for the opportunity to appear before you and speak about CFA's recommendations for the 2017 federal budget.
The Canadian Federation of Agriculture and its members greatly appreciate the opportunity to highlight how budget 2017 can help government and industry achieve agriculture's considerable potential.
For those who aren't familiar with the CFA, we are an umbrella organization representing more than 200 farm families who operate small businesses and work hard to benefit all Canadians by contributing significantly to the Canadian economy, and providing safe and affordable food and a clean and sustainable environment.
Canada's agrifood sector employs one in eight Canadians, with more than 275,000 jobs in primary agriculture alone. Agriculture has proven itself to be a resilient source of growth, contributing over $108 billion to Canada's GDP in 2014. With Canada's small population, vast natural resources and highly competitive producers, the industry is uniquely positioned to meet the opportunities presented by a global population of nine billion in 2050 and a domestic consumer base looking for increasingly diverse agrifood products.
Canadian farmers are eager to seize the opportunities through an ongoing industry-wide commitment to continuous improvement. In working toward these goals, CFA has identified a series of proposals for the 2017 budget in its written brief, but I'll just touch upon a few key areas today.
First, I'll outline the need to modernize provisions within the Income Tax Act to address new pressures facing family farm transfers.
Canadian agriculture is in the midst of a major transition, with the average farmer now over 54 years old and an estimated $50 billion in increasingly capital-intensive farms likely to change hands over the next decade. This poses new challenges to the continuation of family farming in Canada, a model recognized for sustainable growth, environmental stewardship, and spending within local communities.
Effective tax planning is essential to the viability of the next generation of farms, as well as to those retiring. As part of this planning, family farms continue to incorporate, while changing demographics mean farmers are unable to necessarily rely on their children to stay on the farm. These pressures also reduce the efficacy of existing provisions within the Income Tax Act that were established to enable family farm transfers.
To ensure the industry is well positioned to continue its growth, CFA recommends that the rollover provisions be amended to recognize the full breadth of family relations relied upon to maintain family farms across Canada and that family farm corporations be provided with a level playing field when transferring their businesses to the next generation, including access to the capital gains exemption, and ensuring that siblings can access the same provisions as other farm family members.
Second, I'll touch on the significant opportunities that clean technologies and innovation present for Canadian agriculture, and the support that industry requires to capitalize on them.
Canadian agriculture is already focused on building resiliency and adapting to climate change. At the same time, Canadian farms are focused on sustainability, and farmers are busy building the reporting systems to show it. As a result, Canadian producers are a target market for clean technology. Producers continue to make investments to reduce greenhouse gas emissions, improve water quality, and reduce the use of inputs through precision agriculture. However, further investment in beneficial management practices and tools to illustrate their benefits is needed, such as through environmental farm plans.
At the same time, many proven technologies are capital-intensive, and without government-backed incentives they often struggle to be seen as a profitable investment. Investments in clean technology, including tax or rebate-based incentives, are needed to make technology more accessible to farmers, capture greenhouse gases, feed the energy back into the grid, and improve other environmental outcomes.
Canadian farmers are similarly motivated to advance the national bio-economy using farm waste in order to produce renewable high-quality products. Canada has the potential to be an innovator and global leader in this area, but a national strategy, coupled with federal investments in research, commercialization, and incentives, is needed.
Finally, I'd like to discuss the considerable opportunities agriculture sees in improved international and domestic market development.
To leverage these opportunities, industry and government must invest in the development of a strategic market access vision for the sector. This would include a review of emerging market opportunities and regulatory and non-regulatory barriers to trade, and a comprehensive look at infrastructure and broader industry capacity.
One example would be labour. CFA believes that long-term plans such those as laid out in the “Agriculture and Agri-food Workforce Action Plan” are essential to addressing significant labour shortages that constrain our ability to meet long-term trade objectives. By strategically identifying how we can meet these opportunities, we can align efforts through clearly defined roles and timelines for all involved. The investments required to develop such a vision pale in comparison to the long-term benefits that would accrue from the increases in tangible market access. On that note, I'd like highlight CFA's support for the modernization of Canada's internal trade system, and to emphasize the need for continued investment and federal leadership in continuing its momentum.
Once again, I'd like to thank the chair and the committee members for your time and I look forward to answering any questions you might have.
Thank you.