You can't get enough of me, can you? I'm sorry I missed you in our meeting yesterday, Wayne.
Chair and committee members, it's a pleasure to be back again. I'm really happy to present on this bill—a bill that CFIB strongly supports. As you can imagine, we are not tax policy experts in the way that an accounting firm would be, but certainly from a small business perspective, we have data to share that supports the spirit of this legislation.
I want to make sure I also say that while we're absolutely thrilled that Larry Maguire has put forward this bill, it's also built on the back of some earlier pieces of legislation from both the Liberal Party and the NDP. I think it is that all-party spirit that has us so optimistic that perhaps finally we may see this move across the finish line. I remember I joined Emmanuel Dubourg at a press conference a couple of years ago, when the Conservatives were in power, calling on the Tories to implement this legislation. That didn't happen. Then I joined with the NDP a few years ago, with Guy Caron, to suggest the very same thing. That didn't happen either. I'm really hoping that the third time is a charm and that we see Larry's bill get across the finish line.
I provided the committee with a bit of data from CFIB—as you might expect—on succession plans for small business owners, of which this is an integral part. Please note that 72% of business owners told us they were planning to exit their business within the next 10 years. That's a huge number of small businesses that are expected to change hands in the next little while. As the population ages, we know the clock is running out.
Probably next week, we're going to release some brand new data from CFIB that looks at this from a COVID lens. We have a bit of time here, because about 43% of our members have told us they are delaying their retirement as business owners due to the impact of COVID. Essentially, the value of their businesses has plummeted in many instances. As a result, they feel they may need to be involved in the business to try to get its value back up. About 5% of business owners have told us so far that COVID will cause them to speed up their retirement plans and exit their business—sell their business—more quickly. We shared with the committee last week that there are tens of thousands of businesses—180,000, in fact—that are expected to fail before the end of this.
Members of the committee, that's the part that I want you to remember. Canada needs these businesses to successfully transition from one generation to the next if we want the jobs, the economic development and the tax revenue that comes along with it. Most business owners—81% of our members—are telling us that the reason they want to exit their business is retirement.
One story that highlights this is of a farm member we visited. The son told us he was really happy that the dad finally shared with him the books of the business and was starting to talk about and prepare for succession. The son was 65. His father, in his eighties, was now preparing him to take over the family farm.
I know some of this has to do with things over which government has little control, but there are pieces of this that government is in control of and can smooth to make sure those business successions are as successful as possible. Far too few businesses operate with a proper formal succession plan. It is a concern for us. Tax policy plays a role in this. We want to make sure that the barrier to transferring your business from one family member to the next is smooth.
Canada has an interest in this. I've spoken to thousands of business owners on succession planning over my 27 years with CFIB. One of the things I often hear, especially in rural Canada, is that they want to make sure their kids take over the business, because they have greater confidence that their kids are going to keep the business as a going concern in that community and that province than if they were to sell the business to a third party.
There's nothing wrong with selling your business to a third party. That is the primary outcome, as our data suggests, that many businesses are looking at. However, if we encourage that, one of the things I worry about is that the companies that buy these businesses may be buying them for their assets, their products or perhaps their client lists, and then are not worried about where the jobs are and where the headquarters of those businesses are.
For all small business owners, in agriculture and all other sectors of the small business population, we strongly urge the committee to do this as soon as possible. Seventy-eight percent of our members support the idea of ensuring that the transfer of a small business to the owner's children or grandchildren should be given the same tax treatment as the transfer to a third party.
In conclusion, on capital gains in general, we urge the committee to change the Income Tax Act along the lines of what's being suggested in this bill.
We'd love you to simplify it. We recommend further simplification of the lifetime capital gains exemption, LCGE, to include some assets. We'd also like to suggest that there is support for increasing the lifetime capital gains exemption to $1 million for all small businesses. It's already there for farmers and fishers, but to have that extended to all business sectors would be a further recommendation from us.
Thank you so much.