Evidence of meeting #59 for Finance in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was amendments.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Philippe Dufresne  Law Clerk and Parliamentary Counsel, House of Commons
Peter Milliken  Former Speaker of the House of Commons, As an Individual
Don Boudria  As an Individual
Mary Robinson  President, Canadian Federation of Agriculture
Julie Bissonnette  President, Fédération de la relève agricole du Québec
Scott Ross  Assistant Executive Director, Canadian Federation of Agriculture

11:30 a.m.

Some hon. members

Hear, hear!

11:30 a.m.

Liberal

Rachel Bendayan Liberal Outremont, QC

This was mentioned earlier this morning, further to questions from different members. I would really like to unequivocally confirm on behalf of the government that any amendments to safeguard our tax policy or to avoid artificial tax planning in connection with Bill C-208 would not be retroactive. As stated in the press release of yesterday, new proposals would apply as of the later of either November 1, 2021, or the date of publication of the final draft legislation. I hope that clarifies matters for my friends and colleagues.

I also want to add my voice to those of the previous speakers and stress the importance of parliamentary supremacy.

So my first question is for the representatives of two organizations that are here to represent our dear farmers.

Thank you very much for joining us today.

As Parliamentary Secretary to the Minister of Small Business, Export Promotion and International Trade, I am particularly interested in the issue of intergenerational transfers.

As we all know, most farms are SMEs. The 2016 census showed that more than half of all farms are sole proprietorships, and nearly a quarter of those report as family businesses.

I feel that our government has demonstrated that we are here to support our SMEs in all sectors, including the agricultural sector, which I believe has 200,000 businesses in this country. If we look at our government's record during the pandemic, we see that it has provided $1.4 billion to the agricultural sector through our wage subsidy and $50 million, in the agricultural sector alone, for rent assistance.

There is also $5 billion in additional funding for Farm Credit Canada, $125 million for AgriRecovery to help producers with the additional costs of COVID‑19, $50 million for redistribution of unsold products, and more.

My question is about the Act to amend the Income Tax Act (transfer of a small business or family farm or fishing corporation). Now that we have clarified that this act has actually been in effect since June 30, what are the biggest issues you are facing today, from a tax perspective?

Ms. Bissonnette, you have noted that the transfers are quite complex. Could you start?

Do you have any suggestions or concerns from a tax perspective that you want to mention to the government today?

11:35 a.m.

President, Fédération de la relève agricole du Québec

Julie Bissonnette

Thank you for your question.

My statement that the farm transfers were not simple was mostly about the human and economic aspects and included the whole process in general. My statement was more along those lines.

There are a lot of barriers. Also, all farm transfers are different, so there is no magic formula. Each company has to develop its own strategy. That's more what I was talking about. Also, asset values are going up. So, the more the values go up, the more the farms are worth, and a lot of money is being transferred.

On the human side, we work with our families. It's still about bequeathing a lifetime's work, so to speak. We always say that agriculture is a way of life and a passion, so this is a big step. That's also what we were presenting.

We were hoping that at least the government would remove the tax barrier, which they have done in the last month and confirmed yesterday. The tax aspect was the most significant obstacle for us.

11:35 a.m.

Liberal

Rachel Bendayan Liberal Outremont, QC

That's great. I heard you loud and clear. Thank you, Ms. Bissonnette.

Perhaps we could go to Ms. Robinson.

July 20th, 2021 / 11:35 a.m.

President, Canadian Federation of Agriculture

Mary Robinson

I believe the question was what more could be done in regard to tax. What are the more complicated things we face in tax? Is that correct?

11:35 a.m.

Liberal

The Chair Liberal Wayne Easter

That's correct, Mary.

11:35 a.m.

President, Canadian Federation of Agriculture

Mary Robinson

Thank you, Wayne. I'm hearing feedback.

Probably what the government could do at this point in time to help farms would be.... Obviously, our big concern was this unfair intergenerational tax situation we had, which has been addressed. We now have an act. As Don has pointed out, it's no longer a bill.

Moving forward, I think what we would like to see are things like a grocer's code of conduct. We would like to see improved BRM and other measures put in place to help strengthen the family farm, so that if people want to avoid amalgamating to try to capture those economies of scale, we can better ensure the margins that farmers are able to capture.

As we've said, it's a capital-intensive investment, which means that much of our money is tied up in land, equipment and buildings. It means that we have a lot of skin in the game. In the value chain of our food system, we seem to be at the tighter end of the margins scale. If government would take a more favourable look at what it does to ensure that farms are on sure footing financially, that would ensure that the next generation would feel confident in taking on that investment of millions of dollars for most family farms.

11:35 a.m.

Liberal

The Chair Liberal Wayne Easter

We will have to end this round there and go to Mr. Ste-Marie. I will just mention for the benefit of committee members what Larry and I must know for sure, that BRM means business risk management.

Go ahead, Mr. Ste-Marie, followed by Ms. Mathyssen.

11:35 a.m.

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

Thank you, Mr. Chair.

Good morning to all the witnesses.

Thank you for your very interesting presentations.

I will begin with a comment for Ms. Bissonnette.

Thank you for your presentation. You had a question. It could even go to the senior officials this afternoon. I was delighted to hear that we already had the answer from Ms. Bendayan, who was speaking on behalf of the government. She assured the companies that will be doing family transfers that the next bill amending Bill C‑208 will not be retroactive.

I commend and thank the government for sharing this commitment with us.

Before I turn to questions, I have a comment in response to the discussions we have heard at this meeting.

Senior officials in the Department of Finance may have had concerns about the implementation of a bill, but I don't think that's at all an excuse. In the previous hour, Mr. Dufresne, the Law Clerk of the House, appeared and told us that. He knows full well, as does everyone here, that, when a bill has no implementation date, it comes into force on the day it receives royal assent.

Mr. Dufresne reminded us that the government, the Minister of Finance, the Prime Minister and everyone else in government, relies on the Department of Justice to advise them on this matter. There is no better resource than the Department of Justice for advice on how legislation works. Everyone in the government knows full well that when royal assent is received, the legislation is in force, that is how it works. Even if the government did not know that, the senior officials have no excuse and cannot say that they did not know either. The minister and the government are responsible. If they didn't know, they are like boy scouts in short pants and that's inexcusable. It is completely unacceptable.

I have one other comment. According to yesterday's Radio‑Canada article, between the first reading of Bill C‑208 and royal assent, there were 527 days, or a year and a half. At each stage, at first reading, second reading, third reading, report stage, committee and Senate, the government could have proposed amendments. If it had done its job as a government in any serious manner and if it had said that it had concerns about tax evasion, which are perfectly valid, why did it let this go on for 527 days? Then it decides to have a new bill, and we gather that it will likely be after the election. They are creating uncertainty by saying that they are going to propose their amendments. Yet they had 527 days to do so. Once again, it smacks of boy scouts in short pants. It is really sad.

My last comment before my questions is this. Yesterday, we received the news release that corrected the situation and the Parliamentary Secretary, Rachel Bendayan, spoke on behalf of the government. Phew! We saved the bill, it's in effect and it will be implemented. I am very pleased about that.

I want to commend the work of all the members of the committee. I think the fact that the committee called an emergency meeting enabled the government to make this correction. I particularly want to raise my hat off to the chair of the committee.

Thank you for this meeting, Mr. Chair. It has changed everything.

Let me proceed with the questions.

I'll start with Ms. Bissonnette.

Your presentation was excellent. You mentioned that 70% of Quebec farmers want family succession. You have a dairy farm. How much is an average dairy farm worth when you include the fields for grain and everything else? On average, what is it worth in Quebec?

11:40 a.m.

President, Fédération de la relève agricole du Québec

Julie Bissonnette

It could come to millions of dollars.

11:40 a.m.

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

Are you saying $2 million?

11:40 a.m.

President, Fédération de la relève agricole du Québec

Julie Bissonnette

I am saying it could come to millions of dollars.

11:40 a.m.

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

You are saying it's millions of dollars.

How much did it cost parents to sell their farms to their children rather than to strangers, before the legislation was passed?

11:40 a.m.

President, Fédération de la relève agricole du Québec

Julie Bissonnette

After June 29, many young people contacted me to tell me that the impact of the legislation was easily hundreds of thousands of dollars for their business, in which they will be able to reinvest the money.

11:40 a.m.

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

So, deciding to sell your farm to your children meant giving up hundreds of thousands of dollars and the passage of the Act to amend the Income Tax Act (transfer of a small business or family farm or fishing corporation) corrects this injustice.

You said that you have been pushing this issue for 15 years. In 2015, when I ran for office, this was the first issue I heard about. Farmers are well mobilized, and so are the small and medium‑sized businesses. It's really very important.

Don't stop, keep going. Let's hope that, in the end, we will get there.

11:40 a.m.

Liberal

The Chair Liberal Wayne Easter

Thank you both.

We're turning to Ms. Mathyssen, who will be followed by Mr. Berthold and Mr. Kelly on a split.

Go ahead.

11:40 a.m.

NDP

Lindsay Mathyssen NDP London—Fanshawe, ON

Thank you, Mr. Chair.

Thank you to the witnesses.

We've heard a lot of statistics. I want to ensure there are statistics about the fact that over the last decade 8,000 family farms have disappeared. The average Canadian farmer has seen their debt double since about 2000. The last statistics I could see were from 2019. That debt is about $106 billion. That's quite significant.

Could both Ms. Bissonnette and Ms. Robinson talk about how that impacts their members specifically and their plans for retirement? Certainly there has been a great deal of stress, during COVID, on those families and those small businesses. What has that additional stress caused?

I want Ms. Bissonnette to go first.

11:40 a.m.

Liberal

The Chair Liberal Wayne Easter

Go ahead, Ms. Bissonnette.

11:40 a.m.

President, Fédération de la relève agricole du Québec

Julie Bissonnette

Thank you for your question.

As I was saying, transferring a farm is generally quite a stressful time. The uncertainty of the past month has not helped either. That's why I repeat that we are very happy with last night's clarification. In terms of succession, it's mostly that—

11:45 a.m.

Liberal

The Chair Liberal Wayne Easter

If I could interrupt, Ms. Bissonnette, for a minute, we're not getting translation, or at least I'm not. Can we check the translation there?

Ms. Bissonnette, could you unplug your mike and plug it in again and see if that works? Just unplug your mike, that special mike that Parliament sent you. Okay, try it now.

11:45 a.m.

President, Fédération de la relève agricole du Québec

Julie Bissonnette

Is it working?

11:45 a.m.

Liberal

The Chair Liberal Wayne Easter

Yes, that's working. Go ahead.

11:45 a.m.

President, Fédération de la relève agricole du Québec

Julie Bissonnette

With respect to the concerns, the last month has clearly not been easy and the stress level has increased. The pandemic came on top of the droughts and the weather. Summer is always a bit more stressful for farmers. So the past month hasn't been easy, but we were happy to hear yesterday that it has been resolved. Last month, that was our concern for the next generation of farmers.

I will let Ms. Robinson continue.

11:45 a.m.

Liberal

The Chair Liberal Wayne Easter

Could we go to Ms. Robinson on the same question?

Mary.

11:45 a.m.

President, Canadian Federation of Agriculture

Mary Robinson

With regard to the stresses that people feel on farms right now, there are so many and they're so varied. The very nature of agriculture in Canada is incredibly diverse, both in the size of farm operations and in the commodities they're producing. Generally speaking, what we want to see and what we advocate for a lot at CFA is improvement to the business risk management programs so that farmers have a financial backstop, so that they don't have this overwhelming stress that when something comes along that's well beyond their control they're going to lose everything.

It's an interesting combination, and I'm sure, Mr. Chair, you could speak to this. The combination of tradition, of multiple generations, of being viewed as a steward of the land and the environment in your community creates a high-stress situation all on its own.

Just in recent years, we've seen geopolitical issues. We've seen transportation issues. We see climate issues. We see carbon tax potential. We see many things that are being downloaded to farmers. Farmers, ultimately, are price taggers. We produce commodities. Very rarely do we have an opportunity to influence the price we're being paid.

Our government needs to make sure the foundation of our food system is well shored up and is well positioned so that the next generation of family farms can come along and do an exceptional job.