Thank you, Chair, and thank you to members of the committee for inviting us.
My name is Andre Harpe. I am a grain farmer from the Peace River country in northern Alberta. I am also chair of the Grain Growers of Canada, known as GGC. I am joined today by our executive director, Kyle Larkin.
As the national voice for Canadian grain farmers, GGC represents over 65,000 cereal, oilseed and pulse producers. Of these growers, 98% operate family farms run by fathers, mothers, sons and daughters, just like mine.
We are the backbone of Canada's agricultural sector, but we have also been challenged in recent years due to a number of issues. These include the rising cost of inputs such as fertilizers and pesticides, increased taxation, changing weather patterns, labour disruptions and challenges within our international markets. This is why we are here today to highlight our pre-budget recommendations, all of which seek to bring government on as an equal partner with grain farmers.
First, we are asking the government to reverse the capital gains tax increase on family farms for intergenerational transfers. This tax hike has targeted farmers' retirement plans, has moved the goalposts for younger farmers and, frankly, has priced out many families. While the changes to the Canadian entrepreneurs' incentive will benefit some farmers, most farmers who produce the majority of food that Canadians and the world rely on will continue to see a tax increase.
Furthermore, this added complexity introduced by the CEI, alongside the increased inclusion rate, will drive up accounting and legal expenses for all farmers. To ensure the next generation of farmers can afford to take over the family operation, we require the capital gains tax increase to be reversed.
Second, we are asking the government to exempt the on-farm use of propane and natural gas from the carbon tax. When this tax was first introduced, gas and diesel used for on-farm activities were exempt to allow farmers to remain competitive. The same rationale holds true for propane and natural gas since they are essential for grain drying, which is needed to prevent food spoilage. On my farm, I use a grain dryer, which has cost me thousands of extra dollars in carbon tax without any viable alternative available. This is why we are asking for tax fairness for all farm fuels.
Third, while we appreciate the 18-month extended interswitching pilot that began last fall, it is not long enough to receive valuable data from shippers to assess the success of the pilot. Extended interswitching is important for grain farmers as it increases competition between the monopoly railways, which improves cost, service and efficiency.
Unfortunately, farmers like me in northern Alberta, northern Saskatchewan and British Columbia are unable to access this program because of where we farm. Therefore, in addition to the 30-month extension, we are also asking for the radius to be increased from 160 kilometres to 500 kilometres and for the program to be expanded to the B.C. Peace River country.
Lastly, many grain farmers have benefited from the accelerated investment incentive since 2018. This measure has allowed farmers to write off a larger share of the cost of newly acquired equipment, such as tractors and combines, at a rate of 45% versus the original 15%. However, American farmers have been able to access 100% bonus depreciation during the same time period, with data showing that new modern equipment can increase efficiency and lower emissions. We are calling on the government to stop the phase-out and to enhance a permanent accelerated investment incentive.
As mentioned, family-run grain farms are looking for an equal partner in government to support them to remain financially viable and help them grow in the future. These four recommendations are key examples of how the government can support family farms.
Thank you again to the committee for inviting us. We'd be happy to take any questions.