House of Commons Hansard #114 of the 42nd Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was rouge.


Rouge National Urban Park ActGovernment Orders

4:50 p.m.


Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC

Madam Speaker, as the member knows, amendments are done at committee. Unfortunately, I will not have the privilege of dealing with this at committee, but hearing the concerns that we are raising today, I have faith that my colleagues will have something that is appropriately presented that will help improve the bill.

I hope there is a willingness on all sides of the House to listen to any amendments that might come forward to deal with the issues that we have raised in the debate today.

Rouge National Urban Park ActGovernment Orders

4:50 p.m.


Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB

Madam Speaker, we have heard some discussion in the House about what different stakeholders have been saying. It is worth underlining that there were representatives, two years ago when this was debated at the environment committee, who raised specific concerns about the use of the language “ecological integrity”. Local stakeholders were very concerned about people's ability to use the park and actually what is realistic.

I wonder if the member could comment more just on what the actual stakeholder response has been to some of this language.

Rouge National Urban Park ActGovernment Orders

4:50 p.m.


Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC

Madam Speaker, we have heard that there are some who look at the definition and look at Parks Canada and how it is defining “ecological integrity”. It really is appropriately applicable to some of our more remote sites, but some might say that they are not sure that something like a Stanley Park model might work a little bit more effectively than something that really restricts us in terms of what we can do and where we can go.

Rouge National Urban Park ActGovernment Orders

4:50 p.m.


Mel Arnold Conservative North Okanagan—Shuswap, BC

Madam Speaker, I would like to recognize the Minister of Environment for introducing this step in formalizing the establishment of the Rouge National Urban Park. I also recognize the work of our former Conservative government colleagues in navigating a path toward making this national park a reality.

In my background in conservation organizations, I have seen first hand the value of recognizing the value of conserving green spaces and the natural environment, and the value of the opportunity for all to experience them.

I used one word very selectively in the previous sentence, and that is the word “conserving”. I did not use the word “preserving”, which has a very different meaning. The two words sound similar but have a very different application when it comes to parks and green spaces. Conserving refers to allowing some use while retaining part of the resource in a sustainable manner, so that the resource can be there for the future. In creating conservation areas and parks, we often arrive at this type of conflict: how much we can preserve versus how much we have to conserve and how much we can use. This is often a real dilemma for policy-makers.

The challenge embodied in the wording of this bill is the inclusion of protecting ecological integrity, and the challenge it will create for policy-makers and park managers years down the road.

In my home province of British Columbia, we heard earlier today from a colleague about the impact on a massive scale of the over-application of ecological integrity in parks. When the pine beetle started to infest an area within Tweedsmuir Provincial Park, the park system was not allowed to use logging to remove the infected timber to reduce or contain the spread of the devastating beetle.

Looking back now, many see that this was an error. We have seen the loss of jobs. We have seen the loss of timber, and we are now struggling with how we keep sawmills and employment going in the province. It spread not just in the province of B.C., but now it is through Alberta and into Saskatchewan, all because we could not react within the park program.

Programs and policies without flexibility for accommodation of unforeseen scenarios prevented common sense from being applied. Now, decades later, we are still feeling the effects of those decisions. Diverse wildlife habitat has been lost to monoculture regrowth. In the end, large swaths of provinces have ended up being logged and the means of fighting the pine beetle has left huge areas of barren forest. This has resulted in no cover for ungulates and challenges to wildlife management that will span decades.

As we examine the Rouge National Urban Park and its location, on land subject to farming for over 200 years, industrial activity, and urban use, is it reasonable to expect ecological integrity to be achieved, whether it is included in the wording or not?

We have heard today of many issues that could make it impossible to achieve the full ecological integrity. If this is the case, one has to wonder what values might be traded off in attempts to achieve it. Would it be the existing agriculture? Would it be access in the dry summer months? Would it be disease spreading out of the park? What types of tradeoffs are we going to have to look at?

While fellow Canadians in the past have recognized the uniqueness of certain areas of this country, we are here today to continue to build on that legacy. Those early parks pioneers envisioned protecting areas for the benefit of future generations. I believe we are all here today working to continue that vision.

However, those early pioneers had no way of seeing how complicated parks management would become, no more than we can expect to see how complicated it will be in another 100 years.

In creating new parks, I believe we need to allow some flexibility to our future parks managers so that, as the demands on the parks change as years go by, those managers have the flexibility to adapt their management styles to meet the needs of the ecosystems and the park visitors. This brings me back to the words “conservation” and “preservation”, and I am hoping my colleagues and those listening today are getting a better understanding of the differences between these two words.

The inclusion of ecological integrity as the first priority would tie the hands of those future parks managers to focus on preservation, leaving them without the flexibility that they will need to evolve their management to create one of the goals of creating a park; that is, the conservation of existing systems and values for future generations. It is those future generations for whom I am concerned. As I noted earlier, my background is with conservation organizations, where I have seen the value of getting youth into an outdoor environment. I say “an outdoor environment” instead of “a natural environment” for a reason. The reason is that our cultures have changed because many people have never experienced the true outdoors. To place them in a natural environment does not always render the best experience, much as our limited control measures in B.C. have not led to the best experience with the pine beetles.

By adapting the natural environment for a better interactive experience, the memories and values taken home and into the future increase in value. Over time, our society has become increasingly urbanized, especially in the area near Rouge National Urban Park. Providing for full ecological integrity in this park may not be in the best interests of the park, local residents, or visitors.

While I am fully in support of the formalization of Rouge National Urban Park, I am not supportive of including, in this case, the priority of ecological integrity. In defending this position, I would like to have had the opportunity to ask my friend and colleague from Red Deer—Lacombe to point out how many species he was authorized to manage within the scope of ecological integrity in the natural parks in which he worked. I am sure his answer would have been one, humans.

Humans are the only species that parks managers can manipulate within a natural park. We as humans have made such a change to our surroundings, especially near this proposed park, that we cannot expect to tie parks managers' hands to only managing humans and not other species within the parks. They are going to need the flexibility and the opportunity to use other systems to manage without being stuck to that ecological integrity phrase. I urge the members across the House to understand this as we move forward in this debate, and I hope that will be addressed in the committee stage of this bill. Again, in my experience, we have seen bad examples of tying the hands of parks managers.

A further example would be the Gros Morne National Park in Newfoundland, where the moose were simply eating the park habitat beyond recognition. Parks managers in Gros Morne National Park resisted for years allowing hunters into the park to manage the moose populations within the park. For years, hunters and people in the park saw what was happening, but because of park policy the managers would not allow the hunting to take place. Finally, within the past decade, they have seen the error of restricting that opportunity to manage. They have allowed hunting within that national park and the park is benefiting from it.

I hope that these examples can be taken forward and understood. As we move forward on this bill, I hope to see amendments to it.

Rouge National Urban Park ActGovernment Orders

5 p.m.


Gary Anandasangaree Liberal Scarborough—Rouge Park, ON

Madam Speaker, I want to touch on the issue of ecological integrity. Every single park in Canada is enshrined with ecological integrity. It is the primary lens by which parks are managed. When we really set the footprint for urban parks in Canada, why should they not have the similar type of protection?

Based on my conversations with my constituents, as well as with many stakeholders who have worked on this issue for the last five decades, it is very clear to me that they are all looking for ecological integrity. I am confounded as to why the Conservative Party keeps bringing this up as an issue on which there should be some erosion.

Rouge National Urban Park ActGovernment Orders

5:05 p.m.


Mel Arnold Conservative North Okanagan—Shuswap, BC

Madam Speaker, I explained fairly well in my speech that it would simply tie the hands of managers and prevent them from managing or adjusting other species within the park, whether insect infestations, fire, or any other issue that may come up over the next 100 years, because that is what is looked at when creating a national park. Most national parks now were created some 100 years ago. We are going to be celebrating that next year. They did not have the social or biological issues that exist now. This is not a typical national park. This is what should be recognized. It is unique and cannot be managed under the same systems as all other national parks.

Rouge National Urban Park ActGovernment Orders

5:05 p.m.


François Choquette NDP Drummond, QC

Madam Speaker, I am pleased to rise again in the House to speak about the Rouge Park and the importance of environmental conservation in Canada.

My colleague may know that Canada is a signatory to the Convention on Biological Diversity. We must meet the Aichi targets, which involve conserving 17% of terrestrial lands and 10% of marine areas by 2020. We are not even close to reaching those targets. The Conservatives made some progress by creating a few parks.

Does my colleague believe, as I do, that the Liberal government must do much more than just improve the Rouge Park in order to achieve the objectives of the Green Budget Coalition, which is calling for the creation of six new parks? What does my colleague think of this?

Rouge National Urban Park ActGovernment Orders

5:05 p.m.


Mel Arnold Conservative North Okanagan—Shuswap, BC

Madam Speaker, the creation of protected areas is dear to my heart as well. We need natural spaces, but these do not necessarily have to be national parks. I do not think a lot of people understand what activities are restricted in national parks. There has been a significant controversy in the Okanagan area near my home, where there have been cattle grazing, hunting opportunities, berry picking, and so on for decades, centuries basically, but that is all threatened. All of those activities are threatened by the creation of a national park. There are other opportunities to protect that area for its natural attributes without doing it through a national park.

I agree that we need to create more conservation spaces, but I do not necessarily agree these all have to be done through national parks.

Rouge National Urban Park ActGovernment Orders

5:05 p.m.


Rachael Thomas Conservative Lethbridge, AB

Madam Speaker, when it comes to national parks, they are created for the benefit of people, the conservation of land, and the protection of animals. That said, when we create parks, we do so with the knowledge that they are for this generation and the next. How would the proposed change in terminology potentially impact the use of parks by future generations?

Rouge National Urban Park ActGovernment Orders

5:05 p.m.


Mel Arnold Conservative North Okanagan—Shuswap, BC

Madam Speaker, again, the hands of managers would be tied by this wording of ecological integrity. As I said earlier, previous parks were planned and established by people who wanted to protect areas that were of significant value and had specific interests. This park is in an urban area and has specific interests as well, but we need to allow managers to be flexible.

Rouge National Urban Park ActGovernment Orders

5:05 p.m.


Harold Albrecht Conservative Kitchener—Conestoga, ON

Madam Speaker, before the last election, I had the privilege to serve on environment committee as chair. At that time, we heard from many witnesses throughout the course of several meetings on Bill C-40, an act respecting the Rouge National Park. When I found out that the Liberal government was returning to this legislation, I was surprised. Bill C-40 was great legislation. Our previous Conservative government did so much for Rouge National Park which was supported by experts and members of many different environmental organizations.

In the 2011 Speech from the Throne, our Conservative government committed $143.7 million, over 10 years, to the creation of Rouge National Park. It appears to me that Bill C-18 is simply political cover by the federal Liberals for the Ontario Liberal government for not transferring the provincial portion of the lands before the 2015 election.

Bill C-18 does not include the transfer of parklands that were expropriated by the federal Liberals in the early 1970s for an airport, which has yet to be built, or the additional $26.8 million over six years and $3 million annually thereafter in funding that our Conservative government announced in 2015. The Liberals have not yet followed through with this commitment.

Provincial infrastructure Minister Chiarelli secretly demanded a $100 million payment for the land transfer, which was rejected on principle by our government. Following this, provincial Minister Duguid wrote a letter as political cover stating that the Ontario government would not transfer lands until Rouge National Urban Park was amended to ensure that the first priority of park management was ecological integrity. Parks Canada disagreed with the ecological integrity designation as it was unrealistic for an urban park.

The true environmentalist's definition of ecological integrity would include letting forests burn, letting floods run their course, and wildlife survival without human intervention. The Rouge sits alongside residential neighbourhoods, has highways, power lines, and a pipeline across various parts of it, with working farmland, a former landfill dump site, and an old auto wrecker yard within its borders. For these reasons, any attempt in Bill C-18 to define our actions as ecological integrity would be nice sounding words only.

Allow me to quote from one of the witnesses we heard from when we were studying Bill C-40 in the last Parliament. This quote is from Larry Noonan, chair of the Altona Forest Stewardship Committee. He said:

Some people have asked why the term ecological integrity is not in the act. The Canada National Parks Act states that “ecological integrity” includes “supporting processes”. As a further clarification of part of this definition, Parks Canada defines “ecosystem processes” as “the engines that make ecosystems work; e.g. fire, flooding...

Ecological integrity cannot be applied to an urban national park. We simply cannot allow fires and flooding in the Toronto, Markham, and Pickering urban environment. The Rouge National Urban Park Act cannot have this term included or there would have to be a list of exceptions to the definition which could serve to lessen its impact in the Canada National Parks Act. Instead, Bill C-40 refers to the maintenance of its native wildlife and of the health of those ecosystems.

The Rouge National Urban Park and the management plan lay out strategies for attaining the highest possible level of health for the park's ecosystems.

Furthermore, setting ecological integrity as the first priority of park management would be an opening to the interference or even the removal of farmers from the park. The former environment minister, the Hon. Leona Aglukkaq, shared with our committee that “Applying in the legislation the concept of ecological integrity as we do in national parks would make it impossible to permit the type of sustainable farming that has been taking place in the Rouge for centuries.”

Speaking more about farmers, Alan Latourelle, the former Parks Canada CEO for 13 years, also shared with our committee that “in the Rouge national urban park, a significant component is the land that we've agreed on and are working productively with the farmers. That, for example, would not be able to achieve the ecological integrity objective within that context”.

It would be a shame if we, through Bill C-18, ended the rich history of sustainable farming in Rouge Park.

Another witness we heard from in our committee meeting was Mr. Jay Reesor, a farmer in the GTA who farms within the Rouge area. Let me quote part of his testimony:

The creation of the Rouge national urban park is something very important to me, as my wife and I have lived and worked in the federal portion of the land designated to become park since 1985. In fact, my Reesor family has lived and farmed in the current park area since 1804, when they emigrated from Pennsylvania in search of good farmland and good government and settled in the Rouge area.

He goes on to say:

Productive food-producing land is a valuable natural resource, just as a Carolinian forest or wetland is a valuable natural resource. The founders of the former Rouge Park had a vision for a property, a park, that protected nature and gave no real protection or encouragement to food-producing land, but they ran into obstacles. Unable to fulfill the dream for various reasons, they came to Parks Canada as the logical next step to help them implement their vision.

I am very pleased that our park system, in their draft management plan, has shown their intention and commitment to sustainable food production in this exciting new type of park. If the federal park system doesn't intentionally protect the natural resource of productive food-producing land, who will?

The agricultural community and our farmers are some of the best environmentalists. Let me quote a few more witnesses from our committee who spoke about farming and agriculture in the Rouge.

Mr. Alan Wells, chair of the Rouge Park Alliance said:

Parks Canada has continued to recognize agriculture as an important part of the park. The work has gained the confidence of the farming community both in the park and through regional farm organizations. Parks Canada has proposed plans that reflect the need to improve the trail system in the park. Draft trail plans included in the draft management plan build on the planning work recently done by the Rouge Park Alliance. The number of volunteer hike leaders has increased significantly over the last two years to 50 in total, and there is strong support for recreational users.

Over the last 20 years, cultural heritage through the preservation of historic buildings has been neglected due to a lack of funding and commitment. Parks Canada has the mandate, experience, and resources to address this issue and has included cultural heritage in Bill C-40.

Mr. Ian Buchanan, manager, Natural Heritage and Forestry, Environmental Promotion and Protection, Regional Municipality of York, stated:

It is encouraging that Bill C-40 presents clear direction in key areas, specifically clauses 4 and 6 dealing with the park's establishment and management; recognizes the unique setting; and reflects a multi-purpose focus, including natural and cultural heritage, farming, and an emphasis on healthy ecosystems, which we feel is the right balance. Parks Canada, municipalities, and partners have demonstrated a commitment to protecting and restoring the natural environment. York Region has recently invested $6.5 million in the park, creating wetlands, grasslands, forests, and trails connecting people with nature.

From Mr. Larry Noonan, chair of the Altona Forest Stewardship Committee:

Some of these families have been there for over 150 years. Some arrived in Conestoga covered wagons. The purpose of these interviews is to preserve their stories as part of the cultural heritage and farming tradition of the Rouge watershed and the new national urban park. I am very happy to see that both the cultural heritage and the farming communities of the new park are encouraged and supported by Bill C-40.

Finally, from Mr. Ian Buchanan:

Through you, Mr. Chair, they are part of the solution. If we don't acknowledge that the farming community is the front line of environmental protection, we're missing the point. We've worked with farmers for many years, as well as many of the conservation organizations like Ontario Nature, Ducks Unlimited, and had some very significant wins, as York Region has had, through our greening strategy. Thanks for mentioning that. We've had some great successes there. We both learn and the environment wins. That is going to be an integral part of Rouge Park moving forward.

I want to highlight that first part of the quote: “If we don't acknowledge that the farming community is the front line of environmental protection, we're missing the point”.

As I said at the beginning of my speech, farmers are some of our best environmentalists. As I drive through my riding, I can attest to this fact as I look at the cover crops that have been planted where normally at this time of year we would simply have bare land with some stubble. Today when we drive through the area, we see green cover crops. These cover crops are essential to reduce erosion, help with carbon sequestration, and water retention in the soil, which leads to better soil quality by improving and increasing organic matter in the soil.

In addition to cover crops, we see that many of the farmers in my area are no longer doing deep tillage. They are not ploughing, discing, cultivating, and harrowing. Rather, they are going to a no-till application, which simply inserts the seed into the ground. The ground maintains better soil integrity, better water retention, and improved soil quality. In addition to that, because the farmers are not now passing over the land multiple times with their tractors, they are reducing their fuel consumption. This increases our ability to reduce our greenhouse gas emissions and also reduce fuel costs.

Along the streams and rivers in my riding, in almost every one, members will see a buffer zone where previously cattle or other wildlife and livestock might have had access to the streams and rivers. These buffer zones now create an area where, first of all, water runoff is filtered by the grass next to the stream. Trees are growing in the buffered area, and so the streams are being protected by the trees. The shade of those trees reduces the temperature of the water. We are seeing fish come back into these streams and an improved water quality, which not only benefits the stream and river right there but, as those of us in the Great Lakes area know, makes a great contribution to preserving our environment and improving the water quality in our Great Lakes.

I could also speak about wetland conservation, and we see that wetlands are great filters for water. They act as sponges during flood time, as they absorb that water. Carbon sequestration is a big part of not only preserving the wetlands but in many cases restoring wetlands that had previously been drained and were in crop production. They are now being returned to wetland production.

In addition to driving through my riding and seeing these great examples of good environmentalism on the part of our farmers, just recently, in October, I hosted a round table in my riding with farmers and agroforestry people to get an idea of the kinds of initiatives the farmers are taking to improve our environment. This speaks to the fact that, in addition to the work that we are doing in the Rouge Park, we know that our farmers will be co-labourers in our work of protecting our environment. If I have time at the end of my comments, I would like to read a few comments from that round table.

I would like to inform Canadians as to what Bill C-40, the previous rendition of the Rouge Park act, actually included. I think when we listen to some of the things that were included in Bill C-40, Rouge National Urban Park Act, Canadians will understand the great work that was done in producing this act, which will protect the Rouge National Urban Park.

Whereas the Rouge Valley contains some of the last remnants of the Carolinian forest in Canada, significant geological features and a combination of diverse habitats linking Lake Ontario to the Oak Ridges Moraine;

Whereas the foresight, dedication and engagement of community visionaries and various levels of government have laid the foundation for the creation of a park in the Rouge Valley, an area that is rich in natural and cultural resources and is readily accessible to the population of Canada’s largest metropolitan area;

I will stop for a moment on that area, just to point out that right at the doorstep of the GTA is an urban national park. Children who would not ordinarily have the option of perhaps visiting one of our national parks that are further afield will have the option to see, learn, touch, and feel these things that are in the national park, which would not ordinarily be accessible to them.

It goes on:

Whereas there is a unique opportunity to connect Canadians with the natural and cultural heritage of the Rouge Valley and with history of its early Aboriginal inhabitants and others who shaped its landscape; and whereas Parliament wishes to protect natural ecosystems and maintain natural wildlife in the Rouge Valley, to provide meaningful opportunities for Canadians to experience and enjoy the diverse landscapes of the Rouge Valley, to engage local communities and businesses, Aboriginal organizations and youth as well as other Canadians, to become stewards and ambassadors of the park.

We cannot overstate that part, seeing the co-operation that we have been able to achieve with the aboriginal organizations, youth, the local communities, and businesses to become stewards and ambassadors of the park, not just using the park but actually being able to promote the use of this park and its preservation. It goes on: provide a wide range of recreational, interpretive, volunteer and learning activities to attract a diverse urban population to the park, to enable youth and other visitors to connect with nature in an urban setting, to protect the natural and cultural landscapes of the park and identify its heritage values to facilitate an understanding and appreciation of the history of the region, to encourage sustainable farming practices, to support the preservation of agricultural lands in the park and celebrate the agricultural heritage of the region, and to promote the park as a place of discovery, enjoyment and learning, and as a gateway to all of Canada's national protected heritage areas.

It continues in section 4 on the establishment of the park:

Rouge National Urban Park, which is described in the schedule, has established for the purposes of protecting and presenting for current and future generations, the natural and cultural heritage of the park and its diverse landscapes, promoting a vibrant farming community and encouraging Canadians to discover and connect with their national protected heritage areas.

I think members will see so many of the examples that I have read from many of the witnesses who appeared before our committee. I could go on and read from my report on the round table that we conducted, but I do not think my time will allow me to do that. I just wanted to point out the above from Bill C-40, the bill our Conservative government enacted.

I had the privilege of sitting on the environment committee as chair, listening to these witnesses, seeing the hard work that was done, including by the former Parks Canada CEO, Alan Latourelle, and his clear recommendation not to include ecological integrity within the bill.

These are solid principles on which the Rouge Park was established. The current protections provided to Rouge National Urban Park far exceed the protections provided by the Province of Ontario, specifically in prohibiting mining, logging, hunting, and in application of the Species at Risk Act and year-round dedicated enforcement officers.

The Liberals are continuing to play games with the park, which is why Bill C-18 is nothing more than an assortment of unrelated items with the intention of appeasing Kathleen Wynne and the Ontario Liberals in providing political cover for their pre-election political attack that has used Rouge National Urban Park as a political bargaining chip.

Ecological integrity as a primary guiding principle for the park is an unrealistic measure for an urban park, which was established to introduce Canadians to nature, local culture, and agriculture, a first of its kind in Canada.

In closing, the Conservative Party stands proud about the creation of Rouge National Park, described best by Alan Latourelle as:

Presenting a unique opportunity to connect residents of the GTA to nature, while demonstrating global conservation leadership under the International Union for the Conservation of Nature's Urban Protected Areas program, and showing respect to first nations and farmers who have cared for this land for countless generations, connecting resident of the GTA to the future.

It is a beautiful, breathtaking park, a sight to behold, and I hope all members will have the opportunity to visit it.

While we will be supporting this legislation going to committee, we hope the Liberal government will listen to stakeholders such as Wayne Emmerson, chairman and CEO of York region; Glen De Baeremaeker, deputy mayor, City of Toronto, and the mayors from Markham, Richmond Hill and Pickering; the York Region Federation of Agriculture; and individual farmers like Jay Reesor; and the Toronto Zoo and others.

As the committee looks at the bill, I am hoping it will amend Bill C-18 by removing the ecological integrity portion of this legislation.

Rouge National Urban Park ActGovernment Orders

5:25 p.m.


The Deputy Speaker Conservative Bruce Stanton

The hon. member for Kitchener—Conestoga will have 10 minutes for a question and comment period when the House next returns to debate on the question before the House.

It being 5:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's Order Paper.

Income Tax ActPrivate Members' Business

November 24th, 2016 / 5:30 p.m.


Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

moved that Bill C-274, an Act to amend the Income Tax Act (transfer of small business or family farm or fishing corporation), be read the second time and referred to a committee.

Mr. Speaker, I have to admit that I am very pleased to debate this bill. It is the first time that I have had the opportunity to introduce and debate a private member's bill in the House as I was unable to do so in the last Parliament.

Bill C-274 would correct and eliminate a gross injustice concerning the transfer of our farms and SMEs. This issue is more important than ever. Demographically speaking, 76% of small business owners plan to transfer ownership of their companies so that they can retire within the next 10 years, and 50% of farm owners want to do the same thing, also within the next 10 years.

The injustice that this bill is intended to remedy is that, if someone has a small business, a farm, or even a fishing boat and wants to sell it to his or her children, in a corporate structure, the seller, who is the owner of the small business or family farm in question, will pay much more income tax than if he or she decided to sell to a stranger.

In a very large number of cases, that means choosing between having a larger pension fund by selling to a stranger—since a pension fund is what business owners get when they sell their business—and having a smaller pension fund by selling to one’s children. The difference can be extremely large. If we ignore the tax planning that such a transaction can entail, for the sale of a farm worth $10 million, which, with all the assets, is quite often a reasonable price, selling to a child can cost up to $1.2 million more in income tax than if the farm is sold to a stranger. In the case of the sale of a business worth $1 million, the difference can be more than $300,000 in income tax.

The reason is very simple: if people want to sell to their children, to someone related to them, the difference between the sale price and the original price at the time of purchase is considered a dividend under the Income Tax Act. Consequently, it is treated like a dividend for tax purposes. Across the country, dividends are taxed at about 35% on average.

If business owners sell to someone who is not a family member, in other words, an unrelated person, a stranger, the difference between the sale price and the original price at the time of purchase is considered a capital gain. In that case, there is a lifetime exemption of about $825,000 for a business and about $1 million for a farm or a fishing boat. The remaining capital gain is taxed at about 25% on average. This explains the difference between selling to a stranger and selling to a child.

Obviously, it is unfair. In every constituency, we have business owners. People who want to sell their small business, their family farm, or their fishing boat in the Atlantic provinces, for example, are faced with an extremely heart-rending choice. Will they agree to sell their business to a family member and have $100,000, $125,000, or $150,000 less in their pension fund because they want their child to succeed them, because they want someone in the family to take over a business that they built with their own hands? They may not have the opportunity to do so if their pension fund is not large enough. Unfortunately, instead of selling to their child, who would be willing to take over, they have to consider selling to a stranger.

My bill seeks to correct this injustice. I admit that the bill is somewhat self-serving because this has been an ongoing problem in my constituency. In fact, the bill was prepared in co-operation with the farmers and SMEs in my riding. Rimouski-Neigette—Témiscouata—Les Basques is in the Lower St. Lawrence region, and 12% of the region’s economy is dependent on agriculture.

We have many family farms, especially dairy farms, as well as some maple sugar operations. In my constituency, it is not big companies that drive the economy. It is small businesses.

People, particularly those in the farming community, have been telling me about this situation since I first took office in 2011. They are being forced to choose between selling to a child at a tax loss and selling to a stranger.

The situation has become even more worrisome since there has been talk of land speculation. Certain people want to buy farmland to speculate on its value.

Such people have an advantage right from the start, since their offer means that the person selling the company or farm will have a lot less income tax to pay. The current situation is unfair.

My bill is designed to resolve the situation so that the sale of a family business or farm to a child will be treated as a capital gain, the same as if it were sold to a stranger.

There is no real reason to oppose such a measure. There are three reasons why such a measure may have been opposed in the past. First, this type of measure could open the door to aggressive tax avoidance, which is why things are the way they are now. However, my bill eliminates that possibility by requiring the buyer to retain his shares for a minimum of five years, except in case of death. People who retain their shares for five years do so because the family transfer was genuine and not because they were trying to work the system to avoid paying income tax.

The second reason why such a measure may have been opposed in the past is the argument that only the richest farmers or entrepreneurs would benefit from the measure. Once again, that is not the case with my bill because it deals only with transactions of $15 million or less. All transactions over $15 million, like those involving big farms or companies, are excluded from the terms of Bill C-274.

The third reason why such a measure could have been opposed, the last one I can think of, is the cost of the bill. Obviously, there will be a cost in lost revenue for the government. However, that cost is estimated not in the hundreds of millions of dollars, but between $75 million and $90 million. I know that different figures are being advanced, particularly by the finance department, but mine have been corroborated by many tax experts. The reason why we are talking about $75 million to $90 million is that, at present, all of this potential income tax paid by people who are selling small businesses or family farms is reduced through tax planning.

I can back up these figures with the following facts. Quebec, which has its own income taxation system, identified the same problem. It corrected it in its 2015 budget, and the correction has been implemented since March 2016. Its approach to fixing this problem is somewhat different than mine, but ultimately, Quebec estimates that eliminating this injustice will cost it some $15 million in lost revenue.

If Quebec loses $15 million, I think it is quite plausible that the lost revenue at the federal level would be around $75 million to $90 million.

This flagrant injustice has to be corrected. Speaking of injustice, imagine for a moment if the situation were reversed. Imagine if, currently, the rules for selling to a stranger and selling to one's child were the same, and then imagine if a member tabled a bill seeking to make selling to a stranger more appealing, would the House find that acceptable? Would it pass such a bill? Of course not; the question answers itself.

I would like to point out that I am not the only person in the House to note the problem. From what I understand, I should have the support of a great many, if not all, of the opposition members. I am eager to hear the speeches.

Let us not forget that, in June 2015, before the last election, the Liberal member for Bourassa tabled Bill C-691, which sought to correct this injustice regarding SMEs. My bill, at least so far as the SME component is concerned, was modelled on his bill as well as on that of my colleague from Berthier—Maskinongé, who drafted a number of clauses for farms and for fishing companies. My colleague from Joliette at the time also drafted a section on transactions between siblings.

My Liberal colleague at the time acknowledged the problem, and so did the government of Quebec, which then corrected it. I expect the hon. members to consider all of the small businesses and family farms in their ridings. I would also like members representing coastal constituencies to consider the impact this might have on fishing companies.

We are talking about small businesses and people who have worked all their lives to try and earn a living, people who, often, found themselves having to get their family business up and running again, as well as those who created it from scratch and now want it to stay in the family.

What this government has always been telling these Canadians is that they have to suffer this injustice when they sell their business to their children. In my opinion, that is totally unfair. Allow me to explain.

My colleague from Pierre-Boucher—Les Patriotes—Verchères had tried to table a bill in the wake of a situation that occurred in his riding and that made the headlines in May. Christian Tremblay, of Armoires Tremblay, in Saint-Mathieu-de-Beloeil, wanted to sell his company to his son Patrick, a company worth $1.7 million.

Imagine his surprise when he found out that, if he sold it to his son rather than to a stranger, he would have to pay $100,000 more in income tax. He considers the situation quite unfair. Will he sell to his son and make $100,000 less on a $1.7-million sale, or will he sell to a stranger so that he can keep that money in his account? The issue is receiving media attention, and thousands of new cases are bound to come up, at a growing rate, because of the demographic shift we will be going through over the next 10 years.

I would also like to talk about a problem that my bill will remedy, particularly in the regions. I would say that my bill may have greater importance in regions such as mine than it might have in major urban centres, because we are facing an exodus of young people.

In my constituency, young people are leaving the region for lack of employment opportunities; they go to school in urban centres, never to return again.

My bill will not fully remedy this situation. However, it will give our young people one more reason to stay in the region by giving them a better chance of acquiring the family business. It is something I hear about all the time in Rimouski-Neigette, Témiscouata and Les Basques, and I know that MPs from the regions have observed and heard the same thing.

I have covered a lot of kilometres in Canada promoting my bill. For two weeks last summer, I toured the Atlantic provinces talking to chambers of commerce, farming organizations and fishing organizations, to tell them about my bill, obviously, and find out if they would like to support it. In large part, they said yes.

I did the same thing in some parts of Quebec and Saskatchewan not long ago, and I will continue doing so until we vote on the bill at second reading. I think it is working, because I have enjoyed extraordinary support.

I organized a news conference when I introduced my bill last May. At my side was Dan Kelly, president of the Canadian Federation of Independent Business, who supports this bill.

I also have the support of the major chambers of commerce, including the Fédération des chambres de commerce du Québec, the metropolitan Montreal chamber of commerce, and different regional chambers in my riding and my region, as well as all over Quebec. Furthermore I have the support of the Canadian Federation of Agriculture, the Union des producteurs agricoles, the UPA, and other agricultural organizations all over the country. Finally, I have the support of fishers’ organizations, including the Nova Scotia Fish Packers Association, and I will have others as well. I will not abandon this fight.

I hope to have the support of the members of the House, who will see that this is not a partisan issue, but one that affects each of their ridings all over the country. In my view, it is a victory for common sense to vote in favour of this bill and so bring about tax fairness.

My bill rules out any possibility of fiscal abuse. It rules out the possibility that it will be disproportionately costly for the government, and it ensures that the richest owners or farmers are not going to be the ones to benefit.

Hence there is no reason to vote against this bill. I am eager to hear my colleagues on debate, and I hope to have their support so that this bill can be referred to the Standing Committee on Finance for second reading.

Income Tax ActPrivate Members' Business

5:45 p.m.

Saint-Maurice—Champlain Québec


François-Philippe Champagne LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, first of all I thank my hon. colleague for his initiative. I have huge respect for him. He knows that, because he sits with us on the Standing Committee on Finance, and he always makes interesting arguments in the House.

However, I have to disagree with him on this occasion, because the greatest injustice that could be done today would be to promote tax avoidance in any way.

Given the figures he has just put forward, I would like my colleague on the other side of the House to explain how he arrived at an amount of $10 million or $15 million, when Finance Canada has estimated the opportunities for tax evasion in the first and subsequent years at over $800 million.

Income Tax ActPrivate Members' Business

5:45 p.m.


Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, I too have great respect for my hon. colleague.

I am not talking about $10 million to $15 million, but rather about $75 million to $90 million. It is Quebec that will have to pay $15 million because of the changes it has made.

My bill eliminates the possibility of tax avoidance thanks to two measures. The first requires the buyer to retain the shares for five years. The Canada Revenue Agency was afraid that, without such a clause, shares would pass from one family member to another. This clause of my bill will make that impossible.

The second clause requires the seller and the buyer to provide an affidavit approved by the Canada Revenue Agency, to ensure that this is in fact a family transfer.

With regard to the estimate from the finance department, honestly, I have never heard of an estimate so high. It makes absolutely no sense. My estimate comes from various tax experts including, for one, Éric Dufour from Grant Thornton.

I recommend that my colleague go and speak to him, since he does not live too far away. He is a great specialist on the family transfer of businesses in Quebec. He estimates that total lost revenue will be between $75 million and $90 million. There will be no tax avoidance.

Income Tax ActPrivate Members' Business

5:45 p.m.


Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC

Mr. Speaker, I support my colleague’s bill.

As I am myself a small business owner who has also gone through a family transfer, I know that it is a very complex matter. It makes no sense to favour a stranger ahead of one’s own family.

As a small business owner, I would like to know what will happen at the time of my death. I have had to take out insurance to pay the taxes that will be applied to my estate. Since my children will have to pay a huge amount of income tax when they inherit the business, I am obliged to take out insurance.

Will this bill cover this aspect as well?

Income Tax ActPrivate Members' Business

5:45 p.m.


Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, I am pleased that my colleague recognizes the complexity, because the tax law is complex indeed.

Being an economist and not a tax expert, I do not have a specific answer to this question. I do not believe that will be the case, but all the same I have included in my bill a clause to exempt the estate from this rule in the event of death of a buyer who still holds his shares so as to not allow for tax avoidance. If he sells his shares before five years are up, he will be obliged to retroactively pay the income tax that should have been paid. If he dies, however, the estate will not have to do this, for reasons that are very obvious.

With this clause I have attempted to reassure people who might want to make a family transfer by telling them that they would not get hit, by pure accident, with a tax bill that is too high because of an early death.

Income Tax ActPrivate Members' Business

5:45 p.m.


François Choquette NDP Drummond, QC

Mr. Speaker, I thank and congratulate my hon. colleague from Rimouski-Neigette—Témiscouata—Les Basques for his excellent work.

He has done a tour through my constituency of Drummond. He met there with representatives of the chamber of commerce and numerous farmers concerned by this issue. There is indeed a problem of unfairness. It does not make sense to get more money by selling one’s business to a stranger than by selling to a family member.

Could my colleague talk about this injustice and explain how this bill will correct it?

Income Tax ActPrivate Members' Business

5:50 p.m.


Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, of course it remedies this injustice. Indeed, it is for that reason that I wonder why the Parliamentary Secretary opposes it.

I have no idea where he got $800 million. It exceeds all the estimates made by various tax experts. In fact, the experts themselves feel that the figures they heard before, $200 million or $250 million, have been greatly exaggerated. Now, we are hearing one that is four times higher.

Instead of relying solely on figures from the Department of Finance, the Parliamentary Secretary should speak to the experts at Mallette and Raymond Chabot Grant Thornton, and to tax experts in the rest of the country, because they are not hearing the same thing. They have been studying the issue and sounding the alarm for a long time.

Eventually, the House will have to make an extremely important decision. Are we going to rely on what our own farmers and businesspeople are telling us or on hypothetical scenarios that are presented by the government and whose source is unknown?

Income Tax ActPrivate Members' Business

5:50 p.m.

Saint-Maurice—Champlain Québec


François-Philippe Champagne LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, before I begin, I would like to thank my colleague once again for raising this important issue.

I can assure him that we are listening to Canadians. I meet with people every day. I have met with accounting firms and tax firms. We understand this issue, but the most important thing we have to do, as a government, is to understand that the greatest injustice we could do would be to introduce new tax loopholes in Canada. The $800 million figure is the figure provided by the Department of Finance, which has studied this issue at least as thoroughly as my colleague on the other side of the House. The $800 million figure is just the beginning; we expect it to be higher in subsequent years.

I am rising in the House to speak to my colleague’s bill, Bill C-274. The stated objective of this bill, to facilitate the transfer of family businesses to future generations in a family, seems commendable. It is the statement of principle by my colleague across the aisle. His proposed approach is to amend two long-standing anti-avoidance rules in the Income Tax Act. Those two measures have been in the Canadian tax code for a long time.

I am so pleased to be here this evening to discuss the repercussions that these fiscal changes may have. We often talk about unexpected consequences. My colleague's principle is worthy, but we have to take a close look at the measures themselves and really understand the fiscal consequences this could have for the country. I am sure all members of the House will agree that the intention behind this bill is good, and I want to go on the record as saying that my colleague's intention is very good. There is no doubt about that. Many of us are from rural parts of Quebec and Canada. We understand how things are for our farmers and entrepreneurs. I represent Shawinigan, which is, in a way, the beating heart of entrepreneurship in Quebec. We know all about entrepreneurship. We all come from places where small businesses can prosper, and we all want a fair tax system for all Canadians.

However, when weighing the merits of this bill, it is important to consider all the potential consequences of passing it. We must not lose sight of the fact that the tax rules that Bill C-274 proposes to amend exist for a reason, and that is to prevent people from engaging in inappropriate tax avoidance in Canada. Let us be clear about what Bill C-274 is proposing, and that is to soften the rules designed to prevent tax avoidance in Canada.

Let me explain. The proposed changes would dilute the anti-avoidance rules in sections 55 and 84.1 of the Income Tax Act. To help my colleagues fully understand what that means, let us first look at section 55 of the Income Tax Act. As currently worded, section 55 of the act applies to corporations that seek to inappropriately reduce capital gains by paying tax-free dividends between corporations. In short, the anti-avoidance rules consider such dividends to be a capital gain.

Two exemptions to the anti-avoidance rule authorize business restructuring by allowing company shareholders to split company shares between them, while deferring taxes. When those exemptions apply, any dividend paid between companies in the context of restructuring is not considered a capital gain.

The first exemption applies to the restructuring of related corporations, and the second applies to all corporate restructurings. Bill C-274 would broaden that first exemption, which we can call the related corporations exemption, so that it applies to brothers and sisters.

Spouses, as well as parents and their children, are eligible for this exemption because it is presumed that they have shared economic interests. However, brothers and sisters are considered to have separate and independent economic interests and are therefore not eligible for the related corporations exemption. That is consistent with other tax rules. For example, a family farm or fishing corporation cannot be transferred among brothers and sisters on a tax-deferred basis.

That being said, although brothers and sisters cannot restructure their participation in a corporation on a tax-deferred basis under the related corporations exemption, they can do it under the second exemption I mentioned earlier, which applies to all corporate restructuring. It is called the “butterfly exemption”.

Now the question is why siblings and their companies would want to have access to the first exemption if they can already achieve the same thing through the second exemption. The answer is that the conditions are less rigorous under the first exemption. The conditions are less rigorous because the companies are linked and are considered part of the same economic group at the time of restructuring. As a result, assets can be transferred on a tax deferred basis within a group of related companies regardless of the composition of assets.

Under the second exemption, known as the “butterfly exemption”, one condition requires a proportional distribution of the various types of assets transferred. The goal of this condition is to prevent tax avoidance.

By way of illustration, I would return to the example my colleague used of three siblings who each own one-third of a family farm corporation. Those siblings could reorganize the company's assets by transferring, on a tax deferred basis, those assets to their individual farm corporations by transferring their proportionate share of each type of asset from the family farm corporation.

There are fewer tax avoidance opportunities under the butterfly exemption because of the requirement that each of the brothers’ and sisters’ corporations must receive its proportional share of the assets of the corporation being restructured. If the proposed amendment to section 55 were passed, as my colleague suggests, the siblings could undertake a business restructuring in which the dividends paid between their corporations would not be treated as capital gains. The consequence of that would be to create new opportunities for tax avoidance in Canada.

I would also like to point out that Bill C-15, which received royal assent in June 2016, included an amendment that tightened the anti-avoidance rule set out in section 55, a rule that Bill C-274 would loosen. Consequently, if Bill C-274 were passed into law, we would be sending a message that conflicts with what Parliament recently decided concerning this particular provision.

I would now like to say a few words about the other anti-avoidance rule that Bill C-274 would loosen, the rule set out in section 84.1 of the Income Tax Act. This anti-avoidance rule may apply when an individual sells shares of one corporation to another corporation that is related to the individual.

For example, an individual might sell shares to a corporation owned by his child or grandchild. In such a case, the proceeds of the sale received by the seller may be considered, in certain circumstances, to be a taxable dividend instead of a capital gain, which is taxed at a lower rate or even exempt from tax if the lifetime capital gains exemption is available to the individual.

Bill C-274 would limit the application of the anti-avoidance rule by excluding the sale of shares of a corporation owned by an individual to corporations controlled by his children and grandchildren. However, that would facilitate the conversion of dividends into capital gains that are taxed at a lower rate or tax exempt. Such conversions of corporate dividends into capital gains taxed at a lower rate could be made as often as the managing owner wants to extract the corporation’s surpluses with tax deferral.

Significant tax planning would occur if Bill C-274 were passed. For example, a high-income shareholder could reduce his income tax by $17,500 for each $100,000 in business profits.

Another important point to consider is the fact that nothing is stopping a parent from selling shares of his family corporation directly to his child or grandchild and claiming the lifetime capital gains exemption on the capital gains arising from the transaction.

In closing, I think that the most important thing to say today is that nothing in Canada’s Income Tax Act prevents corporate transfers. My colleague’s proposal would create opportunities for tax avoidance.

The government listened to Canadians, and then it pledged to do everything in its power to make tax fairness a reality in Canada.

Income Tax ActPrivate Members' Business

6 p.m.


Luc Berthold Conservative Mégantic—L'Érable, QC

Mr. Speaker, I am not an economist, a tax expert, or a member of the Standing Committee on Finance. I am, however, a regionalist, and I have to say that this bill was good news for people in the regions and those in my riding who want to benefit from everything they have created over the years and see it last. That is the focus of my remarks this evening.

People who have spent 40 years building a business by the sweat of their brow want someone to pass the torch to when they take their well-deserved retirement. Everyone knows that farming is very hard work. Having a family member take over the business is tremendously satisfying because that makes it highly likely that the business will retain the same values and philosophy. Plus, the young people who take over can inject fresh ideas.

At this time, someone who owns a small business, a family farm or family fishing business, who wants to retire and hand over his or her business to a sibling or family member must pay more tax than if he or she sells it to someone with no family ties. I want to repeat this. Right now, someone who wants to retire and hand over his or her business to a sibling pays more tax than if he or she sells it to a buyer with no family ties whatsoever.

Despite the finance minister's fine speeches, when you live in the regions, this matters. These rules have been identified as one of the big problems associated with family succession in these kinds of businesses. Business owners might be less inclined to sell their business to family members, understandably, and this makes them more likely to sell to strangers.

The bill before us is meant to solve part of the problem. We need to make sure that businesses are sold to local people because that is what ensures the development of our local communities. Although this bill meets most of those objectives, there are a few points that I have to wonder about. I will address those throughout my intervention.

Let us talk about the problems that the next generation of farmers is facing. The statistics on the transfer of farms are worrisome and significant. Half of all farm transfers fail. The failure rate is so high because young people who want to take over a family farm sadly face many obstacles.

In Quebec, for example, the farming population is ageing quickly. An estimated 40% of farmers will have left farming between 2014 and 2024. If the number of farms decreases, the number of transferors increases, and the farms continue to grow, then the viability of business transfers decreases and young people will have less access to farm capital.

The president of the Canadian Federation of Agriculture says he believes that everyone realizes that a large number of farm assets are going to be transferred over the next 15 to 20 years and that we must do everything we can to recognize that farms today are different than they were 30 years ago. He also believes that we must reduce tax liabilities so that the money is used to ensure that the farms that are transferred remain as viable as possible.

A farmer in my riding, Michel Couture from Ferme Coupar in Thetford Mines, said last week in the Courrier Frontenac newspaper that many farmers are the last generation that are going to operate the farm and that, considering the current situation in farming, many will abandon production. He added that Quebec is losing at least 2% of its farmers every year.

Farms cost a lot of money, buying one is extremely expensive. Thus, young farmers seeking to acquire a farm have to take on a partner. Let us imagine a young farmer who is an only child and who would like to buy the family farm upon his parents' retirement. What can he do but find a partner? Who will he go into business with if he does not want to pay more taxes?

The size of farms and the family model have changed a lot. It is no longer the 1980s or the 1990s. Today, family farms are full-fledged businesses. It is not unusual for two, three or even four people to be in charge. For example, the owner of Ferme Coupar, which I spoke about earlier, has made many investments over the past few years. Three or four people work on the farm. In 2014, the owner modernized the operation and streamlined his work methods, which were about 50 years old.

How much did it cost him? It cost $1.4 million. On the national scale, it is a small regional business. However, for a small farm in Thetford Mines, $1.4 million is a major investment, especially when one has to pay out of pocket. Then there are the concerns about the agricultural sector.

I would like to remind members that the issue of diafiltered milk has not yet been resolved. We do not really know kind of compensation will be offered for the European trade deal. We had come up with a good plan. Unfortunately, this plan will now help farms modernize their equipment and maybe give them $5,000 a year even though the real cost of modernization is $1.4 million. We are not going to help dairy producers with just $5,000. But that is another issue. Sometimes we take the opportunities that present themselves to send a message. That is what I just did.

The family model has changed. There are not many traditional families left consisting of a father, a mother, and their children. Times have changed and there are not many families with 14 or 15 people. We have to adapt.

Bearing all of that in mind, I think that the bill needs clarification, especially on the definition of family members. Ron Bonnett, president of the Canadian Federation of Agriculture, said that the law should be amended to broaden the definition of family members to reflect very large farming operations that involve more family members.

Is that useful? I do not know. I said at the beginning that I am neither a tax expert nor an economist, but a regionalist. If these changes can help the farms in our regions, why not consider them?

What is a family member? One's child? The child of one's spouse? A spouse? A brother, sister, niece or nephew? We need to dig into these questions because the definition of the family is changing. Our tax rules have to keep pace.

This is an issue that affects businesses in other sectors too. Earlier, one of my colleagues, a business owner himself, talked about problems with transferring businesses. The Association des marchands dépanneurs et épiciers du Québec has also expressed frustration with the situation, particularly because it can be hard to find new owners, it says. The association's director, Yves Servais, said:

We have many business owners who have reached an age where they would like to pass down their business to their children, who are interested in taking over. They should not be fiscally disadvantaged. I find the current rules unfair. They do not in any way encourage people to hold on to their family business.

Dan Kelly from the Canadian Federation of Independent Business says that many small business members report that current tax rules often discourage them from passing on their firm to their children and encourage selling to a stranger.

It is important to make it easier to transfer businesses to the next generation in our regions. In our regions, a farm is a small business that ensures the survival of villages, the corner store, the tractor dealer, the grocery store, and the restaurant. That is how important farming and farmers truly are.

If we allow young people to leave by not helping them take over the family business, it will all disappear. We need to look at the bigger picture. It is not just the farm that disappears, but the entire village and community. If all the small villages in Thetford Mines or Plessisville disappear, then the main town will suffer.

The principle of the bill speaks to us because we believe that the government must not increase the tax burden on families and business owners. On the contrary, it must put in place measures to encourage entrepreneurship. We also believe in entrepreneurship. The economic development of the regions is important to us.

I have a few questions left for the hon. member about the notion of family member. However, I am sure that he will be prepared to answer those questions if the House allows the bill to get to committee stage.

So many questions that we would be pleased to ask our colleague, questions that we will ask in the interest of our small businesses, family farms, and fishing corporations.

Income Tax ActPrivate Members' Business

6:10 p.m.


Ruth Ellen Brosseau NDP Berthier—Maskinongé, QC

Mr. Speaker, today, I have the great pleasure of taking part in the debate on the bill introduced by my colleague from Rimouski-Neigette—Témiscouata—Les Basques. First of all, I want to thank my colleague for his work on this bill, his commitment, his consultations, and for listening. This is truly a bill that will improve Canadians' quality of life.

I have to admit that I was truly disappointed with the speech by my colleague from Saint-Maurice—Champlain. I represent the riding of Berthier—Maskinongé and part of the regional municipality of Maskinongé is located in Mauricie.

My colleague from Shawinigan represents a very rural area that has hundreds of SMEs, and I know that this bill will improve the economic situation of the regions. It is really frustrating when members pull figures out of thin air, maybe out of their own pockets. I believe that everyone agrees with the principle of this bill. I hope that it will be referred to committee so we can better understand where these figures come from.

I would like to point out that this bill has widespread support from all across the country. I believe it is also important to talk about this bill in my role as agriculture and agri-food critic. I am a member of the standing committee, and we are currently studying the next policy framework. Earlier today, in fact, officials were explaining to us once again how hard it is to find people to take over. It is not easy. The price of land is going up, and access to capital is difficult, so a bill like this one is a step in the right direction.

I should explain a little about the situation facing family farms in Canada. Over the past 10 years, we have lost 8,000 family farms. It is clear that this phenomenon is far from over, and it is important that we tackle the problem head on. There are a number of things we could do, and one of them is to make it easier to transfer farms between family members.

We also know that we have an aging population, especially in the regions. The demand for people to take over these businesses is only going to increase over the next few years. Overall, we are talking about $50 billion in farm assets that will be transferred between 2016 and 2026. Therefore, this bill is very important to the farming community.

At present, farmers look at their farms as their pension fund, and as much as they would love to transfer them to a family member, it is much more advantageous to sell to a stranger than someone who is part of the family. It is really sad, and we need to correct this injustice.

Let us imagine a farm worth $10 million. That farm would be worth $1.25 million more to the farmer after tax if he sells it to a stranger rather than a member of his own family. Unfortunately, sometimes that is the choice that has to be made. Farmers have to sell to strangers instead of passing the business down from one generation to the next, because the tax rules are unfair and completely unfavourable.

The problem with high land prices is that unrelated investors often have more interest in the land itself rather than farming it. Many farmers have to face really tough choices because of this. They have to choose between their hard-earned retirement and keeping production in the family.

Let us not forget that other factors also contribute to the challenges facing our family farms. My Conservative colleague mentioned this. We can talk about the government's role in border control, the government's failure to act on the diafiltered milk issue, and the completely unfair compensation for dairy farmers and processors under CETA. That is the situation facing our farmers and artisanal cheese producers in the regions. Things are really tough.

On top of that, in other agricultural sectors, farmers are really worried about the labour shortage. As we know, in the last budget, the government allocated very little money to agriculture.

All of the measures I listed that are designed to support supply management are really in the government's hands, but it seems disinclined to act or to protect it.

As the member for Berthier—Maskinongé, a rural riding, I understand how important this bill is to the people I represent.

I would like to briefly discuss the importance of small businesses to the regions. As I said earlier, small businesses are responsible for 80% of job creation in Canada. In Quebec, and in Canada as a whole, 98% of all businesses are small and medium-sized businesses.

The NDP believes we must do everything we can to ensure that businesses operate under the best possible conditions to stay competitive in a constantly changing market. The NDP will fight to protect our jobs and our family businesses.

Small businesses are the economic heart of our regions. We all have a favourite restaurant or corner store or a salon where we like to get our hair cut, and we have to support these businesses and encourage them. This is a step in the right direction. We are proud of it. We were all elected to try to introduce good legislative change.

I believe the situation in Berthier—Maskinongé is like that in my colleagues' ridings.

Bill C-274 will improve things. It is a step in the right direction. However, let us not forget that there are other areas we must improve in order to protect the regions. For example, the government promised to lower taxes from 11% to 9%. That is a broken promise. Let us not forget how important it is to develop high speed internet in the regions. We must support our family businesses and the government has to ensure that we have all the tools we need in the next strategic plan.

Our bill is widely supported. I know that my colleague already mentioned it, but there is a list of supporters two or three pages long.

I would like to read a quote by the president of the Canadian Federation of Agriculture:

Simply put, if taxation barriers are not addressed, we will see fewer and fewer family farms in Canada. We support [the commitment by the hon. member for Rimouski-Neigette—Témiscouata—Les Basques and his colleague] to addressing these tax burdens that could cause a significant administrative burden [and] cost...

The bill also has the support of the Association des marchands dépanneurs et épiciers du Québec.

It is unfair. Everyone knows there is work to be done. I think that we have had a good debate so far. However, it is important to ensure that this bill gets to committee. We must have the figures and know where they come from and we must be sure to present something that is going to improve the quality of life for the people living in rural areas who support our SMEs. This bill will really change things.

We hope to have the support of the House and to at least be able to refer this bill to committee. This bill will really change things for Canadians across the country.

Income Tax ActPrivate Members' Business

6:20 p.m.


The Deputy Speaker Conservative Bruce Stanton

Before we go to resuming debate and the hon. parliamentary secretary to the government House leader, I will just let him know that there are only about eight and a half minutes remaining in the time provided for private members' business. If he needs his full 10 minutes, of course he will have the remaining time when the House next takes up debate on the question.

The hon. parliamentary secretary to the government House leader.

Income Tax ActPrivate Members' Business

6:20 p.m.

Winnipeg North Manitoba


Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, it is with pleasure I rise today to address the private member's bill, Bill C-274.

In looking at the bill it is important that we recognize that what we are talking about is the transfer of money among family. When we talk about our farmers, small farms, and entrepreneurs, this is something that we are very sympathetic to. I do not necessarily agree with the manner in which the New Democratic member has chosen to try to implement something that most if not all members are very sympathetic to, that being the plight of our small farms and rural communities. There is very much a concerned attitude.

I know within our caucus we have a rural caucus that spends a great deal of time trying to address the many different issues that our rural communities, in particular farmers, are having to deal with. It is a wide spectrum of issues. It is important that we recognize that there is the lifetime capital gains exemption on resulting capital when, let us say, a parent transfers property over to a child. There are already today things in place that at least in part deal with what the member is hoping to achieve.

It is important that we recognize that Bill C-274 would weaken two long-standing anti-avoidance rules, something that the Parliamentary Secretary to the Minister of Finance spent a great deal of time going over. It is very technical. I will avoid that because I believe that he covered it exceptionally well. I would also point out additionally that the bill would provide new opportunities for significant tax avoidance that would benefit high-net-worth individuals and result in the erosion of the tax base. We should all be somewhat concerned about that.

At times, we hear from members of this House, whether within our caucus or even from the New Democratic benches, more often than from the Conservative benches, about the issue of tax avoidance. We have a very proactive Minister of National Revenue who is constantly looking at ways to ensure that Canadians are indeed paying their fair share and looking at ways to close loopholes. Tax avoidance in Canada is a very serious issue. It is an issue that this government takes very seriously. If we can deal with that issue, it allows us to reshuffle that money in a more positive way, ensuring that there is a fairer sense of the way in which taxes are applied.

This weakening undermines the government's expressed intent to ensure that all Canadians pay their fair share of taxes, which ensures that middle-class Canadians have access to the government services that they truly deserve.

It is also important for us to recognize that this bill would send conflicting policy messages, given that we tightened one of the anti-avoidance rules that Bill C-274 proposes to relax, through the first budget implementation act. There is a contradiction there and we would suggest that the budget implementation is the best way to go because it is about tax fairness.

Again, I want to be clear that nothing currently prevents parents from selling the family company directly to their child and claiming the lifetime capital gains exemption on the resulting capital gain. That is a very important point to emphasize.

The proposal brought forward by the New Democratic member could easily be misused by corporations looking for tax-planning opportunities. It would cost the Treasury Board an estimated $800 million a year, a number that would significantly increase in later years. Tax fairness, once again, is one of our core beliefs. Here as a government today, we have had member after member stand in this chamber and talk about the issue of tax fairness. I, for one, have mentioned it on numerous occasions and, no doubt, in the months and years ahead, we will continue to raise the issue of tax fairness, because it is indeed a part of our core beliefs.

No doubt, in the months and years ahead, we will continue to raise the issue of tax fairness, because it is part of our core belief. In that vein, we are currently undergoing a review of all tax expenditures to ensure that they are fair, efficient, and fiscally responsible.

I can assure members that we are currently engaged in pre-budget consultations. We will carefully examine the issue of family transfers in the context of fairness.

I would suggest that we would find it very challenging to find a minister of finance who has gone so far out of his way to ensure that there is consultation in every region of our country, both rural and urban. When we think of the family farm, I can assure the member that when we talk about pre-budget consultations, these are issues that have been raised with the Minister of Finance. For this particular budget that is coming out for 2017-18, things of this nature will have been taken into consideration in terms of how we can help small rural farms and entrepreneurs, which are the backbone of the economy in many ways.

I, for one, am very sensitive to our farming community. As a teenager, I can remember riding on tractors in the fields of family friends. I had the opportunity to get first-hand experience at a very young age of what takes place on farms and the important role they play.

In recent years I have had the opportunity, as all members have, to visit rural communities. One thing that come to mind is the size of the farms. We talk about the cost of land, but when we look at the size, the infrastructure for farmers today is so much more than it was in previous years.

I think it was on highway 2, late at night, I could see a long line of lights coming at me. They were combines in the field in a long row taking the crops off the field. It was most impressive. It gives one a better appreciation of the role we play in providing food for the world. When I think of that, it goes back to, in many ways, the beginnings of the family farm and recognizing how important that community is to our country.

I can tell members that this is a government that is very sensitive to the needs of our farms. We see that virtually every day when the Minister of Agriculture and Agri-Food talks about the importance of supply management and the importance of taxation.

I understand that my time has run out. I look forward to being able to continue on another day.

Income Tax ActPrivate Members' Business

6:30 p.m.


The Deputy Speaker Conservative Bruce Stanton

The hon. member for Winnipeg North will have a minute and a half remaining for his remarks when the House next takes up consideration of the motion.

The time provided for the consideration of private members' business has now expired, and the order is dropped to the bottom of the order of precedence on the Order Paper.