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.