Mr. Speaker, I will be sharing my time with the hon. member for Don Valley East.
I want to begin by saying that I fully support the business owners and farmers of Glengarry—Prescott—Russell. I grew up with a father who sacrificed hours and hours working on his business when I was young. He had two restaurants and was involved in municipal politics. Spending time with him meant going to the restaurant early in the morning or going to the office. I personally experienced the family sacrifices a father or mother must make for their business. That is why I wanted to speak to the motion we are debating today.
Today, I will explain what we are trying to accomplish and why I will not support the motion.
We know farmers are key to our economy, which is why we want to make sure we get this right, particularly when it comes to the new generation of farmers and agricultural entrepreneurs.
The government will not change benefits in the tax system that are intended to help family businesses grow, create jobs, and innovate. Farmers do so much for Canada. They deliver high-quality food to Canadians and our international customers, provide jobs in rural communities, and boost Canada's economy, while working to safeguard our natural resources.
As I am sure my honourable colleagues know, farming is a 24-hour, 7-day a week business. It is a physically demanding, time-consuming job. It is commendable.
Supporting farmers is a priority for the government and for me, personally. We know that one of the greatest returns on investments we can make is helping the next generation enter agriculture as their career of choice.
As the industry grows, so does the need for additional talented, energetic and well-educated young people. The government is committed to helping this new generation obtain the skills and support it needs to help young people move into good-paying jobs, including many opportunities in Canada's agriculture sector.
A recent informal survey by Farm Credit Canada of 33 post-secondary institutions offering agriculture and ag-related programs confirms agriculture has become a popular career option, especially over the past five years as the industry has grown.
According to Statistics Canada, in 2014, over 12,000 students across Canada were studying in agriculture or an ag-related program. This is great news. A University of Guelph study found that there are 4 job openings for every graduate of the Ontario Agricultural College. The gap has risen from 3 jobs for every graduate in 2012, despite a 30% increase in enrolment over the same period.
Sixty-seven per cent of agriculture companies and 51% of food processors or retailers said they had trouble finding qualified employees, according to the study. The University of Manitoba's School of Agriculture just graduated its largest class in more than 30 years. Similarly, the University of Guelph’s Alfred campus offers a wide range of courses aimed at training the next generation of farmers.
According to Statistics Canada’s Census of agriculture, for the first time since 1991, the number of farmers under the age of 35 increased. Agriculture has shaped our nation and contributes to the health of both Canadians and Canada's economy.
We are talking about a powerful engine of jobs, growth and trade in this country. Today, it is a $100-billion industry, employing more Canadians than any other industry in Canada.
Thanks to our innovative farmers and their commitment to delivering the highest standards of safety and quality, Canadian foods and beverages can be found on store shelves around the globe. Customers in the world’s fastest-growing market, China, can now order Canadian food products with the click of a mouse.
As we celebrate the 150th anniversary of Confederation, it is exciting to reflect on how far our agricultural industry has come. Farmers can now link their tractors to satellites in the sky, and we now have robots to milk cows. This would have seemed like science fiction in 1867.
The future is bright for this dynamic industry, with a growing global middle class looking for products our world-class farmers and food processors can deliver. To continue to succeed, however, the sector depends on continuing to attract young farmers. There are financial hurdles to overcome for many young people to take over the family farm or start their own farm business from scratch.
That is why the government, through Farm Credit Canada, has increased its support for young farmers by doubling the amount of credit available to $1 million from $500,000. As well, FCC has lowered the possible minimum down payment to 20% of the value of the loan which supports the purchase or improvement of farmland and buildings. These are key measures which will help beginning farmers overcome the considerable capital outlay required to start out in the business.
Young farmers also play a key role in the Canadian Agricultural Partnership, a federal-provincial-territorial agreement to invest $3 billion to advance our great industry over the next five years. The partnership will focus on priorities that are critical to unleashing the sector’s growth potential, including research, innovation, domestic competitiveness and trade.
The partnership will be a solid foundation for the future of our great agricultural sector. To grow our agrifood trade even further, the budget targets $75 billion a year in agricultural exports by 2025.
As the House can see, the government fully understands that it is in Canada’s best interest to encourage young people to choose a future in agriculture. The tax changes we are proposing will not raise tax rates on farm businesses. They will not affect farmers’ ability to incorporate, make investments or pay family members who work in the farm business.
Our priority is to ensure tax fairness, while avoiding unintended consequences for our hard-working farmers. This is the purpose of the consultation. I realize that there may need to amend the bill once it is introduced, but that is what consultations are for. We provide information, knowing that comments and suggestions will follow. It is not a done deal, as some people claim.
The Minister of Finance indicated that the our government’s goal was not to make it more difficult to transfer family farms. On the contrary, we want to make it easier.
I had the opportunity to speak to many accountants and tax lawyers since the beginning of the consultations. I want to thank each and every one of them who reached out to me. They agree with the government that while legal, converting dividends into capital gains is an aggressive tax strategy. Most of them do not advise their clients to do so. They also agreed that a child who was two days old should not be able to use the lifetime capital gain exemption. Again, the vast majority of entrepreneurs do not do this.
I believe the last point is important for a young generation. Under the current rules, children could use the lifetime capital exemption, which is up to $850,000, without their consent. Let us say they start a business and grow it into a success. By the time they want to retire and sell the business, if the amount of the lifetime capital exemption was all used when they were two days old, they will have to pay the full taxes on capital gains when they retire. That is wrong, and ut is not fair for a young generation.
Some accountants and tax specialists have also raised concerns, and I recognize that the proposal contains certain unwelcome measures. I also know that the Minister of Finance has been listening to and will continue to listen to people’s concerns.
What farmers and entrepreneurs need is certainty in the marketplace. Extending the consultation period would cause more delays and more uncertainty in the market. Realistically, if the Conservatives are going to blast us for launching these consultations during the summer, I do not see how extending them during the Christmas period is going to help.
Lastly, the government’s goal is to make sure the next generation of farmers has the tools, resources and support it needs to succeed.