Mr. Speaker, I would like to thank my colleague for his question. I am pleased to address this issue because it gives me the opportunity to highlight the high priority that our government places on Canada's dynamic agriculture and food industry.
I want to begin by reassuring the House that hard-working small business owners, including family farmers, are not the focus of the government’s proposed tax changes involving private corporations. I particularly want to reassure them that the proposed changes will not apply to AgriInvest income. AgriInvest is a savings account in which producers receive matching contributions from federal, provincial, and territorial governments. Producers can use their AgriInvest accounts as they see fit. Government contributions are taxed only when producers withdraw funds from their savings account.
Under the existing tax system, investment income placed in an AgriInvest account is treated as active business income. The government intends to continue with that approach. In other words, the tax treatment of AgriInvest will remain unchanged.
Our priority is to ensure tax fairness while avoiding unforeseen consequences for hard-working farmers. During the consultations, we heard that the proposed measures regarding the lifetime capital gains exemption and the conversion of income into capital gains could be bad for farming families, particularly as they might prevent farm owners from passing on their business to their children.
We want family farms to stay in family hands. That is why the government will not be moving forward with the proposed measures to limit individual access to the lifetime capital gains exemption or regarding the conversion of income into capital gains. In the meantime, farm owners will continue to be eligible for a lifetime capital gains exemption of up to $1 million for farm property.
We want farming families to succeed. That is why the government will continue to support programs like AgriInvest. We will continue to make sure all family farm owners can pass on the fruits of their labour to the next generation.