Mr. Speaker, I am proud to rise in the House today as the MP for a rural riding with an abundance of small and medium-sized businesses and plenty of family farms that go back more than 10 generations.
The work they do contributes to Montmagny—L'Islet—Kamouraska—Rivière-du-Loup's prosperity and entrepreneurial culture. I want to inform my colleagues that the Canadian Federation of Independent Business recently named Rivière-du-Loup the top entrepreneurial city in Canada in its fall 2016 ranking, this just a year after it was recognized as the most entrepreneurial city in Quebec.
There is no doubt that my riding and Rivière-du-Loup in particular are going full entrepreneurial speed ahead.
As a Conservative, I am proud of the previous government's record with respect to job creators. Our government reduced the corporate tax rate from 22% to 15% and the small business rate to 11%. It also increased the maximum revenue threshold for small business tax rate eligibility from $300,000 to $500,000.
As an entrepreneur myself who has created 20 or so jobs over the past 25 years in the printing industry in my region, I understand the importance of maintaining a tax system that favours entrepreneurship. Small businesses are the backbone of our economy. They created over 77% of all new jobs from 2002 to 2012.
People go into business for a variety of reasons. Some people are motivated by their passion, while others see a service gap that needs to be filled in their respective communities. For the most part, people go into business in order to meet their needs and those of their family. That is what I did myself in 1993 when I started my business.
We do so with the fervent hope that, one day, our children will take over our businesses, and we are eager to see them make our businesses flourish and build an even better future for our regions.
In my case, I fully intend to transfer some or all of my family business to my daughter at some point. I am extremely proud of my daughter, who has been working with me in my business for the past three years now.
I was very surprised to learn that, under Canada's current tax laws, it would be better for me to sell my business to an outside third party rather than to a member of my own family.
Essentially, when a business is sold to a family member, the difference between the sale price and the original price of the business is considered a dividend and is taxable as regular income at 100%. However, if the sale is between two strangers, the difference is considered a capital gain, only half of which is taxed.
What is more, in Canada, the lifetime capital gains exemption that normally applies to small and medium-sized businesses does not apply in this case.
What type of message does that send? Does this not discourage people from starting a business?
What we want is to ensure that our country's economic growth continues to expand. For that we need to encourage people to get into business. When people who have been in business for 25, 30, or 40 years are ready to hand over their shares to their children, it is not right to put them at a disadvantage. The same advantages should apply whether the business is sold to a third party or a family member.
An estimated 550,000 business owners are going to want to sell or transfer ownership of their business over the next decade.
According to the Canadian Federation of Agriculture, over $500 billion in farm assets are set to change hands over the next 10 years. That is not to mention the over 8,000 family farms that ceased operations in the past decade. The population is aging, yet only 50% of these farm owners have a succession plan.
I would like to remind members that the Lower St. Lawrence region has one of the largest aging populations in Canada, which means that there are fewer opportunities to sell our businesses to future generations.
Given the aging population, three out of four farmers intend to retire in the next 10 years. It is therefore urgent that we correct the discrepancy in the Income Tax Act so that we are prepared for the upcoming demographic reality. That is why I support Bill C-274, which was introduced by my riding neighbour, the hon. member for Rimouski-Neigette—Témiscouata—Les Basques.
This bill caught the attention of the Rivière-du-Loup RCM in the Lower St. Lawrence region, which wrote a letter in the fall indicating its support for Bill C-274. The Rivière-du-Loup RCM's chamber of commerce did the same. Support is growing across Quebec. The Association des marchands dépanneurs et épiciers du Québec has spoken out against the existing situation, and the Union des producteurs agricoles and the Board of Trade of Metropolitan Montreal have both indicated that they are in favour of this bill. All of the major opposition parties support this bill. It remains to be seen whether the Liberal government will also support it.
I think this is a good opportunity for the Liberals to redeem themselves after breaking their election promise to cut corporate taxes from 11% to 9%, voting for an increase in CPP contributions, and imposing a carbon tax on a still fragile economy.
Bill C-274 is an opportunity for the NDP, the Conservatives, and the Liberals to join forces and quickly pass a bill that would recognize that small businesses and family farms are important to Canadian society. I encourage each one of my colleagues to say yes to Bill C-274.
In closing, I would like to add that there is widespread support for this bill across Canada and especially in rural areas, where families create small businesses and support them from one generation to the next. I sincerely believe that these families must have this opportunity. Just imagine that I were to sell my business to my daughter. I would have to pay 100% of the tax instead of 50%. If I only had to pay 50% of the tax, I could continue to help my daughter grow her business. That money would certainly go back into the economy.
Once again, I invite all my colleagues to support Bill C-274.