House of Commons Hansard #36 of the 43rd Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was language.

Topics

Canadian Net-Zero Emissions Accountability ActGovernment Orders

5:20 p.m.

NDP

Laurel Collins NDP Victoria, BC

Madam Speaker, I will answer the question around the opportunity for good green jobs in the low-carbon economy first. We know if we were to invest the billions that are being spent on the fossil fuel industry, the $12 billion that is proposed for the Trans Mountain expansion project, into green infrastructure, clean energy and building retrofits, it would create hundreds of thousands of good jobs across the country in local communities.

I also want to touch on the other part of the question, which is about the connection between the women's movement and the environmental movement. We know women are disproportionally impacted by the climate crisis, both here in Canada and around the world. We also know that women have been leaders in a lot of these climate movements. I want to thank the member for bringing up that point.

Canadian Net-Zero Emissions Accountability ActGovernment Orders

5:25 p.m.

NDP

Alistair MacGregor NDP Cowichan—Malahat—Langford, BC

Madam Speaker, I would like to thank the member for Victoria for an incredible speech. She did her constituents proud with her interventions on Bill C-12.

The previous intervention from my Conservative colleague illustrates the complete disconnect that exists there with the impending challenge that is before us with respect to climate change. In order to make people like that understand the gravity of the situation, perhaps it would be informative to the House for the member for Victoria to put the costs in economic terms. In other words, what are the costs going to be to our economy? Never mind the ecological devastation; what will the economic costs be to Canada with respect to upgrading our infrastructure and adapting to a new climate if we do nothing? Perhaps that will make my Conservative colleagues finally understand the gravity of the situation before us.

Canadian Net-Zero Emissions Accountability ActGovernment Orders

5:25 p.m.

NDP

Laurel Collins NDP Victoria, BC

Madam Speaker, I thank my colleague from Cowichan—Malahat—Langford for his insight.

It is the acknowledgement that the costs of inaction greatly outweigh the costs of investing in the kinds of good sustainable jobs we know Canadians need and are needed to meet our climate targets. There has been a lot of research, both globally and some here in Canada. One of the amendments I would like to see for this bill is for the advisory body to have a role in outlining those costs so we get updated annual reports on not only the costs of catastrophic climate change, both present and future, but also how we adapt our planning to adjust to some of these horrific things, like forest fires, flooding and increased severe weather events.

Canadian Net-Zero Emissions Accountability ActGovernment Orders

5:25 p.m.

Green

Elizabeth May Green Saanich—Gulf Islands, BC

Madam Speaker, I also want to commend my hon. friend from Victoria for an excellent speech.

To my eternal horror, I have literally been working on this issue since 1986. I have seen the targets put in place and each time I can recite, chapter and verse, what particular event knocked us off course.

When we look at other countries, as the hon. member did, I want to draw attention to New Zealand's climate accountability act and the U.K. act. The U.K. act has bracketed carbon budgets, which this bill lacks, that are currently in the 2018 to 2022 carbon budget. The New Zealand act is newer, but it has put in place 2025 goals and carbon budgets.

I think it is terribly important that the government listen to the IPCC's 1.5° C special report of October 2018. I will ask my hon. friend, who is clearly familiar with it, to set out what we need to do before 2030 to avoid going above 1.5° C.

Canadian Net-Zero Emissions Accountability ActGovernment Orders

5:25 p.m.

NDP

Laurel Collins NDP Victoria, BC

Madam Speaker, I want to thank the member for Saanich—Gulf Islands for her ongoing advocacy with respect to the environment and addressing the climate crisis. This question is so important. Not only are we presenting the fact that the biggest gap in this bill is the missing 2025 milestone target, the missing progress report that would come before that and the missing accountability for the most important 10 years, but also what actions we need to take between now and 2030 if we want to avoid catastrophic climate change. Some of those things include investments in clean energy, retrofits and green infrastructure.

We also know we need to stop doing some things, such as pouring money into fossil fuel subsidies. We need to stop the expansion of the Trans Mountain pipeline. We need to put that money into solutions that will get us to our climate target and protect our future, and the future of our children and their children.

Canadian Net-Zero Emissions Accountability ActGovernment Orders

5:30 p.m.

Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the President of the Queen’s Privy Council for Canada and to the Leader of the Government in the House of Commons

Madam Speaker, just for clarification, the member did imply that, when we talk about the net-zero advisory committee, the NDP would not want to have industry reps; and we are not talking about workers, we are talking about representatives of the industry. Is that the official position of the NDP?

Canadian Net-Zero Emissions Accountability ActGovernment Orders

5:30 p.m.

NDP

Laurel Collins NDP Victoria, BC

Madam Speaker, I am curious if the member across the way does not consider that workers who are in the fossil fuel industry can represent that industry. Is he saying that only executives or officials from the company themselves can—

Canadian Net-Zero Emissions Accountability ActGovernment Orders

5:30 p.m.

Liberal

The Assistant Deputy Speaker (Mrs. Alexandra Mendès) Liberal Alexandra Mendes

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

Income Tax ActPrivate Members' Business

5:30 p.m.

Conservative

Larry Maguire Conservative Brandon—Souris, MB

moved that Bill C-208, 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.

Madam Speaker, it truly is a humbling moment to stand in this chamber and put one's name to legislation and ask one's colleagues to support it. As fate would have it, today marks the seventh anniversary of my representing Brandon—Souris since the by-election that took place on November 25, 2013.

Private members' bills give us the opportunity to set aside our political allegiances, to rise as parliamentarians and to champion the causes of issues whose time has come. In that spirit, I reached out to all the MPs in this House from other parties, to speak about this legislation back before the first reading. I want to specifically thank Guy Caron, who spearheaded this legislation in the last Parliament. Now it is up to us to pick up where he left off and pass it into law.

The essence of this bill is pretty straightforward. Bill C-208 would allow small businesses, farm families and family fishing corporations the same tax rate when selling their operations to a family member as they would if they sold it to a third party. Currently, when a person sells their small business to a family member, the difference between the sale price and the original purchase price is considered to be a dividend. However, if the business is sold to a non-family member, the sale is considered a capital gain. A capital gain is taxed at a much lower rate and allows the seller to use the lifetime capital gains exemption.

It is completely unacceptable that it is more financially advantageous for a parent to sell their farm or small business to an absolute stranger than it is to their own children. I want to give two specific examples this afternoon on how this legislation will help families transfer their operations when they decide to make that transition.

Imagine a bakery that a couple have owned for about 30 years. The couple running the bakery are now ready to retire and another bakery has reached out to indicate that they would like to purchase it from them. However, their daughter has worked with the couple throughout the years in that bakery as she has grown up and has indicated that she wants to take over the family business. Like a lot of small business owners and farmers, they could not afford to put large sums of money away into RRSPs and other saving vehicles, as any extra money that they had went into their own small business.

This couple would rely on the sale of the bakery to basically fund their retirement plans, so they call upon an accountant to start a conversation about different planning scenarios. Their accountant comes back to them, saying if they sold the bakery to the other company, rather than their daughter, they would have an effective tax rate of 10% after using their lifetime capital gains exemption. Their accountant also told them that if they sold the bakery to their daughter, she would be obligated to repay their loan with personal tax dollars, which is a significant penalty. Compared to selling their bakery to the other company, it would render the effective tax rate to be significantly higher. With that information in hand, they have a family huddle and discuss the options.

The couple is now seriously considering selling the business outside of the family as they do to want to put the burden of their tax obligation on their daughter. It would inhibit her ability to make a living and grow the business. On the sale of shares to the bakery, this couple should be indifferent to selling shares to their daughter or the other company. Their daughter should not be penalized for purchasing shares from her parents and should be able to fund the purchase with corporate funds, as she would if she were to purchase the business from an unrelated party.

Bill C-208 would allow the next generation to become business owners and to keep businesses locally owned. With this bill, Bill C-208, we can fix this injustice once and for all. Right now many small businesses are struggling. This pandemic has been one of the most disruptive times in our lifetime. Across our country, no community is immune from its impact. To those entrepreneurs who are listening to this speech tonight, I have their back. Anyone who has ever run their own business understands the massive responsibility and stress that comes with being one's own boss. They are risk takers and job creators. Small business owners make up the backbone of our economy.

From tradespeople to grocers, and everything in between, entrepreneurs are the pillars of our communities. It is not easy to start a business. Some people must take out massive loans just to get their doors open. They put everything on the line to make their operations a success. Hopefully, after many years of hard work, they slowly and surely pay off their debt, expand their business and create even more jobs in their own communities. They pour their hearts and souls into their businesses and, when they are ready to enjoy retirement, there would be no greater joy for them than to see what they built be transferred to their child or grandchild.

As a young entrepreneur, I was one of those who was able to carry on the legacy of my parents. In 1948, my mom and dad carved out a little slice of heaven and started our farm near Elgin, Manitoba. My brother and I are proud to be the sons of farmers.

In the words of Paul Harvey:

And on the 8th day, God looked down on his planned paradise and said, “I need a caretaker.” So God made a farmer. God said, “I need somebody willing to get up before dawn, milk cows, work all day in the fields, milk cows again, eat supper and then go to town and stay past midnight at a meeting of the school board.” So God made a farmer.

I learned a lot from my parents. There were times when they were incredibly tough. Sometimes commodity prices were in the basement. There were other times when equipment would break down just when it was needed the most. I know life is not always easy. It never has been, and it probably never will be.

However, the legislation we have before us today sends a strong message to all those family-run businesses that it will no longer be more financially advantageous to transfer a business or farm to a stranger than to their own children because of tax purposes.

The other example I want to give is of a farmer who is set to retire in the next couple of years and is reviewing succession options. The farmer wants his son to take over; however, he wants fair market value for his farm in order to fund his retirement, as well.

If a third party were to ask to purchase the shares of the farming company, the purchaser would be able to purchase those shares through a corporation. By selling his farm to this third party, the farmer could use his farm capital gain exemption on the sale, resulting in a 13.39% effective tax rate.

However, if the farmer sold his farm to his son, that sale would be recorded as a dividend, rather than a capital gain, and the farmer would pay 47.4% in tax. That is over 34% more in tax. I think we can all agree that it is completely unfair for the tax rate to be significantly higher when the farmer sells his operation to his son rather than to a third party who, in many cases, is a complete stranger.

Bill C-208 sends a message of hope to young farmers who want to carry on what their parents started. There is something special about being connected to the land and reaping what one sows, as is true for any small business. It is an attachment.

In Manitoba and other provinces, there are Century Farm Awards to celebrate farm families who have maintained continuous production for 100 years or more. Many of these in the Prairies are now well over 125 years. I have attended many centennial farm celebration ceremonies, and the faces of the family members involved show how important this milestone is for them.

Farm families face unique pressures in succeeding their operations, including the increasing cost of land, the average age of farm operators and the capital requirements for those entering the industry. The passage of this bill would eliminate the unfair tax rates that make it difficult to keep businesses under family ownership.

With that, I ask my colleagues to reach out to their constituents and ask them if they should support this legislation. Ask those constituents if they think it is unfair that selling a business to their children should be more expensive than selling to a stranger.

This legislation would impact every single constituency in Canada. From a family run farm in Cumberland—Colchester to a family run business in Winnipeg North or a fishing enterprise in Miramichi, people are looking to their members of Parliament to support this bill.

With that, I ask all members to join me in passing Bill C-208. By working together, we can support our entrepreneurs, small businesses, farmers and fishers who make up the backbone of our economy. Let us roll up our sleeves and get this job done.

Income Tax ActPrivate Members' Business

5:40 p.m.

Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the President of the Queen’s Privy Council for Canada and to the Leader of the Government in the House of Commons

Madam Speaker, I congratulate the member on his seventh anniversary today.

I recognize the true value of our family farms. Not only today, but in the past, they have contributed so much to who we are as a nation and kept our rural identity very much alive.

Has my friend across the way had any discussions with the Department of Finance or the Department of Agriculture to get a sense of the potential cost we are talking about? Has there been any dialogue with respect to that?

Income Tax ActPrivate Members' Business

5:40 p.m.

Conservative

Larry Maguire Conservative Brandon—Souris, MB

Madam Speaker, yes, we have. We reached out, as Mr. Caron did before, to the Parliamentary Budget Officer, who indicated that depending on the means and number of units that are sold, it could be anywhere from $178 million to $300 million annually. It would make a huge difference to each individual operation, leaving much more money in the hands of those people to spend on things that would contribute to society. It is not a complete cost, because a lot of that money would come back through taxes and purchases they would make for their daily lives.

Income Tax ActPrivate Members' Business

5:40 p.m.

Bloc

Sébastien Lemire Bloc Abitibi—Témiscamingue, QC

Madam Speaker, I thank the member for introducing this bill. It is obviously a bill that is important to us, and I will have the opportunity to talk about it later.

I want to thank him for this outpouring of love for our farmers, especially the next generation. However, is this not inconsistent with what we heard in the House at about the same time yesterday? Conservatives opposed the bill on the breach in supply management that was being defended by my colleague from Berthier—Maskinongé, among others.

How can Conservatives call themselves friends of the next generation of farmers when they attack them and do not want to protect supply management? There seems to be a disconnect.

Income Tax ActPrivate Members' Business

5:40 p.m.

Conservative

Larry Maguire Conservative Brandon—Souris, MB

Madam Speaker, I have reached out on this particular bill to many of the member's colleagues. I did not have a chance to talk with him personally, but I talked with many Bloc members, NDP members, Green members and some of my colleagues in the Liberal Party to get the concentrated input that I have received on this particular bill. I thank him for his support.

As a former farm leader myself, which got me into politics, I can assure the member that there were times when I was looking at making sure we had choices of how to sell our wheat in the world and in western Canada. My colleague, Mr. Ritz, made a good choice in those days.

I was on the phone with the Chicken Farmers of Canada just yesterday. I have spoken with many of the dairy producers in Manitoba, and throughout Canada, a number of times on the particular issue that the member raised regarding supply management. I can assure him that my support for that industry has continued. We did it by making sure that when there was trade interference, there was a compensation package. The hon. member for Abbotsford designed that package with Prime Minister Harper. The big problem, which I just found out yesterday, is there has been no compensation to those supply-managed chicken producers in Canada in the last few years at all.

I can assure the member that we will continue to work together on that.

Income Tax ActPrivate Members' Business

5:45 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

Madam Speaker, I thank the member for bringing forward the bill that Guy Caron worked so assiduously on in previous Parliaments. As the member knows and has indicated, it has been endorsed by independent business organizations that support small business and agriculture and farming organizations. There is a lot of support for this bill. What we will do on the NDP side is endeavour to get it to committee.

I want to ask the member if he is willing to entertain amendments at the committee stage. There are some clarifications, as he is well aware, that would need to happen in terms of the legislation itself. Is he—

Income Tax ActPrivate Members' Business

5:45 p.m.

NDP

The Assistant Deputy Speaker NDP Carol Hughes

Unfortunately, we are running out of time and I would like to have the hon. member provide a brief answer.

The hon. member for Brandon—Souris.

Income Tax ActPrivate Members' Business

5:45 p.m.

Conservative

Larry Maguire Conservative Brandon—Souris, MB

Madam Speaker, the member for New Westminster—Burnaby is right that, among the Canadian Federation of Independent Business taxpayers, L'Union des producteurs agricoles and the Chicken Farmers of Canada, there is a broad base of support for this particular bill to go before the House.

We did spend a considerable amount of time working with Mr. Caron, when he was there before, in moving it forward. If there is anything that we could look at, we would certainly be willing to do that at committee, but I know Mr. Caron worked in great depth to get it to precisely the wording that he had in this bill.

Income Tax ActPrivate Members' Business

5:45 p.m.

Liberal

Tony Van Bynen Liberal Newmarket—Aurora, ON

Madam Speaker, I grew up on a small 50-acre farm and, in spite of having 11 labour-cost-free children, my father still required off-the-farm income because he realized it was not easy to feed 11 children with what we could produce on the farm.

I am pleased to take part in the debate today on private member's bill, Bill C-208, which aims to facilitate the transfer of family businesses between family members.

Ensuring the sustainability of small businesses, family farms and fishing corporations is essential to our economy and to the communities that they serve. This has been underscored by the critical need to support families and communities as we continue to fight COVID-19. Our government understands this. From the outset of the pandemic, Canada's economic response to COVID-19 has introduced a range of support measures for small businesses to help bridge them to the other side.

Simply put, we have their backs. That extends to helping family businesses thrive for generations to come.

Encouraging the sale of family businesses to family members often means those businesses will remain in, and continue to benefit, their communities as well as the families that fought hard, sacrificed and succeeded through pure determination and entrepreneurial spirit. It is with this spirit in mind that Bill C-208 bears careful consideration.

Bill C-208 seeks to amend two of the Income Tax Act's most important and complex anti-avoidance rules. These rules deal with inter-corporate dividends, share sales and circumstances under which the lifetime capital gains exemption is charged. Any relieving changes to these sections of the act must be done cautiously, following rigorous study and debate, to avoid unintentionally creating loopholes that would disproportionately benefit the wealthy instead of protecting the middle class and those working hard to join it.

Section 84.1 of the act, in particular, is in place to apply an anti-avoidance rule where, when appropriate, an individual sells shares of one corporation to another corporation that is linked to an individual, such as a family member. When an individual sells shares of a Canadian corporation to a linked corporation, section 84.1 of the act deems, in certain circumstances, that the individual has received a taxable dividend from the linked corporation rather than a capital gain. This prevents the individual from realizing the proceeds of the sale on a tax-free basis using the lifetime capital gains exemption.

This rule is meant to ensure that taxpayers cannot use linked corporations to, in effect, remove earnings from their corporations, using a sale as a basis to do so. Without this rule, such sales between related parties could be used to convert what should be dividends to an individual shareholder into capital gains that are tax free under the lifetime capital gains exemption.

Bill C-208 proposes narrowing the scope of section 84.1 by removing the sale of shares of small businesses, family farms or fishing corporations from its application, when they are being sold by an individual to another corporation that is owned by their adult child or their grandchild. This change would allow the owner-operator of a family business to convert dividends to the corporation into a tax-free capital gain.

It is important to note that there is currently nothing in the act stopping a parent from selling the shares of a family business directly to their child or grandchild on a tax-free basis using the lifetime capital gains exemption, which currently shelters up to $1 million in capital gains on qualified farm and fishing properties. The issues sought to be addressed by Bill C-208 arise only in multi-tier corporate structures, where one corporation owns a second corporation. Adopting the proposed changes to section 84.1 could open the door to new tax-avoidance opportunities.

Bill C-208 also proposes amendments to section 55 of the act, which generally applies to corporations that seek to inappropriately reduce capital gains by paying excessive tax-free dividends between corporations, which the act considers to be a capital gain.

Two exemptions to these anti-avoidance rules authorize businesses that are restructuring to allow company shareholders to split company shares between them while deferring taxes. The first exemption applies to the restructuring of related corporations and the second applies to all corporate restructuring.

Bill C-208 would broaden the first exemption so that it applies to brothers and sisters, despite long-standing tax policy that considers brothers and sisters to have separate and independent economic interests for these purposes. Any change to this exemption would risk eroding our tax base.

Spouses, as well as parents and their children, are already eligible for this exemption, because it is presumed that they have shared economic interests. 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 of section 55, which applies to all corporate restructurings.

This is called the butterfly exemption, and there are few tax avoidance opportunities under it. If the proposed amendments under section 55 included in Bill C-208 were passed, siblings could undertake business restructurings in which otherwise taxable capital gains realized between corporations would be converted into tax-free intercorporate dividends, which would create new opportunities for tax avoidance in Canada.

I will conclude by saying that we know many businesses are continuing to face stress and uncertainty due to COVID-19. Our government has stepped up to the plate to make sure that they have the support during these unprecedented times.

We have made unprecedented support available to Canadian businesses, including the Canadian emergency business account, which has provided 758,000 business loans totalling $30 billion. The Canada emergency wage subsidy has supported the wages of more than 3.5 million employees totalling $36.7 billion.

Just this week applications were opened for the new Canada emergency rent subsidy, which will provide simple and easy-to-access commercial rent support and an additional lockdown support of 25% for businesses that have temporarily shut down due to mandatory public orders. Combined, this will mean the hard-hit businesses subject to lockdown will receive rent support up to 90%.

Our message to businesses remains the same. We have their back.

There are important considerations to take into account when we are reviewing the merits of Bill C-208. Our government remains committed to working with family businesses, including farming and fishing businesses, to make it efficient, or less difficult, to hand down their businesses to a next generation. However, we must exercise caution when making amendments to the Income Tax Act.

Income Tax ActPrivate Members' Business

5:55 p.m.

Bloc

Sébastien Lemire Bloc Abitibi—Témiscamingue, QC

Madam Speaker, it is an honour for me to rise in the House.

Before I got into politics, I was the secretary to the Fédération de la relève agricole de l'Abitibi—Témiscamingue. My colleague, the member for Brandon—Souris, might be interested to know that.

The matter of transfers, particularly transfers to family members, is very important in Abitibi—Témiscamingue. I remember participating in a workshop about transfers hosted by the Réseau Agriconseils. A number of people attended because they were concerned about this issue, particularly since land value is different in Abitibi—Témiscamingue. Since our land is worth less than land in other parts of Quebec, it cannot be used as security as often. That is not the subject of this speech, but it is relevant when we are talking about the facility of transfer when a business is being transferred to a family member.

I had the opportunity to talk about this when I participated in the convention of the Fédération de la relève agricole du Québec, which took place in March in Rouyn-Noranda, located in my riding of Abitibi—Témiscamingue. As impossible as it may seem, still today, business owners are better off transferring their business to external shareholders than to a member of their own family.

I want to thank the member for Brandon—Souris for introducing his bill. I would have liked to introduce it myself, much like the member for Berthier—Maskinongé, as it is a fundamental issue. The Bloc Québécois supports Bill C-208. For several years now, my party has been calling for measures to encourage and facilitate the transfer of family businesses, especially in the agriculture and fisheries sectors. In fact, I would point out to my colleagues in the House that the member for Pierre-Boucher—Les Patriotes—Verchères introduced Bill C-275, an act to amend the Income Tax Act regarding business transfer in the previous Parliament.

The Bloc Québécois has been calling for measures to encourage and facilitate the transfer of family businesses for more than 15 years. For Quebeckers, for the Bloc Québécois, and for me, business succession is important. The next generation is important for the future of our SMEs in general, but especially for the family farming businesses in the Abitibi—Témiscamingue region.

Business succession is a major and promising phenomenon across Canada and especially in Quebec. Nearly one-third of Quebec's small and medium-sized businesses were buy-outs. In 2017, one-quarter of Canadian SMEs were takeovers. In Quebec, the majority of business buy-outs are in rural areas, where 44% of the SMEs belong to entrepreneurs who have taken over a business. In Canada, that figure is around 31%, according to UQTR professor Marc Duhamel, a regular researcher at the UQTR's small business research institute. Unfortunately, the government's unfavourable tax rules do little to encourage business succession.

The risk of sales to foreign buyers and businesses being lost is very real. In 2018, it was estimated that between 30,000 and 60,000 Quebec businesses would not find a buyer in the years to come and would die as a result. That represents around 150,000 jobs and $8 billion to $10 billion in revenue.

Right now, Quebec is losing one farm a day. That is alarming. The risk of sales to foreign buyers and businesses being lost is very real. In Quebec, the next generation of entrepreneurs is suffering badly. Unfortunately, this Parliament is not doing enough to support business succession.

Why does the Liberal Party not want to put a family member on equal ground with a foreign investor? Here are the facts. Under the existing legislation, the transfer of a business to a family member is treated as a dividend and not as a capital gain, unlike a sale to a third party. As a result, owners are not entitled to the lifetime capital gains exemption if they decide to sell the business to their children. The existing legislation is an affront to common sense.

Why does the Liberal Party of Canada refuse to amend the Income Tax Act? As we just heard, they appear to be worried about condoning tax evasion. That would explain why the Income Tax Act makes no mention of the notions of transferring, shuttering or selling a small business to a family member, for fear of potential abuse or tax fraud. If abuse and tax fraud are actual reasons, I am having trouble understanding why the Liberal Party continues to do nothing about tax havens.

As the member of Parliament for Abitibi—Témiscamingue, I have had the honour, along with members of my team, to speak with many farmers in my region week after week. I want to acknowledge the president of the Fédération de la relève agricole, Meghan Jarry. The federation and all business owners in Quebec see business succession as a key way to stop the outflow of businesses and Quebeckers to urban centres and to make it easier for young entrepreneurs to take over the family business.

Business succession is essential for Abitibi—Témiscamingue. It is essential for all of Quebec. The future of the Abitibi—Témiscamingue region is in the hands of the next generation of farmers.

I want to quote a farmer from the region, Simon Leblond, who is also a friend and a member of the Fédération de la relève agricole du Québec. He was the president of FRAQ when I was the secretary there. He said the following:

I am certainly going to have challenges, starting with the financing and development of my company, of course. There are also other issues unique to my region, including maintaining a large enough pool of producers to maintain services for farms and, more generally, to ensure the vitality of the industry and make it known to those outside the world of agriculture.

The next generation of farmers is essential because it ensures the vitality of agriculture, which in turn ensures the vitality of the towns in our regions. The vitality of our regions ensures the vitality of Quebec, the dynamic use of our land.

I think we need to talk about distress. In Abitibi-Témiscamingue and other parts of Quebec, farmers young and old are struggling. They have to deal with red tape, paperwork, long hours of work, their roles as mothers or fathers, bills, the stress of everyday life, the stress of being in debt, equipment that breaks down and has to be repaired or replaced, short production and crop seasons, poor weather conditions and all of the other pressures they are under.

Farmers are in real distress. Encouraging and facilitating the transfer of family businesses could alleviate some of that distress. I think that is an important reason for members of the House to support Bill C-208.

Now I would like to talk about what things are really like for new farmers. We all know farmers are stubborn and tenacious people. They are probably the most resilient members of our society. Young farmers are constantly looking for ways to access assets and encourage the transfer and start-up of agricultural businesses in Quebec. They face major challenges, including land grabbing and land financialization, income security, vet services for farm animals, crop insurance and agricultural drainage. These are major challenges. Improving access to land and improving quality of life for Quebec's young farmers is one way to ensure a future in agriculture for Quebec's youth.

It is the duty of this Parliament to create conditions conducive to establishing the next generation of farmers in order to attract that next generation and secure the future of small and medium family farms. That cannot happen without easier access to land. Transferring a farm is the best way to get a start in farming because starting a farm from scratch is very hard.

On top of that, land prices, the cost of quotas and production standards are increasing every year. Farm values are increasing. It takes longer and longer and is increasingly difficult to transfer the farm to one's children. Paying back the loans needed to purchase a farm takes so long and the red tape is becoming increasingly cumbersome, making it increasingly difficult for farmers to access land and operate their businesses. Farmers want the process for purchasing a farm to be simplified. Some are calling for a single-desk model to avoid having to speak to too many stakeholders in a transfer process. Everything I have mentioned from the beginning of my speech reflects opinions expressed by the Fédération de la relève agricole du Québec, which works to improve the lives of young farmers in Quebec.

Just today, actually, I spoke with Julie Bissonnette, the president of the FRAC, and its executive director, Philippe Pagé. Regarding the transfer of a family farm, the Fédération de la relève agricole du Québec is unanimous: It is just wrong that it is more advantageous to sell the family farm to a stranger than to a family member. Julie Bissonnette told me today that she is always asked about this issue no matter where she goes. Young farmers in Quebec and the Abitibi—Témiscamingue region have been calling for legislative changes for several years now.

She also told me that it was a problem on both sides. The transferors also want this to change. The oldest farmers in Abitibi-Témiscamingue want to transfer their farms to family members. This means that local farming will be put on hold. Dozens, if not hundreds of young future farmers and transferors want to be able to make transactions. This is a global issue. This desire to transfer their farm to their children is part of what has been driving older farmers to work as hard as they do and invest so much time in it for 30, 40 or 50 years. It may even span two, three, four or five generations. Farmers work like mad to provide a future to their kids. Selling their farm to a stranger can lead to feelings of failure or profound grief.

For farmers, it is a big step to hand over the farm to their children out of love and devotion. That is what I have heard from FRAQ members, young and old alike, who feel concerned. Their greatest wish is to be able to hand over their farms to their families.

I will conclude by mentioning that the tax arguments raised when the last point was rejected do not hold up well if we look at the PBO study. In my opinion, if things are not moving right now, it is because there is a flagrant lack of political will on the part of the Government of Canada. This lack of will needs to stop, and that is why the Bloc Québécois supports Bill C-208.

I expect the House to unanimously support this bill in order to prevent this outflow of people to urban centres and to foster the entrepreneurial spirit of our young farmers.

Income Tax ActPrivate Members' Business

November 25th, 2020 / 6:05 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

Madam Speaker, I am pleased to rise on behalf of the NDP caucus today at second reading of Bill C-208. We will be according our support at second reading to take it to committee. As I already indicated, we will be looking potentially for some clarifications around the bill when it goes to committee.

I need to praise Guy Caron, the former member of Parliament for Rimouski-Neigette—Témiscouata—Les Basques, for his good work in advancing this issue. This is not an insignificant issue. It is extremely important for the next generation of people running small businesses across the length and breadth of our country, for family farms to be passed down from one generation to the next and for fishing corporations to be passed down as well to maintain the vital fishing industry on our coasts across the country.

These are important points that Guy Caron brought forward to Parliament which we are now debating to take to committee. These extremely important things must be put into place.

I am a long-time member of the New Westminster Chamber of Commerce and the Burnaby Board of Trade. Because of that long-time involvement in the Board of Trade and Chamber of Commerce, I have worked with small businesses. I also ran a social enterprise myself.

It is extremely important to maintain those family-run businesses across the country. In many communities, family-run businesses are really the backbone of a community's economic development. Ending what is a very perverse aspect of our tax system and facilitating, in a sense, small businesses under $1 million to be passed from one generation to the next without penalties being incurred makes a big difference for family-owned business.

As well, I come from a farming family. My mother's family ran a farm in Alberta when it originally came from Norway and settled in the Cariboo Hill area of Burnaby. The area now known as Cariboo Park was the family farm.

Families that have run farms for generations have nothing but my deepest respect. Again, we have to end the perverse penalties that exist right now for families that want to pass their farms from one generation to the next.

I am going to set aside my speech for a moment because I would like to respond to the member for Newmarket—Aurora, who spoke to the bill on behalf of the Liberal government. He basically questioned the impacts on the tax base of putting forward these measures.

The Liberal government has completely collapsed the tax base in the country. I find it incredible, quite frankly, for any Liberal to stand in the House and say that he or she is concerned about the tax base for something that is of far less significance on the scale of the federal budget than it is in the positive impacts small businesses and farms would feel across the country.

The reality is, as the Parliamentary Budget Officer has pointed out, the government has undermined the tax base to the point that we lose over $25 billion a year to overseas tax havens. In terms of housing, education, health care expanding to pharmacare and dental care, $25 billion lost each and every year, $125 billion since the Liberals came to power, is an astronomical amount.

CRA representatives who came before the finance committee indicated that the reason nobody had ever been prosecuted for the Panama papers or the paradise papers, the well-known documentation around the use of overseas tax havens, was because they had never been given the tools by the Liberal government to crack down on these overseas tax havens. For the government to pretend its concern is the tax base, when it has done anything but, as an excuse, a pretext, for opposing the bill is difficult to believe.

In addition, as you well know, Madam Speaker, the NDP has brought forward provisions around the wealth tax and the excess profits tax. The leader of the NDP, the member for Burnaby South, has been very clear in this respect. The federal Liberal government has simply refused to undertake those measures, even though we know Canadian billionaires have added to their wealth, over $37 billion since the beginning of this pandemic.

The banking sector has received over $750 billion in liquidity supports and their profits have been astronomical as well. Just in the first two quarters, over $15 billion in profits have been supported by federal government institutions, ensuring, with as much largesse as possible, that they have everything taken care of during this pandemic.

In previous crises that the country has gone through, for example, the Second World War, there were strict laws against profiteering. There was an effective corporate tax rate to ensure we were all in this together. The government has refused to do the right thing, whether it is cracking down on overseas tax havens, bringing in a wealth tax or proposing an excess profits tax. It has undermined and destroyed our tax base.

What many Canadians are concerned about is the fact that this could well lead to austerity when Canadians are not getting the supports, in so many cases, they need to get through this pandemic.

The last point I would like to make in reply to the member for Newmarket—Aurora is that he seemed to be very proud about the government support for small businesses. If he spoke with small businesses, the member would know that nothing could be further from the truth. The NDP put pressure on the government to bring in the wage subsidy. The NDP was able to achieve that in this minority Parliament.

However, the rent relief program was a massive failure. The member for Courtenay—Alberni, the NDP small business critic, has raised this repeatedly. Now we have a rent relief program that will fix all the problems with the old one, but the federal Liberal government has refused to put into place the retroactivity that would allow small business that did not get any rent relief in the first version, because it was so badly botched, to apply retroactively for rent relief.

The pretensions of why Liberal members would oppose the bill are disingenuous, to say the least, when the Liberal government has done everything to destroy our tax base, while at the same time has not offered the supports for small business, which are so desperately needed.

A number of people have talked very positively about the bill.

Dan Kelly, president of the CFIB, has said, “Many small business owners are telling us that tax rules discourage them from passing on their firm to their children.”

This time Mr. Kelly was speaking about Guy Caron's work, when he said that the “Bill addresses this unfairness and will help small business owners ensure their firm remains locally owned, creating and protecting local jobs.”

Ron Bennett, president of Canadian Federation of Agriculture, has said, “Simply put, if taxation barriers aren't addressed, we will see fewer and fewer family farms in Canada. We support Mr. Caron and his colleague's commitment to addressing these tax burdens that could cause significant administrative burden.”

The bill introduced by Guy Caron, the former member for Rimouski-Neigette—Témiscouata—Les Basques, was supported by many organizations, including the Fédération des chambres de commerce du Québec, the Board of Trade of Metropolitan Montreal, the Union des producteurs agricoles du Québec, the Agricultural Alliance of New Brunswick and the Producteurs de lait du Québec, not to mention several other organizations representing supply-managed farms.

This is part of what should be done to preserve family farms while above all continuing to support a stronger supply management system. We will be supporting the bill and hope to discuss it at greater length in committee.

Income Tax ActPrivate Members' Business

6:15 p.m.

Conservative

Richard Lehoux Conservative Beauce, QC

Madam Speaker, I am pleased to speak in support of Bill C-208, an act to amend the Income Tax Act with regard to the transfer of a small business or family farm or fishing corporation, which was introduced by my colleague, the member for Brandon—Souris.

The amendments made by this bill are necessary to standardize the process for selling family businesses. These amendments would considerably improve the Income Tax Act with respect to the transfer of a small business or family farm to a family member.

In the current state of affairs, the sad reality faced by business owners is that they must pay more taxes if they sell to a family member than if they sell to a third party. The current act puts operators who want to transfer their family business to their son or daughter at an unfair disadvantage. This forces owners to decide whether they want to keep their life's work in the family or sell it to the highest bidder.

If this bill were adopted, it would facilitate many more family business successions. It would also guarantee the retirement savings that business owners worked so hard to earn and enable more local businesses to prosper, which would strengthen the Canadian economy and local economies. We must never lose sight of the fact that SMEs are the cornerstone of our economy.

Everyone in the House knows a factory, a family restaurant, a corner store or a farm in their riding that has been around for generations. These family businesses are well liked and extremely important to the local economy. These small businesses are the backbone of our society. Some of these businesses not only help feed our communities, but they also provide important jobs for the people in our ridings.

The dynamic of keeping a family business in the family is unprecedented. The idea that an owner could be forced to sell their business to a third party simply because of overtaxation is simply shocking. When a third-party purchaser buys a business, many unknowns come into play. Will the new owner cut jobs? Will they move the business to a different region or even a different country? These are the questions the seller must keep in mind, but also their employees and family members.

We know that Beauce is a haven for SMEs. I will provide two real-life examples from my riding.

My first example is Eddy Berthiaume, the owner of Les escaliers de Beauce, located in my hometown of Saint-Elzéar, who was forced to make the difficult decision that I just explained to the House. He owned 50% of this business for many years. He is a good, hard-working man who spent years building his business. When he was ready to retire, he decided to sell his shares in the family business to his children, but unfortunately, he was unfairly forced to pay thousands of dollars in transfer fees. The worst part of this story is that his business partner was able to sell his 50% stake to a third party and pay a pittance in taxes. He paid essentially nothing.

Some may wonder how this is unfair. There are other examples like this one that show how the government is letting down business owners across the country. We need a government that is prepared to grant exemptions to Canadians and that does not penalize tenacious families like the Berthiaumes.

My second example is Estampro, a business in Saint-Évariste-de-Forsyth owned by the Fortin family, who dealt with the same rules for transferring the business to a family member. The business, which was founded in 1984, is already run by the third generation of Fortins. The family had to work extremely hard to get there, however. The time and money they spent on filling out forms for the transfer certainly could have been used to hire extra machinists or to make more progress on automation. Instead, the family was trapped in all of the red tape required by the existing legislation, and we cannot underestimate the impact this has had on the family. I spoke with them this week, and I know that they are seriously wondering what problems they will encounter if the business is transferred to the next generation.

I am sure many of my colleagues are aware of cases like these. There are many others throughout my riding. If the House does not act now, then wonderful, healthy, viable, proudly Canadian companies will end up in the hands of people other than the families that built them or, even worse, in the hands of foreign countries.

This bill will also help Canadian business owners by advancing women's entrepreneurship. Only 16% of businesses and 29% of family farms are majority female-owned. If the government stopped penalizing owners of small businesses and family farms who sell their businesses to their daughters, it would help foster entrepreneurship among women and increase their participation in the Canadian economy.

It is very unfortunate that our party is obliged to introduce bills like this one when we have a government that claims to always be there for women and small businesses. We need the government to get involved and quickly examine the issues raised by bills like this one.

This bill is not partisan in any way. I think that the amendments to this private member's bill are not only a matter of fairness, as many of my colleagues mentioned, but also a matter of common sense.

I cannot believe that this government has not already introduced amendments to the Income Tax Act in this area.

We need to treat business owners fairly. These tax policies are unfair when the time comes for them to step down from their family business. Leaving a family business can be a positive thing if they know they are leaving it in the hands of someone they love and, more importantly, someone who will love and honour the values and culture of the business, as the owner did for many years.

Business owners should not feel like they have to sell their business to a third party simply because it will cost them less. Business owners must also obey the law. We would not want them to make concessions or act fraudulently in order to save the hard-earned pension or retirement savings they would otherwise lose in taxes. That is why it is important that Bill C-208 pass in the House as quickly as possible.

I heard some of my colleagues say that changes to this bill could lead to more fraud and tax evasion. That is why our party wrote protection mechanisms into the bill. To forestall those potential problems, the bill provides that the family member purchasing the business must keep their shares for at least five years to avoid the penalty. This will thwart attempts to exploit the system.

Right now, and especially during this global pandemic, Canadian businesses need our help, not just to stay afloat while we fight the pandemic together, but also in the future when the time comes to sell and buy their family businesses. Canadians want to remain self-sufficient. They want to support their local businesses. Most of all, they want their local businesses to succeed from one generation to the next.

I hope the Conservative Party can count on all parties to vote for this bill, which is so important to our family businesses. I speak from experience, because I myself was part of the fourth generation of a family business.

Income Tax ActPrivate Members' Business

6:25 p.m.

Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the President of the Queen’s Privy Council for Canada and to the Leader of the Government in the House of Commons

Madam Speaker, I listened very closely to the comments that were made, and I know I will get two opportunities to respond: this evening, for a few minutes, and the next time this comes up for debate, when I will try to deal with a bit more of the content.

What concerns me is that members from different political entities in the House have tried to give an impression that I do not believe is accurate. We need to recognize that virtually from day one, the government and the Prime Minister have recognized the importance of small businesses, whether they are the family farms in our rural communities or the stores and shops in our urban centres and rural communities. We have seen this amplified over the last number of months in different ways. I encourage my colleagues on all sides of the House to, at the very least, recognize some of the ways we have done that.

This legislation talks about the issue of taxes, a sense of tax fairness and wanting to see family businesses continue on as much as possible through family members, in a fair fashion. On the issue of tax fairness, the government has demonstrated very clearly where our priorities have been, and we have seen significant tax changes take place.

I want to focus, in what little time I have, on an area of concern that members have talked about in the last hour.

Small business is the backbone of our Canadian economy. It even goes beyond our economy, to our society and lifestyle. It has been such a positive force for decades and will continue to be a driving force into the future. That is why, virtually from day one of the pandemic, we have invested so many resources, whether through the wage subsidy program, the rent assistance program, or working with banks so small businesses would have the leverage to get the loans that are necessary.

I see my time has expired. I look forward to continuing the next time the bill comes up for debate.

Income Tax ActPrivate Members' Business

6:30 p.m.

NDP

The Assistant Deputy Speaker NDP Carol Hughes

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.

Pursuant to an order made on Thursday, November 19, 2020, the House shall now resolve itself into committee of the whole to consider Motion No. 2 under government business.

I do now leave the chair for the House to resolve itself into committee of the whole.

[For continuation of proceedings, see part B]

[Continuation of proceedings from part A]

(The House in committee of the whole on Government Business No. 2, Mrs. Carol Hughes in the chair.)

Status of the French Language in MontrealGovernment Orders

6:30 p.m.

NDP

The Deputy Chair NDP Carol Hughes

I would like to begin this evening's debate by making a short statement on how the proceedings will unfold.

Tonight's debate is being held under Standing Order 53.1. It provides for a take note debate to be held following a motion proposed by a minister following consultation with the House leaders of the other parties.

The motion providing for tonight's debate was adopted by the House on Thursday, November 19, 2020.

Each member speaking will be allotted 10 minutes for debate, followed by 10 minutes for questions and comments. The debate will end after four hours or when no member rises to speak.

Pursuant to the order adopted Thursday, November 19, 2020, members may divide their time with another member and the Chair will not receive any dilatory motions, quorum calls or requests for unanimous consent.

Pursuant to the rules used in a committee of the whole, members are permitted to speak more than once, provided that there is sufficient time.

At the conclusion of tonight's debate, we will rise and the House will adjourn until tomorrow.

We will now begin tonight's take-note debate.

The hon. Leader of the Government in the House of Commons.

Status of the French Language in MontrealGovernment Orders

6:30 p.m.

Honoré-Mercier Québec

Liberal

Pablo Rodriguez LiberalLeader of the Government in the House of Commons

moved:

That this committee take note of the status of the French language in Montreal.

Madam Chair, I would like to be very clear from the start: French is the common language of Quebeckers. It is our official language in Quebec. It is the language of a proud and open people who live and sometimes survive in the middle of a sea of anglophones. It is also the language of a respectful people who defend the rights of linguistic minorities. It is a language that is both beautiful and fragile. It is our language that we share with thousands of francophones from every region in Canada. We must love, cherish, share and protect it.

Today, I will talk about the French language. I will obviously do so as the member of Parliament for Honoré-Mercier, government House leader and Quebec lieutenant, but first and foremost as a Quebecker, father, friend and huge fan of Quebec music and culture. French is not my first language, but to me, it is the most beautiful language in the world. It is the language of Quebec and Quebeckers. It is a language of giants. It is the language of extraordinary people like Félix Leclerc, Réjean Ducharme, Michel Tremblay and Gaston Miron. It is also a language that is our own, the language we speak every day, the language in which we love, laugh and cry. It is the language in which we keep in touch with our friends and ask, “Hey, how's it going, big guy? What's up?” It is the language I use every night when I call my daughter. It is the language in which I have fun with my buddies and chat with my colleagues. It is the language in which we tell each other, “Hang on, we can do it, we will soldier on and make it through”, a language of survivors.

It is the language in which we tell bedtime stories to our little ones to help them sleep, with varying degrees of success. It is the language in which we comfort them. It is the language in which we speak with our parents and grandparents and tell them we love them. It is also in French that I learned to play songs by Harmonium, Paul Piché and Beau Dommage on the guitar—again, with varying degrees of success, but with a lot of spirit. It is the language in which my father, my mother, my sisters and I were welcomed here and immediately felt accepted.

I remember that when I first came here, I could not understand a word. I spoke only Spanish. When I came here, I learned a single word, “ici”, meaning “here.” With only three letters, it was not too hard. I ran to one place and said “ici”, then ran someplace else and repeated “ici”, and so forth. Eventually, it got a bit repetitive. I understood that I needed to hurry up and learn a few more words if I wanted to make some friends to play hockey with and play outside with. I learned French, and I learned it quickly. I fell head over heels in love with the language. It is a complex language at times, but that complexity gives rise to the subtleties and nuances that make it so beautiful. It is for these reasons, and many more, that we must do everything possible to protect it.

French is declining in Montreal. This concerns me as a Montrealer, as a Quebecker, and I would say as a Canadian as well. It also concerns my colleagues in other parties, I am sure. It is gut-wrenching, because we see it, we feel it and we live it. We have to keep in mind that there is no simple solution. We cannot look for a panacea that will make everything better. No single measure will fix the problem all by itself. There is no magic bullet. I believe that any solution will require a healthy dose of courage, willingness and collaboration. I mention collaboration because, obviously, the Government of Quebec has a central role to play in protecting the French language.

We must work together because we can do a lot here in Ottawa to protect French in Quebec and elsewhere in the country.

The Speech from the Throne states that the federal government must protect minority language communities, be it our English-speaking friends in Quebec or our French-speaking friends outside Quebec, but that it must also protect French in Quebec. For the first time in the past 150 years, the government recognizes its responsibility to protect French in Quebec, even though it is the majority language there. It must be protected because of its minority status in the rest of Canada and North America.

Protecting French can be done in many different ways. One of them is the modernization of the Official Languages Act, and my colleague is working on that every day. She will have an opportunity to tell us about her work a bit later. Modernizing the act will allow us to do a lot. The act is already a powerful tool, but its scope will be expanded.

Then there is culture. By investing in culture, we invest in our language and our identity. We have more books, television programs and music in French. Is there a better way to learn our language than by listening to Michel Rivard, Daniel Bélanger or Cœur de pirate, by watching Tout le monde en parle, District 31 or Infoman—I am sure that Jean-René is watching us—or by attending a play at Théâtre du Nouveau Monde or Théâtre Jean-Duceppe?

Culture must be protected, and protecting French is protecting culture. It can be done in traditional media, but today we ought to go much further and extend the protection online because the world has evolved. That is exactly what we are doing with our broadcasting bill. We have to legislate to protect and promote French content online.

Much work also needs to be done internationally, through international institutions, so that French continues to spread its influence in the world.

We can also provide financial support, for example, by offering loans and subsidies to help our businesses in Quebec through this crisis. By giving them a helping hand, one way or another, we are helping small businesses in Quebec keep good jobs in Quebec. Quite often, these jobs are in French.

I believe everyone here acknowledges that we need to do more. We will do more, but we need to do it together. Individual actions by individual members of Parliament will not change everything. Governments can and must work together. Quebec is doing its share and will continue to do so, as will we, but all of us here must pitch in, as members of Parliament and as individuals. We have a responsibility, as individuals and as a society, to take action and rally together, to express our linguistic pride, to step up, to stand up for and promote the French language.

We can obviously defend and promote our language through big political gestures, for example by creating programs, but small, everyday actions are just as important. I would even say that there is no small gesture, just meaningful gestures in support of our language, such as buying Quebec music and reading works by one of our many authors.

I have been fighting from the moment I entered politics and will continue until I leave; I will not give up. I will always defend our language. There are 35 members from Quebec in the House and many more who will fight together. I am reaching out to my opposition colleagues. Let us work together.