Madam Speaker, I got up in the House of Commons to speak about the capital gains increase and what it meant for Canadian farmers during question period. I thought I would take a few moments today just to explain to Liberals how farming actually works. I do not think they fully understand how it works over on that side, particularly when it comes to generational farm transfers throughout families.
We just finished harvest in Saskatchewan. Farmers plant the crop in the spring. There is a little work that goes on in the summer. Then in the fall, they take in the harvest. This happens year over year. That is the very simplified explanation of how farming works. The price of farmland in Saskatchewan in 1996 was about $360 to $390 an acre. In 2024, it is $3,190 an acre.
We can look at how expensive it has gotten to buy farmland in this country, particularly in my home province of Saskatchewan. We also have the capital gains tax increase from 50% to 67%. The Grain Growers of Canada calculated, when factoring in all the variables, that this amounts to about a 30% tax increase on the sale of farmland.
Farmers do not have a defined benefit plan. They do not have a pension plan. Their retirement savings is the sale of their farm when they get to retirement age. The Liberal member who is going to reply to this is going to get up and say the Liberals increased the lifetime exemption to $1.25 million. Yes, it is true they did that.
However, on top of that, when somebody sells their farm, once they clear that number, that is where that new tax rate kicks in. That is why the Grain Growers of Canada said it is about a 30% tax increase when it was 50%, and now it is at 67%. That is where that number comes from.
We can look at the valuation of farms and the way it has gone. I know people will say good for farmers that they can sell their land for that much money, and they can have a wonderful retirement. The reality is the cost to buy farmland, seed inputs, machinery, semi-trucks and everything that someone needs on their farm or on their ranch in order to make their business run has skyrocketed exorbitantly.
However, the value that farmers get for the crops they sell has been roughly the same over the years. There are fluctuations in the market because it is a global market. Prices go up and prices go down for what farmers can sell their crops for and what they can contract it for. However, the costs are always going up and up when it comes to the machinery they are purchasing.
Farmers have to pay off banks for the debts on their land. They have to pay off the debts on their machinery. They have to pay off the debts on their house. They have to pay all this stuff off with the money that they get from the sale of their farm. The government is now going to be taking 30% more off the top of that.
How is a farmer expected to have a fulsome retirement when the government is taking 30% off the top with the new capital gains tax increase?