Mr. Speaker, I thank the member for Châteauguay—Saint-Constant for the thoughtful resolution that he has brought forward today.
I cannot help but refer of course, as members tend to do in this chamber, to my own family's background, which is, with my brother now in place on the farm, a fifth generation farm family. I have some very strong feelings emotionally about this resolution and believe at its heart it is good. It certainly has some technical aspects, which the minister's back-up over there has alluded to, but despite that fact I think there is more good in it than bad.
I would like to begin with my own personal experience on the issue of transferring farm assets. As the oldest in our family, when I graduated from high school my parents gave me a watch as a gift. When my sister graduated she was given a car. When my brother graduated he was given the farm. That is farm estate planning. That is how some families divide farm assets.
It works if the farm can be kept in the family and if there can be balance for other farm heirs and keep children loving one another and provide for the parents or the family members who are retiring. If a family can do those three things it has a good farm estate plan. If the family cannot, it does not.
Unfortunately, for many farm families cash is a big issue. As is the way of Liberal members who are in their ivory towers, most of them, unfortunately, are out of touch with rural situations. As the member alluded to in his comments, if farmers want a proper retirement income they should just buy RRSPs like everyone else. He does not understand the nature of farming or of farmers very well.
The principal investment that farmers make of course is back into their farms. It has been that way for years and, unfortunately, it has been increasingly necessary for it to be that way as the return on investment in the farming community over recent years has lessened. I could quote the statistics but I will not.
However there is less cash available. Many farmers are land rich, implement rich, seed rich or whatever but they are cash poor. Before I came to this place I was a chartered financial consultant by profession and I worked with farm families on establishing plans for the transference of their assets. I can speak with a little authority on the fact that this is a motion which will assist. It is not perfect and it does not pretend to be perfect, I am sure, but it does address a number of important issues. I think it is important that we appreciate that and support the resolution for that reason.
A 1994 study by StatsCan revealed that farmers invest a higher proportion of their savings back into farm assets than they do into RRSPs. That is no surprise to any of us who come from rural backgrounds. Therefore for many farm families their farm capital represents the bulk of their retirement funds.
There are a couple of aspects to this proposal that I would like to address. The first is the issue of capital gains.
The Liberal member, as is the tendency, unfortunately, defended the status quo rather firmly. However the status quo when it comes to the issue of the $500,000 capital gains exemption is not a status quo that deserves to be defended. That level has not changed for over a quarter of a century but farm assets have and farm values in terms of fixed assets, such as land, not uniformly but in general across the country, have appreciated in value so that now with regard to the capital gains exemption what once was exempt is not.
Therefore we need to address that change. The way to do that is to increase the capital gains exemption. I think that is an excellent idea and one that deserves support.
In doing a little research I always concern myself with what these proposals cost as does the Conservative Party. We want to make sure these are achievable measures that will work. However we also want to make sure that they fit into the context of our overall finances. I should mention the actual cost that this motion would incur if this measure were adopted.
We know that the Department of Finance estimates say the fiscal cost currently of the $500,000 lifetime capital gains exemption for farm property is about $220 million for 2004. It follows then that if we increase the exemption to $1 million, the maximum fiscal cost would be approximately that same amount of $220 million.
The member opposite said in his comments that this would only impact on a very few and used the class warfare thing, the rich farmers out there. The reality is quite clear to us from rural communities. We understand that farmland values have increased significantly in many areas across the last quarter century and that this is really catch-up is it not? This is really restoring the original measure and restoring the intent of the original measure.
I know this because the member very often speaks more for the Department of Finance than he does for the people of Canada. He certainly does not speak for the farm people of Canada. I know that he has raised the issue of preferential treatment for farmers. I know that the finance department would dearly love to do away with the $500,000 capital gains exemption entirely. I know, as a member of the finance committee, that we have been privy to some indications that is the attitude of members of the finance department and, I am afraid, given the increasingly urban nature of the diminishing number of Liberal members in this chamber, quite appreciably increasing in their ranks as well, the attitude that farmers should just pay like everyone else.
I will tell them this in a straightforward manner. I think they need to realize that the number of farms is diminishing and it is increasingly so across the country. It is in no one's best interest to have no one living in the communities between Montreal and Quebec City. It is in no one's best interests to have a half a dozen farmers living along the highway between Portage la Prairie, Manitoba and Regina, Saskatchewan. It is in no one's best interests to depopulate the rural parts of our country. It is in everyone's best interests to keep family farms in the hands of people who love the land, have an attachment to it and have a sincere desire and an appreciation for the quality of life and rural communities and a rural environment. That is in everyone's best interest.
Unfortunately, with the government we see too often a disrespect and a disregard for that reality. I think that is a shame.
I say by way of illustration that right now in this country there are fewer farmers under the age of 35 than there have ever been. Right now most farmers are over 50 years of age. In the next 15 years that number will appreciate considerably and over a third of farmers will be beyond retirement age in just a very short time.
How are they going to retire? Because they depend on the land and the farm assets that they manage, they are going to retire by selling those assets. Unfortunately, what that means is a further consolidation of farms and a further depopulation of the rural communities.
If we can take some steps today in supporting this resolution to support families staying in a place they love, that they appreciate and where they will invest and provide the prudent stewardship we need, I think that is a wonderful thing to do. I think it is a good and healthy thing for us to do for this country.
I want to share a couple of anecdotes because I think these are illustrative of the challenges that farm families face. I knew a family in a small community called Rathwell, which is in my riding. It is about a half an hour south of Portage la Prairie, which is my hometown where our farm is. When I came across this circumstance it was touching. What happened here was that a farmer in his late sixties suffered a heart attack and passed away. The family went together to read the will and the will read that everything was to be divided equally among three. His wife had predeceased him and so his three children shared that estate equally.
What was the estate? It was what he had spent his life doing, his farm. It went three ways: to his daughter who was married to a dentist in Victoria; to his son who lived in Toronto and is a computer executive; and the other third, I think members have guessed it, to his son the farmer. His son was a farmer. When his dad passed away this man, a friend of mine, lost not only his part, his best friend, his mentor but he lost his farm.
Today, we can take steps to ensure that this does not happen again. Rollover provisions and retirement savings programs that are available to farmers who do not have the income to qualify, in many cases to contribute to RRSPs, are a positive step.
I congratulate the Bloc member. Although the Bloc's separatism is abhorrent to me, I congratulate it on this positive step. This is a worthwhile motion to support and I thank him for bringing it forward.
