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By Alice McFarlane

capital gains tax changes

CEI changes fall short of addressing capital gains tax hike

Aug 14, 2024 | 11:32 AM

Grain Growers of Canada said the federal government’s proposed enhancements to the Canadian Entrepreneurs’ Incentive (CEI) will benefit some grain farmers but don’t go far enough.

The revisions do not sufficiently address the substantial impact of raising the capital gains inclusion rate from one-half to two-thirds on primary food producers.

“Patchwork approaches and fragmented incentives won’t deliver the economic growth and support that Canada’s grain farmers and rural communities need,” the organization said in a news release yesterday.

The federal government’s proposed changes to CEI, which was rolled out in June, reduced the capital gains inclusion rate for eligible entrepreneurs to one third on a lifetime maximum of $2 million in eligible capital gains tax.

The government proposed to eliminate the requirement that the business owner must be a founder who has held at least 10 per cent of common shares since founding.

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GGC also stated the added complexity introduced by the CEI, alongside the increased inclusion rate, will drive up accounting and legal expenses for farmers, putting further pressure on their finances.

Feedback on the draft legislation can be emailed to consultation-legislation@fin.gc.ca by Sept. 11.

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alice.mcfarlane@pattisonmedia.com

On X: @farmnewsNOW