Budget 2015 - a mix of pluses and minuses for agriculture

Sunday, June 7, 2015

The increased lifetime capital gains exemption was welcomed by the CFA, but less was said about the ongoing cuts to agricultural research and risk management programs

by BARRY WILSON


As MPs and senators steam ahead through June to wrap up loose ends before a parliamentary adjournment that will set the stage for an October federal election, Canada's farmers have reason to keep an eye on Parliament Hill proceedings.

A key piece of legislation to be pushed through by the last week of June is the 2015 budget bill that will implement a key farm lobby demand over many years and an important farmer benefit – an increase in the lifetime capital gains exemption for farmers to $1 million.

Finance minister Joe Oliver announced the decision in his April budget, promising that the 23 per cent increase in the capital gains exemption beginning this tax year will save farmers selling or transferring farms to the next generation $50 million over the next four years.

In the big income and government financing picture, it is small potatoes, but farm leaders quickly applauded the announcement as an important incentive to encourage and make possible retirement and inter-generational transfer of farms.

"One of the most significant items for agriculture in this budget is the increase to the lifetime capital gains, which CFA has been advocating for some time," Canadian Federation of Agriculture president Ron Bonnett said on budget night. "Last year's budget saw a small increase in this area, but the funds allocated this year will have a more meaningful impact."

It represents a doubling of the capital gains exemption since 1988, the latest in a series of incremental increases legislated by Conservative governments since 2007 and part of a Conservative strategy of targeted programs that appeal to key constituencies.

The 2015 budget includes other small baubles for a farm community that has largely been loyal to the Conservatives for more than a decade – a promise of more trade deals that will help agricultural exports, a lowering of the small business tax rate to nine per cent from 11 per cent and a promise to lower business employment insurance premiums eventually, although none of those latter promises are guaranteed to provide bankable cash anytime soon.

It is a far cry from federal budgets past that often were the forum to announce major injections of farm income bailout money, big farm policy pronouncements, increases in government spending on the sector or significant policy changes, including the 1995 budget that heralded the end the iconic Crowsnest Pass grain freight rate program for Prairie farmers.

These days, agricultural impacts in budgets seem more mundane, more tinkering, more small-change in the bigger picture.

And of course, not mentioned in April were ongoing cuts to agricultural research and diminished coverage for farmers under the latest version of the Growing Forward suite of business risk management programs implemented in 2013 after federal-provincial negotiations.

But, then, no one could have expected the government to highlight cuts. The budget gave Conservative election candidates in the autumn campaign their talking points that were quickly trotted out in the House of Commons by junior agriculture minister Maxime Bernier the day after Budget 2015.

New Democratic Party deputy ag critic Ruth Ellen Brosseau condemned the government plan as "just another fine example of the Conservatives' lack of understanding of the agriculture and agri-food sector. A 25 per cent budget cut for the Department of Agriculture and Agri-Food over the next few years means sacrificing services for producers and the agriculture sector."

Bernier shot back. "On the contrary, the agri-food sector, farmers, small business owners and Canada's middle class, everyone benefits from this budget because we are lowering their taxes," he said.

Expect to hear that message often over the next four months, brought to you with taxpayer-financed advertisements foisted on you by the Government of Canada.

And Conservative election strategists are confidant most farmer voters will agree. BF

Barry Wilson is a member of the Parliamentary Press Gallery specializing in agriculture.