Family farms and small businesses in Central Alberta could take a big hit if proposed tax reforms on private corporations move forward.
Earlier this summer the federal government unveiled new proposed tax rules aimed at private corporations. Some of those rules include disqualifying capital gains earned by minors and restricting the use of family trusts for the exemption, which would impact farmers’ retirement and farm succession plans.
This is something Red Deer County Mayor Wood is not happy about, as a majority of the land within the municipality is farm land.
“It’s unfortunate the federal government is taking aim at the people that produce the food for the people of our country,” he said.
The government says the reforms are aimed at people who use private corporations to avoid taxes.
As a farmer himself, Wood would feel an impact if the tax reforms did move forward, he said.
“I’m only one of thousands of farmers within our municipality,” he said. “Farming is the lifeblood of Red Deer County and we have a long history of farming – we’re a farming community.”
In a letter to clients and agriculture groups across Canada, farm tax specialist Allain Sawiak with Edmonton-based firm KRP said these reforms would create more taxes to pay for family farms, a more complex succession plan and more complex estate planning.
Small businesses would feel an impact in terms of increased taxes if the reforms were to be approved, he added in the letter.
The Red Deer Chamber of Commerce “is very concerned about the proposals that have been put forward,” said Chamber CEO Robin Bobocel.
About 80 per cent of the businesses in Red Deer are small business, Bobocel said.
The tax reform would “potentially have a huge impact on Red Deer businesses. Whether it’s a flower shop, a tire shop or a multi-million dollar operation that employs 50 people, it’s going to have an impact.”
Bobocel said it’s a complex issue and not a lot of information has been released, so the chamber is actively looking into it a little more. The chamber will be submitting an official response to the proposed reforms soon, he added.
Heading into the deadline for public comment on Oct. 2, Red Deer MP Earl Dreeshen said he has been speaking with tax lawyers and accountants to see just how significantly the reforms would impact farmers and small business owners.
It’s important people who will would affected have their voices heard, he added.
“We have to make sure people realize this is happening and give them a chance to go to the finance department’s website and let them know what their thoughts are,” said Dreeshen.
To voice your opinion or to read more information about the proposal, visit www.fin.gc.ca.