The Cariboo Regional District (CRD) is writing to both its local MPs to ask them to support a private members bill in parliament that the region’s area directors consider unfair to families.
CRD chair Al Richmond says the board has decided to send letters to Cariboo-Prince George MP Todd Doherty and Kamloops-Thompson-Cariboo MP Cathy McLeod urging them to support Bill C-274 to end unfair taxation on family business transfers.
The bill calls on the federal government to give owners and buyers in the same family the same rights and privileges currently extended to non-related persons involved in a transaction, Richmond notes.
“It’s taxed differently. It would appear that it’s an unfair tax advantage to sell it to somebody else, rather than a family member.”
The revenue difference between a purchase price and a selling price is taxed as a capital gain for unrelated private individuals, yet selling a family farm or small business to a son, daughter or grandchild is considered a dividend – and taxed at a higher rate, he explains.
“We think transfers to family, of land and businesses, should be easier to do – or at least as easy as someone that’s third party – to encourage these kids’ families to carry on with the family business.”
Richmond says that quite often, family businesses have a long history in the community, and the area directors wish to see this legacy continue.
“We want to try to make it so that they are treated the same, whether you sell it to a member of your family, or sell it to another person – particularly when you are trying to encourage families [operating] ranches and farms, with young people to take it over, to make it as easy as possible for them to do that.”
NDP finance critic Guy Caron, an MP based in Quebec, put forward private members’ Bill C-274.
In his outline letter to the CRD, Caron says the current system “makes it highly disadvantageous to transfer a business to a family member.”
This is because a family transaction does not include the right to a lifetime exemption, and is, therefore, more heavily taxed, he explains.
The bill seeks to facilitate the transfer of small businesses, family farms and fishing operations between members of the same family, Caron says, adding “this unfair situation penalizes our small businesses, family farms and fishing operations.”
While this transfer tax system is “discriminating,” Richmond says because it’s a private members’ bill (which don’t often become law), there’s always that potential government may not pay due attention to it.
Therefore the CRD directors are asking the area MPs to help support Bill C-274 in Parliament.
“Hopefully, they will understand it is in the best interest of business, and in particular families, and that we want to see them continue to run family businesses.”
