Federal Finance Minister Bill Morneau announced another change Thursday to his controversial tax proposals to address the concerns of farmers and fishers.
Morneau made the announcement at a farm alongside Agriculture Minister Lawrence MacAulay in Erinsville, Ontario
Morneau said the government is abandoning the proposed tax reform that would have restricted the conversion of income into capital gains.
This was the proposal that would have made it more difficult for farmers and other business owners to pass on their businesses to their children.
Proposed reforms had raised fears they could add significant costs for some business owners who hope to keep certain types of businesses — like farms — in the family.
The federal government’s initial announcement to ‘passive investment’ received a lukewarm response from Saskatchewan’s agriculture sector.
Finance Minister Bill Mourneau had said a threshold of 50-thousand dollars of passive income investment could be sheltered each year.
Todd Lewis, the President of the Agricultural Producers Association of Saskatchewan said 50-thousand seemed low for investments in agriculture.
“Just a first blush, the 50-thousand maybe seems a little low for most agriculture operations, but Mr Mourneau says he is going to listen to what farmers have to say and he’s heard a lot and hopefully he keeps listening to it,” Lewis said on Wednesday.
Morneau has already said he’s listened to the worries and technical fixes were likely on the way to address the issue.
Earlier this week, the government also ditched another proposed measure that would have had a negative impact on the intergenerational transfer of family businesses.
Morneau also announced this week he will scale back a proposal to crack down on passive investment income, which was one of the most contentious elements of his plan.
The Liberals are continuing their week-long effort to adjust the proposals in hopes of calming angry entrepreneurs, doctors, farmers, tax experts and Liberal backbench MPs.
(With files from CJWW, CP, Jim Smalley)