of federal budget The proposal, tabled by Finance Minister Chrystia Freeland on Tuesday and featuring changes to the way capital gains are taxed and federal funding for biofuel production and the development of artificial intelligence, will be tackled by agricultural groups. Many of the topics and programs I was hoping for were not mentioned.
The plan includes many previously announced increases to the interest-free portion of farmer cash advances for 2024, a promise to consult on interoperability between different brands of farm equipment, and funding for the National School Lunch Program. It also includes measures.
Overall, the budget project projects a $39.8 billion deficit in 2024-25, with tax increases offsetting spending increases. Debt servicing will take a big chunk of the pie, with debt servicing expected to exceed $50 billion, accounting for about 10% ($54 billion) of total government spending between 2024 and 2025.
What is the agricultural budget?
Below is an overview of those highlighted in the budget that may be relevant to the farming community.
- Expansion of capital gains tax and lifetime capital gains exemption amount
– The government plans to increase the inclusion rate (taxable portion) of annual capital gains from one-half to two-thirds from 25 June 2024. For individuals, the higher tax rate applies only to capital gains over $250,000. The tax rate for capital gains under $250,000 is 1/2. The higher two-thirds tax rate applies to all capital gains realized by companies and trusts.
– The government says the higher capital gains tax rate will only apply to 12% of corporates and 0.13% of individual income tax filers, but will bring in around $20 billion in new tax revenue over the next four years. It is expected.
– The lifetime capital gains exemption, which currently allows Canadians to exempt up to $1,016,836 in capital gains tax-free on the sale of small business shares and agricultural and fishing property, will change from June 25, 2024. Effective date, the amount increases to $1.25 million. After that, it will continue to be linked to inflation.
– The Canadian Federation of Agriculture welcomes the increase in the lifetime capital gains exemption, but says it is concerned that increased inclusion will make intergenerational agricultural transfers more difficult. - Caching changes
– $64 million in 2024-25 to help increase the interest-free limit on prepayment program loans from $100,000 to $250,000.Previously announced.) - interoperability
– The government plans to launch an interoperability consultation in June, which will “enable farmers to use their equipment in any environment”.
By reducing the technical barriers between different brands of equipment, we enable the best practices for your farm. Last year’s budget A similar pledge was also included.
– The City of Ottawa also called on provinces and territories to amend their contract laws to support interoperability, while “commending the progress Quebec has made in supporting consumer protections, including for farmers.” There is.
– The budget mentioned interoperability as a measure to address rising food prices. According to page 141 of the budget, “If farmers have to purchase new and expensive equipment to grow food, costs may increase and be passed on to the accounts.” - artificial intelligence
– $200 million over five years from 2024 to 2025 to help AI startups bring new technologies to market and accelerate AI adoption in critical sectors such as agriculture, clean technology, healthcare, and manufacturing. To accelerate. - clean fuel
– The government plans to spend up to $500 million annually from clean fuel compliance payment revenues to support biofuel production.
– Ottawa also plans to restructure the Clean Fuels Fund to provide funding more quickly and extend the fund for another four years, from 2029-30. A total of $776.3 million will be deployed over the next five years.
– Canada Infrastructure Bank plans to invest at least $500 million in biofuel production. - Farm Credit Canada’s Mission
– The government will issue new incentives to Farm Credit Canada, Export Development Canada and other Financial Crown corporations to mobilize more capital and take on greater risks to get more support to Canadian businesses in need. It states that it provides guidance. Specifically, it says the FCC should “continue to pursue opportunities to support agri-food and agribusiness, including through venture capital investments and further deployment of technologies to mitigate climate change.”
– The government plans to amend the Canada Agricultural Credit Act to require periodic legislative reviews to ensure that the FCC’s activities are consistent with industry needs. - Carbon tax rebates for small and medium-sized businesses
– The government announced that it will return more than $2.5 billion in carbon tax revenue collected over the past five years to an estimated 600,000 businesses with fewer than 500 employees in states subject to the federal carbon tax. Canadian Controlled Private Corporations (CCPCs) that issue T4s in Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador are probably incorporated farms. This includes a refundable tax credit. Depending on the number of employees in each tax year. Based on language in the budget document, this would be separate from the existing fuel tax credit for farmers, which is based on the total amount of eligible farm expenses (1.86 per $1,000 of expenses in most cases in 2023-24). dollar tax rate). - Possible changes to livestock tax deferral
– The budget notes the importance of livestock tax deferrals in supporting farmers affected by natural disasters, and the government “works with industry partners such as the Canadian Cattle Association (CCA) to “We are committed to finding ways to reduce taxes,” the statement read. We help farmers get help faster and more efficiently when they need it. ”
– CCA said it was “cautiously optimistic” about the recognition of livestock tax deferrals in the budget, noting that it was calling for changes to the budget proposal. income tax law Covers all classes of cattle and allows producers to choose if they need to use deferrals. “Beef producers are encouraged to consider deferring livestock taxes in Budget 2024, which will bring meaningful change quickly as Western Canada begins another extremely dry season,” said CCA President Nathan Finney. “I hope that this will happen,” he said, noting that this reference was a “suggestion.” The government will make reforms and work with ranchers to find solutions to address the challenges of extreme weather for producers across the country. ”
What’s not in your budget?
The accelerated investment incentive, which allows faster depreciation of capital purchases, does not appear to have been updated.
The budget bill does not specifically mention plans for the long-awaited update. canada grain lawto the dismay of farm organizations including the Grain Growers of Canada (GGC) and the Western Canadian Wheat Growers Association.
GGC also said it was disappointed that the budget did not include the extension of the enhanced rail interchange trial announced last year, investment in trade-enabling infrastructure, and investment in grain-related research and development.
“Budget 2024 misses the mark in recognizing the importance of expanding Canada’s food production and supporting profitability for grain farmers,” said GGC Executive Director Kyle Larkin. “One of the best ways to support this sector is through innovation in plant breeding, which budgets simply cannot accommodate.”
The Canadian Federation of Agriculture praised the start of interoperability consultations, implementation of the previously announced carbon rebate for small businesses, and recommitment to funding for temporary improvements to the prepayment program, but no mention was made. I was disappointed. These include investing in environmental programs, chronic labor issues in food production, and improving transportation and trade infrastructure.
“If Canadian agriculture is to realize its full economic and climate potential, we must seize the opportunity while our international competitors continue to invest in the agricultural industry,” said CFA President Keith Currie. I can’t continue.”
Wheat producers also noted the lack of new funding for the Pest Management Regulatory Agency.
“The federal government has once again missed an opportunity to support agriculture and farmers,” said Wheat Growers chairman and Saskatchewan farmer Darryl Franceux. “The real issues impacting us are the cumulative impact of carbon taxes on everything we do, the increased need for coordinated grain research, increased funding for the PMRA, and the Canada Grain Act. It is about making the industry more efficient by improving the
The Trudeau government has previously announced new climate-related programs in the budget, particularly new funding for initiatives such as the Farm Climate Action Fund (OFCAF), the Agriculture Clean Technology Fund, and the Sustainable Agriculture Strategy. It wasn’t mentioned. .
RealAgriculture will feature and analyze more budgets in the coming days.
Editor’s note: This article has undergone multiple updates to include new information and quotes.
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