It would be an understatement to say that the recent Liberal tax reform proposals have caused a stir. A poorly thought out political move to increase their middle class voting share, the Grits have successfully upset a population of guaranteed voters; doctors, dentists, tech start-ups and…farmers.
Most of our farmers at the Beechwood Market have been a bit busy as of late pulling weeds, swimming in floods and driving an hour into City markets to digest the announcement. Although summer was selected to quieten the blow, farmers did take notice. Those with legitimate succession plans based around the current rules have just been told that everything may change. They’ve been told that they may now have to redo their entire plan, pay more in lawyer fees, get their advisors back in, revise their banking agreements, essentially, revamp their futures.
In addition, they may now have to prove their daughters helped out on the cattle feed, that their son should be compensated for suffocating in fumes while shovelling chicken poop or that their brother is indeed employed to do custom work. This is due to the impending Reasonableness Test. In a supremely Orwellian move, the Liberals want to analyse farm operations in order to determine which family members are worthy of pay and a piece of the farm pie. The grey area created by such a policy worries me. The ever-thinning line between privacy and bureaucracy. I lived through the Quebec government’s Domicility criteria in the 1995 Referendum. Although I qualified as a voter, I, and 400 out of Province classmates, was not allowed to vote. I can tell you this, mostly private operators, farmers are already weary of outsiders asking questions. The likelihood of quietly allowing an agent from the Department of Reasonableness onto their property is pretty low.
Canada offers the small business deduction for those starting up. 98% of Canadian farms are family farms, therefore, fall into the small business category. They need every advantage they can nab to keep feeding us. Should there be additional corporate benefits such as income sprinkling and passive investments? Not for me to say. But, I am sure of this - encourage small business. Because, one day, those small businesses (under 100 employees) may grow into something bigger. You’ll never know unless you apply the right fertilizer to grow the best playing field.
The irony is that the liberals’ strategy was to perhaps swallow up some of the left vote by ostracizing middle-right voters. In a backward fashion, it may have been working. Enter Jagmeet Singh. The embodiment of NDP programs and values, he is sure to steal much of that left away from the Liberals. Back to the drawing board.
I think we’ll see the larger parts of the tax reform proposal pushed to the backburner until 2019. Some of the minutia may be implemented, but most of those pieces will drown in incomprehensibility. Regardless, the damage has been done. This will be a tough one to reel back in. I know farmers will be too busy to listen to attempted retractions.
Rural Canada is already pretty blue. Expect that blue to get even deeper.