Rising farm land values creating barrier to young farmers, Senate says
Raising capital gains exemption among recommendations to keep farmland in hands of Canadian farmers
A Senate committee is making recommendations on how the to curb the rising cost of farmland.
The concern is prices are getting so high young farmers can't afford to get into the industry, and farmers
selling are facing huge capital gains taxes.
About 60 people contributed information to the report released on March 19.
P.E.I. Sen. Diane Griffin, who is chair of the Standing Senate Committee on Agriculture and Forestry, said provinces should be protecting existing farmland.
"The problem is the land costs are accelerating," she said, noting interest from foreign buyers and non-traditional investors, such as pension funds, are making it more difficult for young farmers getting into the business.
With larger investors buying farmland, the concern is farmers will go from owning the land to leasing from institutional investors and foreign owners.
"I think what's at stake is what's going to happen to the land in the future," she said. "I think we're going to see more corporate ownership, now fortunately P.E.I. is lucky with its maximum land owner's size that they can only have 3,000 arable acres ... but a lot of times elsewhere in the country, there are no such limits."
While the Senate doesn't have jurisdiction over land, which falls under provincial legislation, the committee made five recommendations for helping farmers. Griffin also said the federal government can make changes on taxes and municipalities have a role to play in their zoning bylaws.
"All levels of government have an important role to play in terms of things they can do," she said. "We've recommended there be greater co-operation and greater sharing of technology, it could be for something as simple as producing soil maps or it could also be for keeping track of what land is being kept in farmland."
The report recommends increasing the million dollar capital gains tax exemption farmers get when they sell their property.
"There are a lot of farms, especially larger farms or farms near larger cities, that are worth well over that and therefore it makes it more difficult for intergenerational transfer and it also makes it more difficult for the farmer to sell to anyone else ... because they're going to have to pay that farmer a higher price because he is going to have to pay capital gains on any profit he makes over the $1 million exemption."
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With files from Island Morning