My name is Coralee Foster. I'm also from Mitchell, which is in southern Ontario.

I'm here today to bring two perspectives to the committee. I'm a partner with BDO, a national public accounting firm with offices in rural areas across Canada. I'm also part of the leadership of BDO's national agriculture industry group.

My own client base in Mitchell comprises primarily farmers and agribusinesses producing a variety of commodities. They range from small producers to large operators, but what they all have in common is that they are family farms.

I also bring with me personal experience. My family operates an 1,100-acre cash crop farm, which we successfully transitioned from my husband's parents to us. Our two adult sons represent the seventh generation to farm in Perth County, both within our existing operation and through their own ventures. We always structured our operations with a future transition in mind, should they choose to farm. We anticipate completing this transition over the next decade.

The meeting your committee had last week focused heavily on the capital gains rules. I don't want to delve into the technical details of tax policy, but I do want to express our industry's concern over the complexity and unpredictability of tax changes. I've been in public accounting for over 30 years, and each year the Income Tax Act has become increasingly complex and burdensome.

Our firm has a dedicated team specializing in tax reorganizations and succession planning. This specialization is necessary due to the rapid pace of regulatory changes and the complexity of the legislation. Smaller practitioners often seek expertise from firms like ours, because the regulatory environment is so challenging.

There is significant demand for succession planning across the country, but there are not enough qualified accountants to meet this need. This situation risks non-compliance or succession planning being done only in crises or after a death, and that rarely achieves the desired outcome.

Numerous tax changes have been proposed and subsequently amended, causing significant uncertainty and frustration for farmers and their advisers in trying to plan. Examples include the private corporation proposals, specified corporate income, Bill C-208, the underused housing tax, and trust reporting. The proposed capital gains changes from spring remain draft legislation.

These issues cause upheaval and necessitate quick and often inefficient responses. Accounting firms spend considerable time understanding these changes, educating staff and clients and implementing plans that ideally should be executed over several years, not just a few months. Planning is challenging without the stability of the rules. There are many skilled accountants and firms across Canada who have dedicated their careers to farm tax and would welcome the opportunity to be consulted on proposed changes in order to identify concerns in advance.

In addition to the unpredictability and complexity of income tax legislation, there are two specific areas where changes could be beneficial, based on what I see in my practice.

The first is extending the favourable intergenerational rollover provisions to apply to transfers to nieces and nephews in the same manner as they do to children.

The second is providing more options to transition from one farm operation to another without triggering a large tax burden. Expanding the existing replacement property rules to allow farmers to exchange land, all farm and agribusiness buildings, and quota more flexibly could create more opportunities for the next generation to bring in new income streams.

However, beyond tax measures, I believe that there are other impediments to farm transition that government policy could address.

The first is around financing. The cost of capital required to farm is significant. Fortunately, with intergenerational transfers, the debt is often partially funded with promissory notes held by parents, but this is usually the only way for the transaction to be financially feasible. Working capital presents a bigger challenge to new farmers. The number of interest-free advances under the current advanced payment program has fluctuated. Enhancing this program for new farmers to maintain a higher limit permanently or to provide other incentives could make it more accessible.

Education is another area. Farm kids often excel at operating equipment and handling barn chores from a very young age but frequently lack administrative, human resource, accounting and management skills. As farms grow more complex and larger, new owners need to be more adept. Funding for a wide range of existing and not necessarily government-created courses could help.

The final area is farm programs. AgriInvest, in its current form, does not provide a significant source of funding for farm operations, and AgriStability is unpredictable. In general, the programs could be more meaningful and simplified for the whole industry in order to be more beneficial to new farmers.

Finally, under a previous version of the Growing Forward program, funding was available to cover a portion of the costs for succession planning. While it may not have prompted clients to undertake work they weren't already planning, it did encourage some to do so sooner and more thoroughly.

I thank you for this opportunity today.