Thank you for the opportunity to present on behalf of the Canadian Cattle Association, CCA, in your study on intergenerational farms and new entries.

My name is Jack Chaffe. I'm co-chair of CCA's domestic agriculture committee and past president of Beef Farmers of Ontario. Along with my family, I own and operate a beef feedlot in southwestern Ontario.

Today I'm joined by my colleague Ryder Lee, who is online. He is general manager of the Canadian Cattle Association. Also, as an observer in the back, I have my son here, who is lobbying on behalf of the National Cattle Feeders' Association today in their lobby day.

CCA is a national organization representing Canada's 60,000 beef producers. The Canadian beef industry is a significant driver of our economics and a global leader in sustainability, contributing $21.8 billion to Canada's GDP and supporting approximately 350,000 full-time equivalent jobs. A prosperous and thriving beef industry generates considerable economic, environmental and social opportunities and benefits for Canada.

CCA has been extensively engaged in discussions on intergenerational farm transfers and succession planning for several years through advocacy on Bill C-208 and its amendments in several budgets since.

I would like to begin by emphasizing the smooth intergenerational transfers on beef operations within farming families are critical to maintaining the sector's reputation as a major contributor to global and domestic food security.

However, CCA is concerned about recent changes to the capital gains measures, as announced in budget 2024. It will increase the requirement to sell off pieces of farms with these changes. The federal government needs to ensure that this does not happen and jeopardize the current tax policies that allow continuing of the intergenerational transfers of beef operations within families. These include mechanisms such as employment ownership trusts and small business corporation shares.

We emphasize and are concerned about the lack of meaningful consultation time in advance of this announcement in the budget. Beef producers did not have time to analyze the changes and their impact on their family operations. It is important that the government recognize the undue consequences of each operation. It is difficult to quantify the changes of the sector within the proper consultation time.

We also have concerns about the impacts of the inclusion rate, despite the changes announced on August 12. While we are pleased to see the changes in lifetime exemptions, the other amendments to the measurements are counter to the announcements in Bill C-208 and to the amendments in budget 2023. By increasing the capital gains inclusion rate, the federal government risks weakening the provisions under Bill C-208 that facilitate smooth intergenerational farm transfers to the younger producers.

The majority of Canadian cattle farms operate under family-run businesses. Each farm has its own unique operational structures. To address the vast differences between those structures, producers need greater clarity regarding the changes between August 12 and those announced in budget 2024.

As our sector continues to adopt and create new business structures, such as those where aunts, uncles, nieces and nephews are now working together, we need to ensure that these new structures are realized and reflect the government's tax policy when it comes to succession planning. By recognizing these new realities, the government can demonstrate that it is meeting the needs and expectations of our sector and not jeopardizing the existing exemptions at a time when we need all tools at our dispose to streamline asset transfers to that next generation.

To close, our sector is at risk of losing a significant portion of the workforce, as farmers may retire without a viable succession plan. This also places Canada's rural economy at risk of declining. We need to ensure that government policies do not unintentionally contribute to the decline in agricultural production in Canada.

I'd like to thank you for having me appear, and I look forward to answering questions.

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