Madam Speaker, this magnificent Monday morning, we have the good fortune to be talking about the bill introduced by my colleague from Rimouski-Neigette—Témiscouata—Les Basques. I gather from members' remarks that there is broad consensus around this bill. The only concerns I have heard people express from the start have to do with the cost of the bill. Barring petty partisanship, I see no reason why we should not send this bill to committee after the second reading vote for a closer look at its real costs. This bill is very important to the economy and to the development of both Quebec and Canada.

Everyone knows our society is aging. We are facing major changes to which we will have to adapt quickly and as best we can. We are used to analyzing health and education issues and changing our policies on the basis of demographic trends, but there is just as much urgency in other sectors that tend to be ignored. That is why I think my colleague's bill, which tackles one of the most significant generational shifts, is so important.

By 2020, as many as 350,000 business owners will be 50 or more and will be considering selling or transferring ownership of their business to a family member or selling it to a stranger. With the population aging, it is reassuring to see that the next generation of entrepreneurs is available, skilled, competitive, and ready to face the challenges that come with taking over the reins from the previous generation.

Why are so many businesspeople raising their concerns with me over entrepreneurial succession? Well, they have done the math and they recognize how unfair the difference can be in the sale of a business to a family member or to a third party. Although my colleague's bill is not the first to address this issue, it is by far the most comprehensive and deserves the support of all parliamentarians in the House.

However, for the uninitiated who are following the debate and who are not aware of the problem, let us try to sum up what it means to transfer a business. If business owners want to get out of the business world, then they have two choices. They can sell their business to one of their children, thereby ensuring that the business remains family-run and deriving satisfaction from the act of passing down the business from one generation to the next. The owner gets to see his or her efforts carry on. The second choice in principle is just as commendable. The owner can sell to a stranger. It is easy to say that this is a personal choice and that everyone is free to make their own decision. However, that is less true when we know that both avenues do not produce the same profits from a sale at the same price.

At this point in time, if the business person sells their business to a stranger, the difference between the sale price and the original price is considered a capital gain taxed at between 23% and 29% by the provinces and also benefits from a tax exemption of about $824,000. However, if the owner sells his business to one of his children, the same difference between the sale price and the original price is considered a dividend, which is taxed at between 35% and 51%, depending on the province, and does not benefit from a tax exemption.

To put it simply, the owner who sells his business for $1 million and reports a capital gain, compared to the owner who reports a dividend on the same amount, would come out ahead by about $306,000. We have to admit that makes selling to a family member somewhat less appealing.

This is what Bill C-274 would do. It would allow the owner and buyers from the same family to enjoy the same rights and privileges resulting from a transaction between two people without any family ties. Consequently, Bill C-274 would help keep businesses in the hands of local people, foster entrepreneurship, and contribute to the creation of local jobs.

What is more, in order to prevent any type of tax avoidance, an argument that members have been raising since this morning, my colleague had the foresight to include an obligation in the bill under which the family member who purchases the business must remain the owner for five years following the transaction. We are not the only ones who are saying that it is high time to eliminate this unfair business transfer tax.

Since I am running out of time, I will not read the incredibly long list of people who support my colleague's bill. I must admit that I do not see what reason any member would have to vote against a bill that has garnered so much support. I therefore hope that Bill C-274 will be sent to committee, because we are always open to making necessary improvements. I also look forward to the day when the House will send a clear message to entrepreneurs across the country telling them that they can sell their company to whomever they choose and still pay the same rate.

Need I mention that I strongly urge all members of the House to vote in favour of the bill introduced by the member for Rimouski-Neigette—Témiscouata—Les Basques?

Robert Aubin

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