CFIB backs bill to allow small businesses to be passed on to next generation

Toronto – A new private member’s bill promises to address a significant and costly flaw in Canada’s succession planning rules and would save Canadian small business owners hundreds of thousands of dollars when transferring their business to a family member, the Canadian Federation of Independent Business says.

NDP Member of Parliament Guy Caron’s bill proposes amendments to the Income Tax Act that will ease the tax burden on business owners seeking to pass their business on to their children or grandchildren. Under the current system, it is easier to sell to a third party than it is a family member, the CFIB said in a news release.

“Many small business owners are telling us that tax rules discourage them from passing on their firm to their children and encourage selling to a stranger,” CFIB president Dan Kelly said in the release. “Mr. Caron’s bill addresses this unfairness and will help small business owners ensure their firm remains locally owned, creating and protecting local jobs. CFIB commends Mr. Caron and the NDP for their leadership on this important policy.”

Only half of small business owners have a planned succession, and of those, 76 per cent plan to exit their businesses in the next 10 years, according to the CFIB. The CFIB has long supported such legislation, including a private member’s bill introduced by Liberal MP Emmanuel Dubourg in the last Parliament.