“(This) is a responsible measure that will reduce operating costs for truckers and businesses in the food, agriculture, housing, construction, and delivery sectors,” he said.

In a news release, the federal government said it intends to introduce amendments to the Excise Tax Act that would temporarily suspend the application of federal fuel excise taxes on gas, diesel and aviation fuel.

The excise taxes are currently set to 10 cents per litre on gas and four cents a litre on diesel fuel and aviation fuel. Once the suspension expires, the excises taxes will return to those amounts.

The federal government estimated that the tax suspension would provide more than $2.4 billion in total tax relief.

Truckers pleased

The Canadian Truck Operators Association welcomed the announcement. In a statement, the association said it had raised concerns in late March when diesel prices exceeded $2.39 per litre in parts of the greater Toronto area.

“For many small carriers and owner-operators, every cent matters. This measure will provide meaningful short-term relief and signals that government recognizes the challenges facing an essential industry,” said association spokesperson Tej Dulat.

The effectiveness of the measure will depend on how efficiently fuel costs reductions are reflected across the supply chain, the association said. It will be important that fuel costs reductions are clearly reflected at the pump.

Provinces may consider similar short-term measures, Dulat added.

-With files from Reuters

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On March 27, federal Agriculture Minister Heath MacDonald announced that the government will propose amendments to the Income Tax Act to extend the income tax deferral period for livestock producers in Alberta, Saskatchewan and Manitoba.

Eligible producers received compensation for their animals to be destroyed due to bovine tuberculosis in 2024 and 2025.

This action is a response to concerns from livestock producers about the challenges of replenishing their herds during the same tax year that they received compensation.

Under the Health of Animals Act, the Canadian Food Inspection Agency provided compensation to livestock producers whose animals were destroyed in 2024 and 2025 due to the bovine TB outbreak.

A section of the Income Tax Act allows for only a one-year deferral, but the proposed amendments will allow livestock producers to defer compensation for a prescribed schedule from 2026 to 2030, enabling them to have greater flexibility to manage their incomes and sustain their operations as they rebuild their herds.

Producers who received amounts as compensation in 2025 or 2026 under the Health of Animals Act because they had to destroy their animals due to tuberculosis outbreaks will have the option of including those amounts in income for tax purposes as follows:

• Up to 100 per cent of the compensation deferred to the 2027 tax year, with at least 83 per cent included in income in 2027.
• Up to 17 per cent of the compensation deferred to the 2028 tax year, with at least nine per cent included in income in 2028.
• Up to eight per cent of the compensation deferred to the 2029 tax year, with at least four per cent included in income in 2029.
• Up to four per cent of the compensation deferred to the 2030 tax year, with the remaining four per cent included in income in 2030.

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“These are challenging times, and KAP will continue working with the provincial government to advocate for Manitoba farmers,” Hornby said, adding that continued funding for loan programs, veterinary initiatives, improved insurance coverage, and new trade initiatives are all good news for the industry.

Risk management and lending improvements

The province’s budget, announced by Finance Minister Adrien Sala on Mar. 24, includes $143.7 million for business risk management programs, alongside expanded lending limits, new insurance incentives and continued cost controls such as a freeze on Crown land lease rates.

Vet recruitment funding welcomed by farm groups

Manitoba Beef Producers (MBP) and KAP also welcomed new funding to support the Veterinary Medical Services Strategy, including $201,000 for tuition rebates, $100,000 for a veterinary recruitment program aimed at bringing newly licensed veterinarians to rural Manitoba, $50,000 for clinical mentorships to support internationally educated veterinarians, and $221,000 for the VetSTEP program.

“As a partner in the creation of the Manitoba Veterinary Medical Services Strategy, new funding focused on veterinary recruitment in rural areas and for clinical mentorships for internationally educated veterinarians, as well as increases to tuition rebates and summer employment opportunities, will help with addressing the veterinary shortage.”

— KAP president Jill Verwey

Beef producers applaud Crown land freeze and lending expansion

MBP also applauded the Crown land rental rate freeze (extended to 2026 last fall), support for the Livestock Predation Prevention Program, and more lending options through Manitoba Agricultural Services Corporation (MASC), said MBP president Arvid Nottveit.

“The beef industry is a key economic driver in Manitoba, responsible for more than $900 million in farm cash receipts and helping to support many businesses and services,” he said. “We recognize the government’s willingness to support initiatives aimed at advancing Manitoba’s cattle industry.”

MBP plans to keep working with the province to tackle ongoing challenges, such as boosting inspection capacity, improving Crown land management, addressing wildlife problems, upgrading infrastructure, and shaping future policy.

Trade diversification moves to forefront

The budget also points to a stronger emphasis on trade, including plans for a new economic development agency and a forthcoming diversification strategy.

KAP’s current Agricultural Trade Action Plan lobbies the province to be proactive when it comes to market access to make sure the needs and priorities of producers are protected, Hornby said.

“We look forward to working with the government on its Manitoba’s Trade and Diversification Plan and urge them to have agriculture at the forefront of this plan,” he said.

Manitoba Pork general manager Cam Dahl echoed KAP and MBP’s positive notes on the budget.

“Manitoba Pork is appreciative of the provincial government’s ongoing commitment to supporting the agriculture sector, both through this budget and through their continued engagement on files like trade that are deeply vital to our sector.”

— Manitoba Pork GM Cam Dahl
Photo: Manitoba Pork Council

Tax, drainage and red tape concerns linger

It’s not all sunny news though. Despite the new spending in the budget, KAP says several longstanding priorities were not addressed, including tax, drainage and regulatory burden.

The group will continue to lobby for a tax credit program for young farmers, axing the educational property tax on farm properties and other initiatives that would cut down on red tape for producers, Hornby said.

“Additionally, maintenance of the drainage network continues to be a top concern identified by Manitoba farmers, and this will require enhanced investments to ensure a modern, maintained drainage network that works for Manitoba farms.”

Funding in the budget is intended to help producers manage volatility, including ongoing trade uncertainty and geopolitical pressures affecting input costs, Sala said.

“We’re doing the important work of making sure (producers) have adequate access to those programs we know will help our producers across the province.”

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From April, the threshold for individual inheritance tax relief will rise to 2.5 million pounds (C$4.62 million) from 1 million pounds, significantly reducing the number of farms and agricultural business owners facing higher tax bills, the government said.

“We have listened closely to farmers across the country and we are making changes today to protect more ordinary family farms,” Environment Secretary Emma Reynolds said in a statement.

“It’s only right that larger estates contribute more, while we back the farms and trading businesses that are the backbone of Britain’s rural communities,” she said.

Tom Bradshaw, president of the National Farmers Union, said the original proposals represented a “pernicious and cruel tax” that his organization had fought for 14 months.

“I am thankful common sense has prevailed and government has listened,” Bradshaw said. “From the start the government said it was trying to protect the family farm and the change announced today brings this much closer to reality for many.”

Tractor protests in London

The move represents the latest policy reversal by Prime Minister Keir Starmer’s government. In July, it backed down on plans to cut welfare spending, and in June it scaled back a proposal to reduce subsidies on energy bills for the elderly.

Under the revised rules, 100 per cent relief will apply up to the new 2.5 million pounds threshold, with 50 per cent relief on assets above the new level. Spouses or civil partners will be able to pass on up to 5 million pounds’ worth of farm assets between them, the statement said.

The government estimated that around 85 per cent of estates claiming agricultural property relief in the 2026/27 year, including those that also claim for business property relief, will pay no more inheritance tax as a result of the changes.

The original announcement in 2024, which ended an exemption from inheritance tax for agricultural families from next year, triggered protests in London by tractor-driving farmers that have continued regularly.

The government had said the measure was intended to raise revenue to help pay for strained public services. Farmers warned it would destroy family farms and cut food production.

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Hiebert introduced Bill 228, The Retail Sales Tax Amendment Act, on April 16. If enacted, it would give producers a farm identification number to cite when making purchases exempt from the provincial sales tax. This would reduce paperwork and red tape, Hiebert argued in a press release sent out the same day. Currently, famers must fill out separate declaration forms for those purchases at the point of sale.

“The current system is outdated, burdensome and inefficient. Bill 228 streamlines the process and cuts the red tape holding back our producers and ag retailers,” Hiebert said.

WHY IT MATTERS: The last-minute parts, seed and fertilizer purchases are flying as the 2025 growing season in Manitoba gets underway.

Hiebert likened the proposed system to a GST number and argued that it would ease the administrative load for farmer and retailer alike. The system would require a declaration only once every two years, instead of for every transaction.

She further argued that it would be one bit of efficiency in an increasingly uncertain business environment for farmers, pointing to global trade stresses from Chinese and U.S. tariffs.

“Farmers and retailers asked for this change, and we listened. During harvest, farmers are working long hours and shouldn’t be worried about signing paperwork for every purchase. This bill brings common sense to our tax system,” she said.

Anything that makes life easier for farmers to operate their businesses is a positive step forward, said Colin Hornby, general manager of Keystone Agricultural Producers.

“We support anything that does that. That’s why we’re working with the provincial government on reducing red tape and other regulatory burdens,” Hornby said

KAP is pleased to see the co-operation between political parties to improve things for farmers, he added.

“I think it’s good to see reducing red tape and regulatory burden for producers as a priority for all parties.”

Hornby futher noted that KAP has brought up the issue before.

“In terms of regulatory burden, this is something that we’ve spoken with MLAs from many parties about over the past few months, about initiatives that would reduce regulatory burden and red tape,” he said.

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At least, that’s what the federal government vowed would happen after Dec. 14.

In November, Prime Minister Justin Trudeau promised that a two-month break from GST/HST on some products would “give people the relief they need.”

The measure would give Canadians “a real break on everything they do,” the prime minister told reporters Nov. 21.

Given that wording, and the fever pitch of basic cost inflation for over two years now — things like the cost of groceries or housing —you would expect the newly exempt items to focus on necessities.

The reality mostly reads like the priority list of an 18-year-old who can’t cook and has never had to pay their own bills: video games and video game consoles and controllers, beer and wine, veggie and cheese trays, pre-made meals, snacks and restaurant meals. There are also Christmas trees, printed books and newspapers and kids toys.

The one sensible inclusion is the tax break on kids’ clothing, footwear and diapers, all of which are basic and difficult to avoid expenses for Canadian families.

While it will certainly be valuable for Canadians looking to give themselves a treat and celebrate the holidays, describing the listed items as a break on “everything they do” is a stretch.

If you had walked onto the street two months ago and asked Canadians what products they would find most helpful if the government were to choose a few to exempt from taxation, I wonder how many of the stated items would have made the list? Maybe prepared food? Canadian grocery shoppers do love grab-and-go convenience.

I’m going to go out on a limb, though, and argue that other big-ticket items in the average budget would have been more top of mind.

As reporter Miranda Leybourne recently reported, food systems experts expect food prices to rise another three to five per cent in 2025. Meat, already one of the most expensive items Canadians buy week to week, is expected to outpace that.

Canada’s Food Price Report 2025, which combines insights from researchers at Dalhousie University, the University of Saskatchewan, the University of British Columbia and University of Guelph,forecasts that meat’s rise will be four to six per cent.

While most basic groceries are zero-rated for GST anyway, it does speak to how out of touch the federal government is when they present a list made up mostly of frivolities and expect applause when Canadians are facing such steep basic affordability issues.

The food price report, for example, noted that beef prices rose 9.2 per cent in the space of a year from September 2023 to September 2024, authors noted, “and are expected to remain high until mid-to late-2025, or longer.”

While beef prices aren’t the same thing as cattle prices, there’s no doubt cattle producers are having a good, extended run in the market.

Back in January, during the Beef and Forage Days event in Austin, those prices were the central theme in beef market pundit Rick Wright’s talk on cattle marketing strategies. He warned producers to watch how much the increased cost of production was eating at their potentially greater profit margin and to look for opportunity with different market flows, among other tidbits.

But the conversation also turned to the future of beef at the grocery store, and risk that the sector might face if beef prices rise enough to switch from dietary staple to luxury good.

“Who’s going to be able to afford to buy it?…There’s a lot of the working class that can’t afford the high end of the beef,” he said at the time.

With meat prices high and forecast to head higher, that’s as true now as it was almost a year ago.

If the government did insist on a selective list of products for a tax holiday, bolstering domestic consumption of high-ticket, basic items would have been better policy. Even better would be to harmonize that list with products that come from Canada, so that benefits to the economy from consumption are matched by support for Canadian production.

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About a year ago, then future-premier Wab Kinew announced that if he was elected, he would cut the province’s fuel tax for at least six months. He followed through on that promise Jan. 1 and drivers started saving money.

In April, Kinew extended his gas tax cut for an additional three months. That cut is slated to expire at the end of September. The premier hasn’t confirmed if gas prices are going to jump 14 cents per litre on Oct. 1.

“As we approach Sept. 30, we’re considering an extension to the gas tax holiday,” said Kinew earlier this month. “If people in the fall feel like the cost of living is still a real big burden, then that would be the argument to extend the gas tax holiday further.”

It’s a good bet the premier would have a hard time finding a Manitoban who wants to pay higher gas prices, especially since Prime Minister Justin Trudeau plans to keep hiking his carbon tax. Come April 1, 2025, Trudeau will raise his carbon tax on gasoline from 17 to 21 cents per litre. Manitobans can’t afford to keep paying Trudeau’s carbon tax and have the provincial gas tax tacked back on top.

But this should be a no-brainer. Because of the fuel tax cut, Manitoba has the lowest fuel taxes and lowest fuel prices in the country. Across Canada, gas taxes make up an average of 60 cents per litre of the pump price. In Manitoba, that number is only 34 cents per litre.

Kinew needs to extend the fuel tax cut again because it has saved Manitobans serious money since Jan. 1.

A typical two-car family with a minivan and a light duty pick-up truck that fills up once every two weeks will have saved more than $440 by the end of September. In total, the fuel tax cut will have put $256 million back into Manitoba taxpayers’ wallets. If you drive a larger truck, run a business with a lot of vehicles or have a longer commute, you will have saved even more.

Those savings will come to a screeching halt if Kinew doesn’t extend the cut before the deadline.

And if those numbers aren’t enough, polling also shows that Manitobans want the gas tax cut to stay. Recent Leger polling shows that 71 per cent of Manitobans want the government to extend the gas tax cut again and 68 per cent want the government to scrap the fuel tax for good.

The premier said he hasn’t extended the cut already because it’s a “balancing act.” He argues that the government might want to cancel the cut and take more cash out of Manitoban’s pockets because he wants to spend more money.

The government can extend the gas tax cut without increasing the deficit. It just has to cut wasteful spending.

The fuel tax regularly brings in about $342 million to the government or about 1.4 per cent of total government revenue.

In its latest budget, the government announced a whole whack of corporate welfare and other subsidies. This includes $50 million for a fund to hand out money to corporations and $10 million to a bus company. The government is also spending $25 million to hand out thousands of dollars to electric vehicle buyers.

Not to mention the $40 million in new bureaucrats the government has hired since being elected.

If the government put a lid on the new spending spree, Kinew would be able to extend the gas tax cut for almost another five months without increasing the deficit.

Kinew needs to listen to taxpayers. The government needs to extend the fuel tax cut again and keep Manitobans saving money at the gas station.

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“Our research shows that an average grain farm in Canada, most of which are family owned and operated, will see a tax increase of 30 per cent due to the two-thirds capital gains inclusion rate,” said Kyle Larkin, Executive Director of GGC in a news release, adding “this hike targets farmers’ retirement plans, complicates intergenerational transfers, and threatens the long-term viability of family farms across the country.”

The 2024 federal budget proposed several key changes to the way capital gains are taxed in Canada:

• After June 25, 2024, any capital gains up to C$250,000 remain subject to the normal 50 per cent inclusion rate, however, gains above C$250,000 will be subject to a new 66.67 per cent inclusion rate for individuals.
• All capital gains generated through a corporation will be subject to a 66.67 per cent inclusion rate.
• The lifetime capital gains exemption for eligible property increases from $1,016,836 to $1,250,000.

Since many family-run grain farms are structured as corporations, family members can become shareholders in the corporation. During the sale of a farm, shareholders can each use their lifetime capital gains exemption upon the sale of their shares. While the combination of two lifetime capital gain exemptions would help reduce the taxes owing by each individual, ultimately the proposed changes will still result in a substantial increase in taxes, according to the GGC research.

In examples provided by the GGC, an 800-acre farm purchased in 1996 in Ontario would incur nearly C$1.2 million in additional taxes if sold today, while a 4,000-acre farm in Saskatchewan would face an increase of just over C$900,000.

“With over 40 per cent of farmers nearing retirement over the next decade, this tax increase introduces substantial uncertainty into their retirement planning,” said Andre Harpe, GGC Chair and Alberta grain farmer in the release. “Despite Budget 2024’s title of ‘Fairness for Every Generation,’ this change will actually burden the next generation of farmers, who are already grappling with costly transfers.”

With the higher taxes leading to increased costs for transferring a farm to the next generation, “this puts the family farm at risk, as the only ones that will be able to afford to pay millions of extra dollars will either be corporate farms or development companies,” said Larkin.

Already, Canada is experiencing a decline in family-owned farms, with a two per cent decrease between 2016 and 2021, according to the most recent data from Statistics Canada.

“To protect family farms, we are asking the government to exempt intergenerational transfers and allow them to be taxed at the original capital gains inclusion rate,” said Larkin. “This will ensure that farmers’ retirement plans remain secure and that the next generation can afford to take over, enabling family farms to continue being the backbone of Canada’s agriculture sector.”

With 40 per cent of Canadian farm operators set to retire over the next decade, “we need to ensure that the proposed personal income tax measures announced in Budget 2024 do not jeopardize the transfer of assets from one generation of farmer to another, but rather encourage the next generation of farmers to take up the calling, drive much needed rural economic activity and help the agriculture sector reach its growth potential,” said the Canadian Federation of Agriculture in a separate news release.

“By ramming these very significant tax changes through while farmers are in the field planting, we aren’t giving producers enough time to fully assess the implications for their families and their businesses,” said Keith Currie, CFA President.

*Update: A comment from the Canadian Federation of Agriculture was added.

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Understanding the implications of certain business activities can reduce tax amounts.

For farms that run as corporations, Dec. 31, 2023, was the last day for the temporary immediate expensing option. This program allows corporations to write off capital expenses of up to $1.5 million immediately, rather than claiming the depreciation over time.

• RELATED: Federal budget promises lower costs, interest relief for farmers

It came into effect for the 2022 calendar year. In 2023, the program was expanded to include sole proprietorships and partnerships owned by sole proprietors. It will remain an option for those business types until the end of 2024.

“If you bought a tractor, you could write off the whole tractor,” said Edith Frison, a business advisor with MNP’s tax service in Brandon. “Typically, that would go into a CCA (capital cost allowance) pool, and you’d have to depreciate it over the life of the tractor.”

The program is not right for every circumstance, she warned, but can sometimes prove useful.

“If somebody did come in now and said, ‘hey, I have a million dollars worth of income,’ then one of the things we might say back to them is, ‘OK, what did you buy last year?’ And if they bought a tractor, typically we could write off the whole value of that tractor all in one year.”

Frison also pointed to the return of fuel charge proceeds to farmers’ tax credit, which is another potential opportunity to maximize savings. Self-employed farmers or individuals who are members of a partnership operating a farming business may be eligible to have a portion of the carbon levy refunded. For 2023, the tax credit is $1.86 for every $1,000 of eligible farming expenses in Manitoba.

Looking to another program, Frison said most farmers are aware of the income smoothing provision in the Income Tax Act, but a reminder never hurts.

“Farmers that report on a cash basis can use optional inventory for income smoothing,” she said.

That means they can add existing inventory to the income they report for tax purposes.

“So, if you have grain in the bin or you have animals in the field, it’s likeyou take extra income this year and then you get it as an expense the next year.”

When they’ve had a tax loss, most farmers will apply enough optional inventory to bring them to break-even, she said, since they still won’t pay any tax on it in those circumstances.

“Then they have an expense to use for next year.”

Break the cycle

Frison said farmers often make the same mistakes every year. One mistake is to ignore the advice of a tax professional when making important financial decisions, like selling a major piece of equipment, selling dairy quota, or making other business moves that significantly impact the balance sheet for the year. They may be unaware of related tax implications.

Also, farmers often misunderstand the capital gains exemption, Frison said.

“Everybody in Canada gets a $1 million capital gains exemption, but it can only be used on certain assets. In farming, there are lots of assets where you can use the capital gains exemption, but farmers tend to think they can use it for absolutely anything.

“That’s not true. There are very specific rules around when and how it can be used and what assets are eligible.”

Farms are a complex entity, Frison noted, and planning is key when doing taxes. For example, “farmers report on a cash basis. So, at the end of December, they have the opportunity to go out and buy inputs to use against that income.”

That ship has sailed for the 2023 tax year but there’s always future tax years to think about.

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Manitoba’s new provincial government announced February 1 they were reinstating the ability of school trustees to raise property taxes, alongside new provincial money for schools.

That could mean higher costs for Manitoba farmers, and that’s troubling to the Keystone Agricultural Producers. They’ve long claimed the province’s farmers pay more than their fair share of education costs.

KAP president Jill Verwey said Manitoba farmers support a well-funded education system that ensured the next generation of Manitobans have access to a quality education — but added the cost of that education needed to be fairly shared.

“As the funding model is currently structured, any increase to local property tax rates would disproportionately impact Manitoba producers, given the significantly higher amount of property tax they pay than the average single dwelling resident,” she said. “KAP urges all local school boards to consider this factor when they make any decisions to change the local levy on property in their respective communities.”

The issue of taxes on farmland has been a longstanding bone of contention for KAP, who celebrated a partial victory in 2021 when the former government announced it was phasing out education taxes levied on property.

Education Minister Nello Altomare told a press conference at a school in Winnipeg the province would be maintaining the property tax offset grant at the same level as last year, but was lifting the ban on local rate increases.

“School divisions right now will be able to go to local ratepayers and talk to them about their local levy,” Altomare told reporters. “We trust (them) to make the choices that will impact positively their community.” 

In total, divisions will receive an additional $93.4 million in additional operating funding for the coming school year.

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