A tax cut for hundreds of thousands of farmers, small businesses and fishing corporations is lawful, Finance Minister Chrystia Freeland said Monday, said Blacklock’s Reporter..Freeland’s department had questioned the validity of the measure, though it passed Parliament and was signed into law..“Bill C-208 was voted on by Parliament and received Royal Assent,” Freeland said in a statement. “The law is the law.”.The Senate on June 22 passed Bill C-208 An Act To Amend The Income Tax Act that promised a tax cut on the sale of family-owned businesses. The bill allows net profits on the sale of property to family members to be taxed at a 25% capital gains rate instead of the current 45% taxable dividend rate, a measure worth $178 million a year by Budget Office estimate..The bill was signed into law June 29. The finance department on June 30 issued a news release questioning whether it was valid since “it does not include an application date,” and said cabinet would try to amend it..Freeland last evening said her department would still attempt “technical amendments” at a future date, but did not question the validity of the tax cut. “It has become part of Canada’s Income Tax Act,” said Freeland. “The changes contained in this legislation now apply in law.”.The reversal came ahead of hearings today by the Commons Finance Committee at the call of Liberal MP Wayne Easter (Malpeque, P.E.I.), chair of the committee. Easter in an earlier interview said the Department of Finance could not contradict a bill passed by Parliament..“Parliament is supreme,” said Easter. “The debate on Bill C-208 is done. When a bill received Royal Assent as this bill did, it comes into effect on that date.”.“Accountants have told us this is fairly airtight,” said Easter. “I have a lot of respect for the officials in the finance department, but when we said, okay, if you want amendments to the bill, give us some amendments if you want Parliament to close what you perceive as some loophole, they didn’t submit any.”.The bill passed the Commons and Senate over cabinet protests it would permit tax avoidance by large corporations, not family-run farms and small businesses. Bloc Québécois leader Yves-François Blanchet yesterday said the measure plainly corrected an anomaly in the Tax Act..“A minority government cannot use a twisted ploy to circumvent the will of Parliament,” said Blanchet. “This is unheard of. The law is deemed to come into force upon Royal Assent.”.Conservative MP Larry Maguire (Brandon-Souris, Man.), sponsor of Bill C-208, said the measure could save family businesses hundreds of thousands in federal taxes. “It is completely unfair that it is more financially advantageous for a parent to sell their farm or small business to an absolute stranger than it is to their own children,” Maguire earlier told the Commons. “I think we can all agree that it is completely unfair.”.Mike D’Amour is the British Columbia Bureau Chief for the Western Standard..,.mdamour@westernstandardonline.com
