CFIB urges feds to retool lifetime capital gains exemption

The Canadian Federation of Independent Business (CFIB) is urging the federal government to put an end to excluding family members from the lifetime capital gains exemption when business owners sell their companies to family members.

The recommendation was part of the CFIB’s list of small business owners’ top priorities for the upcoming federal budget. According to CFIB research, 72% of small business owners plan on exiting their business within the next decade — representing a potential transfer of assets of more than $1.5 trillion. Many wish to do this by selling their business to their children.

“We think that making it easier for small business owners to sell to their kids is something that all the parties can get behind —and it would be a big win for entrepreneurs,” CFIB president Dan Kelly said in a statement.

The CFIB also urged the government not to raise the capital gains inclusion rate, something that the NDP promised to during the federal election campaign. The CFIB warned that such a move would be “seriously damaging” to small businesses, particularly business owners who are looking to sell or retire.

“This is because increasing the rate would significantly decrease the retirement income of small business owners, many of whom rely on the lifetime capital gains exemption, which would be directly affected by such an increase,” the CFIB wrote.

The CFIB also argued that rising CPP premiums are making it more difficult for entrepreneurs to hire and retain employees, and called for the elimination of credit card processing fees on GST and HST.

Read the CFIB’s full list of recommendations.

Maddie Johnson

Maddie is a freelance writer and editor who has been reporting for Advisor.ca since 2019.