For many farmers across Canada, the upcoming federal budget that will be released on November 4th feels less like a long-awaited moment of clarity. The 2024 budget introduced a range of proposed tax and program changes for the agricultural sector, but most of them were never actually passed into law due to the government prorogation that halted all parliamentary activity. That has left producers planning, investing, and filing taxes under a cloud of uncertainty for the last 10 months.
At FP CPA, we’ve heard the same frustration from clients across the Prairies. When the rules keep shifting, it’s hard to know what to expect, and that makes good financial planning harder.
The Budget That Never Quite Landed
Last year’s federal budget included several measures that caught the attention of the agricultural community. There were proposed adjustments to the Alternative Minimum Tax, new limits on the capital gains exemption, and changes affecting intergenerational farm transfers. But while the headlines made it sound as though these were already in effect, Parliament never passed the legislation needed to make them official. As a result, producers and their advisors were left trying to interpret draft rules that could change at any time. Accountants, lawyers, and financial advisors all found themselves answering the same question: “Should we act now, or wait?”
What this Means for Farmers
This uncertainty has directly affected how farm businesses plan and invest. We’ve seen clients delay postpone land transactions and hold off on succession planning simply because they don’t want to trigger tax consequences that might look different a few months down the road.
For family-run operations, that uncertainty adds stress to already complex decisions. Uncertainty around succession planning makes it difficult to commit to capital projects, expand operations, and make other strategic decisions.
What to Watch on November 4
The November 4, 2025 federal budget is expected to revisit many of those unimplemented measures. Whether the government chooses to reaffirm them, scale them back, or introduce entirely new provisions will determine how much stability the sector can expect heading into 2026.
Farmers and agri-business owners should pay particular attention to:
- Capital gains and succession planning. Any adjustment to the lifetime capital gains exemption or transfer rules could significantly affect how farms are passed to the next generation. In March, the Carney government announced that they would maintain the proposed increase in the lifetime capital gains exemption limit to $1,250,000 and that legislation would be introduced accordingly, but this has yet to happen.
- Small business deduction thresholds. The current federal small business corporate tax rate is 9%. The government could alter this rate or alter access to the lower small business tax rate for incorporated farms.
- Capital gains inclusion rate. Another piece of policy that has caused particular concern for farming operations is the proposed increase in the capital gains inclusion rate. The 2024 federal budget had flagged a change from the current inclusion rate of 50% to 66⅔%. However, because the legislation was never enacted and later cancelled by the Carney government in March 2025, the inclusion rate remains at 50%. For incorporated farms, especially those planning land sales or generational transfers, the mere prospect of the increase created timing-decisions and suspicion. While it appears that this particular hike will not go ahead, the episode underscores how uncertain tax policy can affect planning.
Once the budget is tabled, we’ll finally know which parts of last year’s proposals are being kept, changed, or dropped entirely.
Our Perspective
From our vantage point, we know farmers don’t need another round of speculation — they need clarity. The constant cycle of proposed-but-not-passed legislation has made it difficult for the agricultural sector to plan long-term, particularly when decisions about land, equipment, and family succession hinge on tax certainty.
When the new budget is released, our team will be reviewing to understand what it really means for producers and agri-business owners in Canada. Once the details are clear, we’ll share practical guidance to help you plan with confidence again.
Until then, the best approach is to stay flexible and avoid rushing into transactions that depend on rules that may soon change.