Federal Bill C‑208 (amending the Income Tax Act) aims to address an issue to which the Insurance Brokers Association of Canada (IBAC) and the RCCAQ have been paying a good deal of attention. Under current federal tax rules, it is more advantageous for small business owners to sell their company to a non‑family‑member third party than to their own children.

The brokerage industry, primarily made up of small businesses, is directly affected by this issue. Questions regarding the next generation of entrepreneurs and the shortage of qualified workers all have a major impact on brokerage firms' long‑term viability. By granting the same tax exemption when small businesses are sold to a family member or to unrelated persons, Bill C‑208 could rectify a major inequity and might even help to keep established businesses operating in the same region.

This proposed legislation, which has been referred to the Standing Committee on Finance in Ottawa for further study, is in line with steps taken by the RCCAQ between 2014 and 2017 to support similar initiatives. Unfortunately, the previous Bill C‑274, presented in 2016‑2017, was not adopted.

According to the RCCAQ's outgoing chair Sylvain Turgeon, "The labour shortage and next generation issues affecting brokerages are among the RCCAQ's top priorities. Business transfers between related persons tie in directly with our efforts. There should no longer be any penalty  for brokerage owners seeking to transfer their business to the next generation. This is an essential step for the vitality of our industry and for dynamic regional economies." 

In partnership with IBAC, the RCCAQ will be closely monitoring developments involving this issue to determine how brokerage firms stand to benefit. Business transfers are inherently challenging, and the RCCAQ will continue to support its members with a view to ensuring that tax rules no longer hinder or penalize brokerage owners seeking to transfer their business to a family member.