The Canadian Federation of Agriculture (CFA) is applauding the federal government's decision to lower its small business tax rate from 10.5 per cent to 9 per cent by the year 2019.

"A reduced overall small business tax rate will help to drive growth in the agriculture sector and boost the competitiveness of Canadian farmers," said CFA President Ron Bonnett. "As well, changes announced to 'Tax Planning Using Private Corporations' proposals are a positive sign that the government understands the concerns voiced by farm groups in recent months."

He says simplifying the income sprinkling rules is a step in the right direction and CFA is also pleased that the government will not proceed with limiting access to the Lifetime Capital Gains Exemption.

"While today's news resolves some uncertainty, farmers remain apprehensive about other proposed tax measures, particularly on passive investments, which are vital for managing year-over-year risks due to weather or market-related volatility," added Bonnett. "CFA has also noted concern with plans that would affect the conversion of income into capital gains."

CFA executives are in regular contact with Finance Canada officials and other government representatives.