It also showed that the average age of a farmer in Canada has increased – in this case up to 55 from just under 50 a decade ago.
Clearly, farmers are getting older. However, I don’t think there’s any cause for alarm – we do not appear to be on the brink of a crisis in production or a huge wave of foreign takeovers.
What I do see reflected in this report, and on many farms that I visit, is how technology and machinery are improving productivity – and allowing farmers to work longer, whether out of necessity or a passion for what they do.
As I travel across Canada, I meet many farmers in their mid-50s that aren’t even beginning to think about retirement.
This is all good. These facts speak to the health of the industry and the continued viability of farming as a way of life. It also speaks to overall health and longevity – which is encouraging because it can be tough to give up doing something you love.
So while there’s a lot of good news in this report for agriculture in Canada, it did make me think about some of the struggles farmers and other associated businesses are having attracting younger people to the industry.
Because while many younger people are choosing to stay on the farms they grew up on, the general feeling across the board is that interest from the younger generation is down. Which begs the question: Who is going to take over the farm?
Regardless of whether you consider yourself a farmer, business owner or producer first, you’ve worked hard over the years to build relationships with suppliers and customers and to grow, expand or diversify your business.
And like many in this business, although you’ve probably seen plenty of change, you have continued to put in long hours to improve yields, productivity and profitability.
So looking at it from the perspective of your hard work, this report from StatsCan might also be the nudge you need to start thinking about what’s going to happen to your business when you do decide to scale back your involvement in the day-to-day operations of your business or actually retire.
Because regardless of how passionate you are about what you do, the time will one day come when you will want to hand over control and turn your attention to enjoying the next phase of your life.
And whether you plan to sell your business outright, transfer the ownership to employees, your children or other members of your family, a succession plan will detail how the business is to be run when you’re no longer calling the shots.
A carefully thought-out succession plan is the best way to make sure your business ends up in the right hands. You’ve worked too hard to leave it up to chance, so a key priority should be to sit down with your kids and find out who is interested in taking over the business.
Having everyone at the table can ensure there’s no conflict down the road and, more importantly, that the prospect appeals to all of them. And note, there are some reliable professionals available that can facilitate family discussions if you feel it would assist with gaining family consensus.
In addition, a detailed succession plan can also help you address legal and taxation issues. And by outlining your business and future growth strategy, you can ensure that your business continues to thrive once you transfer control.
Due to the complexities of estate, tax and business law, a succession plan isn’t something you can put together overnight. For example, you should consider:
• Exactly when are you planning on retiring or scaling back your day-to-day personal involvement in the business?
• Who is the strongest candidate to take over your business?
• If it’s a family member, are they ready, willing and able?
• Do you have any shareholders or other stakeholders to consider?
• What are the tax implications of a sale or transfer?
• What if your business is a partnership?
• What is the connection between your business assets and your personal wealth and estate?
• How much time will you need to train your successors?
• How important is it to equalize your estate for your children? Should the distribution of the estate be “fair” or equal?
These are complex issues and, in some cases, a plan could take a year, two years or longer to work out. So it’s best to give yourself plenty of time to sort out the details with your accountants, family members, business partners or whoever else has a real or potential interest in your operation.
These considerations will not just give you peace of mind and reduce the stress of transferring ownership; it will also help you build a timetable of key events to keep you on track – and keep the end goal of your retirement or business transition in sight.
After all, Canadians from all walks of life are enjoying their retirements like never before. So once you determine the date, you should make every effort to stick to it.
And because things do change, treat your succession plan as a living document and review it on a regular basis. Doing so should ensure it is up-to-date with any changes in your family, the agriculture industry or Canadian tax laws.
While it may seem like a daunting task at first, a succession plan should reduce the amount of stress and anxiety you feel when contemplating a transfer of assets and ownership in exchange for the leisure time you have worked hard to earn.
As mentioned, there are professionals who have general knowledge and specific expertise in many relevant areas. From bankers to tax consultants and lawyers, you will find that there is specific expertise you can tap into when it comes to succession planning.
The bottom line is that you’ve worked hard to grow a successful business and giving some thought to how you will transfer that control when you start to scale back your involvement and ultimately retire is a good way to ensure your farm continues to thrive for generations to come. PD
- Craig Bremner
- Agriculture Services
- TD Business Banking
