Farm families across Saskatchewan and Alberta often ask the same big questions when it comes to their land, retirement, and legacy. Should we sell or rent our farmland? How do we treat farming and non-farming children fairly? When should we start CPP and OAS? This FAQ brings together plainspoken answers, with examples and guidance based on CRA and Service Canada rules, provincial programs, and decades of working alongside Prairie families. At PWM, we integrate tax, investments through Q Wealth, insurance, and succession planning under one roof, so you don’t have to juggle multiple advisors - and we collaborate seamlessly with your existing accountants or lawyers when you have them.
Should we sell, rent, or pass down our farmland in Saskatchewan or Alberta for retirement?
Quick Take: Farm families in Saskatchewan and Alberta often ask whether it’s better to sell farmland for cash, rent it for retirement income, or pass it down to children. The right answer is often a mix of all three.Deeper Guidance: Selling farmland can unlock retirement capital, but CRA may apply capital gains tax. The Lifetime Capital Gains Exemption (LCGE) can shelter over $1M per person on qualified farm property, but planning is critical. Renting farmland provides steady retirement income while letting you keep ownership, and passing the farm down preserves legacy while using CRA rollover rules to defer tax.
How much do farm families in Saskatchewan and Alberta need to retire comfortably?
Quick Take: Most Prairie farm couples need between $50,000 and $80,000 annually in retirement, depending on lifestyle, health costs, and debt. Retirement income typically comes from farmland rent, CPP/OAS, and savings.Deeper Guidance: Farm families are often “land rich but cash poor,” which means planning focuses on how to turn land value into income. According to Service Canada, Canadian senior households spend about $60,000 annually, but farm families in Saskatchewan and Alberta may need more if they travel frequently or support multiple generations.
How do farmland values in Saskatchewan and Alberta affect retirement and succession planning?
Quick Take: Record farmland values across Saskatchewan and Alberta provide retirement security, but they also increase capital gains tax exposure and make succession fairness more complex.Deeper Guidance: High farmland values mean renting fewer acres may now cover retirement living expenses, but selling land may trigger large capital gains. CRA’s LCGE can shelter over $1M per person, but eligibility must be confirmed well before a sale or transfer.
Is renting out farmland a good strategy for retirement income in Saskatchewan and Alberta?
Quick Take: Renting out farmland is one of the most common retirement income strategies for Prairie farmers. Cash rent provides steady income, while crop-share lets you share in good years.Deeper Guidance: According to Farm Credit Canada, farmland rent is a reliable income stream for many retired farmers. Cash rent offers predictability, while crop-share lets you participate in strong yields. A few quarters of farmland can often cover most retirement needs.
How does the Lifetime Capital Gains Exemption (LCGE) work for farmers in Saskatchewan and Alberta?
Quick Take: The LCGE lets each person shelter over $1M in gains on qualified farm property from tax. Couples may shelter $2M+ when both spouses qualify.Deeper Guidance: CRA allows farmers to claim the LCGE on “qualified farm property” such as farmland and shares of a family farm corporation. To qualify, land must have been used principally in farming by you or close family members.
Can we transfer our family farm to a spouse or children without paying capital gains tax?
Quick Take: Yes. CRA permits “rollovers” to a spouse or to farming children, deferring capital gains tax until a future sale.Deeper Guidance: Spousal rollovers transfer land at cost, creating no immediate tax bill. Parent-to-child rollovers are also permitted if the child is a Canadian resident and the land has been actively farmed by the family. CRA Form T2057 is usually required.
What taxes apply when selling farm equipment in Saskatchewan and Alberta?
Quick Take: Selling equipment can trigger recapture of past depreciation and, in some cases, a capital gain.Deeper Guidance: Farm equipment is depreciable property. If sold for more than its undepreciated capital cost (UCC), CRA requires the difference to be included as taxable income (recapture). If sold above original purchase price, the excess is a capital gain. If sold for less, you may claim a terminal loss.
How should farm couples coordinate CPP, OAS, and GIS benefits?
Quick Take: Timing matters. One spouse may take CPP early for cash flow, while the other delays for higher lifetime benefits.Deeper Guidance: CPP can start at age 60 or be delayed to 70, with monthly payments adjusted permanently. OAS normally starts at 65 but can also be delayed for higher payments. GIS is only available if you are receiving OAS and meet income thresholds.
When is the best time for Saskatchewan and Alberta farmers to start CPP and OAS?
Quick Take: Starting earlier provides income sooner; delaying increases monthly benefits for life. There is no advantage to waiting past 70.Deeper Guidance: According to Service Canada, CPP increases by 0.7% per month after 65, and OAS by 0.6% per month, up to age 70. Delaying CPP from 60 to 70 nearly doubles the monthly payment, but if you die early, you may receive less overall.
What is the Guaranteed Income Supplement (GIS) and who qualifies?
Quick Take: GIS is a tax-free monthly payment for low-income seniors receiving OAS. Most affluent farm families won’t qualify, but it’s important to understand the rules.Deeper Guidance: According to Service Canada, GIS eligibility is based on family income. Singles with incomes under about $22,000 and couples under $28,000 (2024 thresholds) may qualify. GIS requires you to start OAS at 65. Because most farm families have higher retirement income, they will not qualify.
How do we plan for taxes when selling or transitioning farmland in Saskatchewan or Alberta?
Quick Take: Taxes can be the biggest cost when selling or transitioning farmland, but advance planning can defer or reduce them significantly.Deeper Guidance: CRA taxes capital gains based on fair market value at the time of sale or transfer. The LCGE can shelter more than $1M of gains per person. Rollovers to spouses or children may also defer taxes.
How can life insurance help in farm succession and estate equalization?
Quick Take: Life insurance is a practical tool to equalize inheritances between farming and non-farming children while keeping the farm intact.Deeper Guidance: If one child inherits the farm, parents often use permanent life insurance to provide equivalent value to non-farming children. For example, the farming child receives land and equipment, while siblings receive insurance proceeds.
How should Saskatchewan and Alberta farm retirees manage RRSP, RRIF, and TFSA savings?
Quick Take: Withdraw from RRSPs and RRIFs strategically to avoid OAS clawbacks. Use TFSAs for tax-free, flexible savings.Deeper Guidance: CRA requires RRSPs to be converted to RRIFs by age 71. RRIF withdrawals are taxable and may reduce OAS benefits. TFSAs grow tax-free and don’t affect government benefits.
What happens to my RRSP when I turn 71?
Quick Take: By December 31 of the year you turn 71, your RRSP must be converted into a RRIF or an annuity.Deeper Guidance: CRA sets minimum RRIF withdrawal rates based on age. If your spouse is younger, you can base withdrawals on their age to reduce required amounts. You can also purchase an annuity for guaranteed income.
How do we create a succession plan that keeps the farm in the family?
Quick Take: Start early, communicate openly, and use legal and tax tools to align family goals.Deeper Guidance: A strong farm succession plan often includes updated wills, shareholder agreements, staged transfers of land or shares, and tax deferrals through CRA rollover rules or the LCGE. Families that hold structured meetings and write down their decisions often have smoother transitions.
What should blended or multigenerational farm families consider in succession?
Quick Take: Transparency is essential. Keep wills, beneficiary designations, and agreements up to date for all family members.Deeper Guidance: Blended families may face unique tensions. Updating wills and RRSP or insurance beneficiaries is critical. Marital agreements or trusts may be needed to balance rights between spouses, stepchildren, and farming heirs.
How can we be fair to both farming and non-farming children in our estate plan?
Quick Take: Fairness doesn’t always mean equal division. Farm children may inherit land, while non-farming children receive cash, insurance, or other assets of similar value.Deeper Guidance: Professional valuations of land and equipment help establish fair values. Families often use life insurance to balance inheritances when land goes to farming children. Documenting expectations avoids resentment.
What estate planning essentials should every Saskatchewan or Alberta farm family have in place?
Quick Take: At minimum, every farm family should have wills, powers of attorney, and clear beneficiary designations in place.Deeper Guidance: CRA stresses the importance of updating beneficiaries to match wills. Farm families should also keep deeds, corporate records, and loan agreements organized. A plain-language “family letter” explaining intentions can reduce disputes.
Is part of a farm sale tax-free if the farmhouse was our principal residence?
Quick Take: Yes. If the farmhouse was your primary residence, the house and some surrounding land may be exempt from tax.Deeper Guidance: CRA allows the principal residence exemption for the home and up to 0.5 hectares of surrounding land, or more if required for use. The rest of the farmland may qualify for LCGE treatment. Keeping records of use and separating sale proceeds simplifies tax reporting.
Will deferring OAS affect provincial seniors’ benefits in Saskatchewan and Alberta?
Quick Take: Yes. Both Saskatchewan and Alberta require you to be receiving OAS to qualify for provincial seniors’ top-up benefits.Deeper Guidance: The Saskatchewan Income Plan and the Alberta Seniors Benefit are tied to OAS. If you defer OAS, you won’t receive these supports until OAS begins. This should be considered when deciding whether to delay.
What are practical ways to create retirement income without selling the whole farm?
Quick Take: Many farm families mix rental income, partial land sales, CPP/OAS, and savings withdrawals to create retirement income without selling the entire farm.Deeper Guidance: Selling non-core parcels while renting core acres is a common approach. Income can be supplemented with government benefits and registered account withdrawals. Timing equipment sales across years may also smooth taxes.
Should we incorporate our farm before succession planning?
Quick Take: Incorporation may help with liability protection and tax planning, but rental income in a company may be taxed less favourably.Deeper Guidance: CRA rules allow shares of farm corporations to qualify for LCGE if conditions are met. Incorporation also allows share freezes, which simplify ownership transfers. But if your farm primarily earns rental income, passive income rules may increase tax.
What’s the best way to pass down farm equipment fairly?
Quick Take: Farm equipment usually goes to the farming child, with other children receiving cash or assets of equal value.Deeper Guidance: Equipment depreciates and requires maintenance, so it’s usually most useful to the child farming actively. CRA requires depreciation recapture or capital gains to be reported on sales or transfers. Families often use insurance or other assets to balance inheritances.
How do we protect the family farm if only one child farms?
Quick Take: Use valuations, agreements, and insurance to keep the farm intact while treating all children fairly.Deeper Guidance: A common approach is to leave the farm to the farming child while equalizing with life insurance or other assets for siblings. Valuations help set fair numbers, and shareholder or co-ownership agreements prevent forced sales. Early discussions avoid disputes later.PWM is Saskatchewan’s Multi-Family Office for farm families. We bring investments through Q Wealth, tax, insurance, and succession planning together under one roof, so your family doesn’t have to coordinate between different advisors. And when you already have accountants, lawyers or other advisors you trust, we work seamlessly alongside them, speaking their language and ensuring everything fits together in one integrated plan.
