The Canadian Federation of Agriculture (CFA) is commending the federal government on Thursday's announcement that it will halt and reconsider a series of proposed tax reforms.

CFA says the changes would have led to severe negative impacts for family farm businesses.

"Farmers are pleased to see that Minister Morneau listened to concerns from CFA and other groups and, as a result, decided against plans to limit the lifetime capital gains exemption and options to convert income to capital gains," said CFA President Ron Bonnett. "Both measures would have led to enormous complexity and added costs for inter-generational farm transfers and could've even encouraged farmers to sell their businesses to non-family members."

He notes announcements made earlier this week regarding a simplified reasonableness test and a minimum threshold on the taxation of passive investment income also appear to be steps in the right direction.