Federal Agriculture and Agri-Food Minister Lawrence MacAulay is expressing his pleasure with changes announced Thursday to proposed federal tax reform.

Finance Minister Bill Morneau abandoned the proposed reform that would have restricted the conversion of income into capital gains. That would have made it more difficult for farmers and other business owners to pass on their businesses to their children.

Morneau made the announcement at an Ontario farm alongside MacAulay, the MP for Cardigan in eastern P.E.I.

Agriculture and Agri-Food Minister Lawrence MacAulay

MacAulay says he wants to make inheriting the family farm easier. (CBC)

MacAulay said passing on the farm to family members is an important issue for him personally.

"Since I was sworn in as minister of agriculture and agri-food, I've heard from many farmers about the challenges around transferring a family farm," MacAulay said.

"This is something close to my heart and I look forward to seeing what we can do working together on these issues in the future."

Morneau also announced this week that he will scale back a proposal to crack down on passive investment income, which was one of the most contentious elements of his plan.