The Minister of Agriculture and Agri-Food Marie-Claude Bibeau has announced an initial list of designated regions in Alberta, Saskatchewan, and Manitoba where Livestock Tax Deferral has been authorized for 2022 due to extreme weather conditions.
The Livestock Tax Deferral provision allows livestock producers who are forced to sell a significant amount of their breeding herd due to drought or flooding to defer a portion of their income from sales until the following tax year.
During the announcement, Minister Bibeau stated that producers in those areas had gone through a lot with the continuing drought.
“Canada’s producers continue to show remarkable resilience as they face challenges and uncertainty due to extreme weather conditions. Designation of the Livestock Tax Deferral provision provides farmers with the resources needed to make informed decisions and focus on rebuilding their herd and their operations.”
The income may be at least partially offset by the cost of reacquiring breeding animals, reducing the potential tax burden associated with the original sale.
Last year, a widespread drought caused the deferral to cover all of Saskatchewan, as well as significant areas of Alberta and Manitoba.
Saskatchewan is mainly clear of that this year, with the exception of some areas in the west.
Eligible regions have been identified based on weather, climate, and production data, in consultation with industry and provinces. The criteria for identifying regions for Livestock Tax Deferral include forage shortfalls of 50 per cent or more caused by drought or excess moisture.
The Government of Canada will continue to monitor conditions across the country to determine whether the addition of other regions throughout the year are required.
In addition to the Livestock Tax Deferral provision, producers have access to a comprehensive suite of Business Risk Management programs to help them manage significant risks that threaten the viability of their farm and are beyond their capacity to manage.