Map of the included areas. (supplied photo/Agriculture and Agri-Food Canada)

By Alice McFarlane

dry conditions and wildfires

Livestock tax deferral for designated area in Western Canada

Aug 23, 2023 | 4:45 PM

LETHBRIDGE, AB – The federal government has announced its first list of regions in British Columbia, Alberta, Saskatchewan, and Manitoba where Livestock Tax Deferral has been authorized for 2023.

The provision allows livestock producers who are forced to sell all or part of their breeding herd due to drought or excess moisture to defer a portion of their income from sales until the following tax year.

The income can be at least partially offset by the cost of reacquiring breeding animals, thus reducing the tax burden associated with the original sale.

A preliminary list is usually completed in the early fall but making the announcement now helps producers who are making difficult herd management decisions.

The criteria used for identifying regions for the deferral is forage yields of less than 50 per cent of the long-term average caused by drought or excess moisture. Eligible regions are identified based on weather, climate, and production data, in consultation with industry and provinces.

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In order for a livestock producer to defer income, the breeding herd must have been reduced by at least 15 per cent. In the case of consecutive years of drought or excess moisture and flood conditions, producers may defer sales income to the first year in which the region is no longer prescribed.

Agriculture and Agri-Food Minister Lawrence MacAulay said it has been a difficult time for producers suffering from dry conditions and wildfires.

MacAulay stated, “My heart goes out to farmers and ranchers who are affected by these extreme weather conditions. Early designation of the Livestock Tax Deferral provision provides assurance so they can make informed decisions to manage their herds.”

The federal government will continue to monitor conditions across the country and will add other regions throughout the year if they meet the criteria.