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By Alice McFarlane

Livestock Tax Deferral

Tax relief for livestock producers

Feb 18, 2020 | 4:14 PM

Low moisture levels resulted in significant forage shortages for livestock producers across Western Canada. One option for producers is to reduce their breeding herd in order to manage feed supplies.

The livestock tax deferral provision allows producers in prescribed drought, flood or excess moisture regions to defer a portion of their 2019 sale proceeds of breeding livestock until 2020 to help replenish the herd.

The cost of replacing the animals this year will offset the deferred income and reduce the tax burden associated with the original sale.

Federal Agriculture Minister Marie-Claude Bibeau said it was a tough year for livestock producers.

“Extreme and unpredictable weather made 2019 a very difficult year for many livestock producers across Canada,” Bibeau said in a news release. “It is a priority for the government to help farmers and ranchers get the resources and support they need to manage and rebuild their herds.”

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In July 2019 the federal government announced the initial list of prescribed regions in British Columbia, Alberta, Saskatchewan, Manitoba and Quebec for livestock tax deferral purposes.

Further investigation found the list should be expanded and new regions were added.

The criteria for livestock tax deferral is forage shortfalls of 50 per cent or more caused by drought or excess moisture. Those regions were identified based on weather, climate, and production data and were done in consultation with industry and provinces.

Eligibility for the tax deferral is limited to producers located inside the designated prescribed areas. Producers in those regions can request the tax deferral when filing their 2019 income tax returns.

A map of designated areas can be found here.

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alice.mcfarlane@jpbg.ca

On Twitter: @AliceMcF