Canada releases final list of regions for livestock tax deferral

Canada releases final list of regions for livestock tax deferral

Producers in prescribed drought or excess moisture regions can defer portion of sale proceeds

Canada’s government has released the final list of designated regions where livestock tax deferral has been authorized for 2018 due to drought conditions in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec and New Brunswick.

On Sept. 14, 2018, the government announced the initial list of prescribed regions in British Columbia, Alberta, Saskatchewan, Manitoba and Quebec eligible for livestock tax deferral. A second designation of eligible regions was made on Oct. 31, 2018. Ongoing analysis of drought conditions has indicated the need to expand the list of designated regions for 2018, with new regions identified for Alberta, Saskatchewan, Manitoba and Ontario.

“Extreme weather conditions created difficulties for Canada’s livestock industry in several provinces this past year,” said Minister of Agriculture and Agri-Food Lawrence MacAulay. “This tax deferral will help farmers manage the impacts of drought and focus on rebuilding their herds and businesses.”

The livestock tax deferral provision allows producers in prescribed drought or excess moisture regions to defer a portion of their 2018 sale proceeds of breeding livestock until 2019 to help replenish the herd. The cost of replacing the animals in 2019 will offset the deferred income, thereby reducing the tax burden associated with the original sale.

Eligibility for the tax deferral is limited to those producers located inside the prescribed areas. Producers in those regions can request the tax deferral when filing their 2018 income tax returns.

In addition to the livestock tax deferral provision, producers have access to assistance through existing Canadian Agricultural Partnership Business Risk Management programs, which include AgriInsurance, AgriStability and AgriInvest.