Livestock producers in Western Canada who have downsized their herds due to drought and feed shortages will be allowed to defer income from the sale of breeding stock when paying income tax.
Agriculture Minister Gerry Ritz today released a list of designated regions in British Columbia, Alberta, Saskatchewan and Manitoba where tax deferrals have been authorized for 2015.
Proceeds from deferred sales will be included in a producer’s income in the next tax year, when in theory, the proceeds might be offset by the cost of replacing animals.
To be eligible, the breeding herd must have been reduced by at least 15 percent. In cases where between 15 and 30 percent of the herd has been sold, 30 percent of income from net sales can be deferred. When a herd by has been reduced by more than 30 percent, 90 percent of income can be deferred.
According to Agriculture and Agri-Food Canada, from April 1 to July 21, 60 percent of the Prairie agricultural landscape — representing 27,000 farms and more than 5.8 million cattle — had received ‘very low’ to ‘record low’ precipitation (see national map below.)
The list of designated regions can be found here. AAFC says other areas might be added to the list if required.