September 10, 2009

The Canadian government is offering tax deferrals to livestock producers struggling due to drought across many municipalities in western Canada.

The tax deferral allows eligible producers in designated areas to defer income tax on the sale of breeding livestock for one year to help replenish breeding stock in the following year, the Agriculture Ministry said Tuesday in a press release.

In the case of consecutive years of drought designation, producers may defer sales income to the first year in which the area is no longer designated.

Producers who reduced their breeding herds by at least 15 percent are eligible. Thirty percent income from net sales can be deferred if the herd has been reduced by at least 15 percent, but less than 30 percent. In cases where the herd has been reduced by 30 percent or more, 90 percent of income from net sales can be deferred, the ministry said.

While forage yield information is not available until later in the year, designations can be made earlier in the year based primarily on spring moisture conditions and estimates of forage yield, said the release. Early designation of eligible areas will allow producers to make informed decisions about fall and winter livestock management decisions.

A list of municipalities eligible for tax deferrals had been released by the government earlier this year, but Tuesday's announcement expanded that list. The primary regions receiving tax deferrals are central British Columbia, central Alberta and west-central Saskatchewan.