It is good news for livestock producers struggling from the effect of extreme weather conditions as the government announced new tax relief measures under its Livestock Tax Deferral provision. This provision will permit livestock producers who are forced to sell off a significant portion of their breeding herd due to extreme weather conditions like flooding or drought to defer a part of their income from said sales to the next tax year. The income may in turn be partially offset by the cost of reacquiring breeding animals, enabling the livestock producers to lower their tax burden associated with the initial sale.
This tax relief scheme is expected to benefit livestock farmers in the designated regions in Alberta, Manitoba and Saskatchewan. More regions may be added to this list based on ongoing monitoring of conditions around the country. The eligible regions have been selected based on climate, weather and production data and in consultation with industry and provinces.
The eligibility criteria for qualifying regions include those where forage shortfalls of 50% or more that has been caused by excess moisture or drought in a particular year. The regions must also be large enough to have an impact on the industry and have recognised geo-political boundaries.
For livestock producers to qualify for this tax relief, the breeding herd should have been reduced by at least 15%. Those that have reduced their breeding herd by at least 15% and no more than 30% may defer up to 30% of the income from net sales. Those that have reduced their breeding herd by 30% or more, may defer 90% of their net sales income.
This move comes just a few months after the Agricultural Producers Association of Saskatchewan (APAS) requested tax breaks for cattle farmers that were being forced to slaughter herds due to prolonged drought conditions that were resulting in feed shortages.
According to the Minister of Agriculture and Agri-Food, the Honourable Marie-Claude Bibeau, the Livestock Tax Deferral program will provide farmers with the resources they need to make informed decisions and the capacity to rebuild their herd and operations. She commended the producers for demonstrating remarkable resilience in facing the challenges and uncertainty brought on by extreme weather conditions.
Livestock producers are also being supported through Business Risk Management (BRM) programs that are designed to help them manage risks that may threaten the survival of their farms and their capacity to manage them. Farmers are being urged to take advantage of the BRM programs as part of their initial approaches to protecting their farming operations.
The government has reiterated its commitment to keep supporting farm families by providing tools needed to overcome the challenges of changing climate conditions and work towards a sustainable future for the agriculture sector in the country.
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