The Government of Canada today released a list of prescribed drought regions in Nova Scotia, New Brunswick, Prince Edward Island and Quebec where livestock tax deferral has been authorized for the 2020 tax year.
The Livestock Tax Deferral provision will allow livestock producers in these prescribed regions who reduced their breeding herds by at least 15% to defer a portion of their 2020 income from sales until the 2021 tax year when the income may be at least partially offset by the cost of reacquiring breeding animals, thus reducing the potential tax burden.
The criteria for identifying regions for livestock tax deferral is forage yields of less than 50% of the long-term average as a result of drought or flooding in a particular year. Eligible regions are identified based on weather, climate and production data, in consultation with industry and provinces. See attached map for designated regions.
“Extreme weather conditions this past year have caused many challenges for Canadian producers. The Government of Canada is committed to providing support that will help livestock producers manage the impacts of drought and focus on rebuilding their herds and businesses.”
– The Honourable Marie-Claude Bibeau, Minister of Agriculture and Agri-Food
Low moisture levels resulted in significant forage shortages for livestock producers in Nova Scotia, New Brunswick, Prince Edward Island and Quebec in 2020. One option for producers was to reduce their breeding herd in order to manage feed supplies.
In addition to the Livestock Tax Deferral provision, producers have access to a suite of business risk management programs to help them manage significant risks that threaten the viability of their farm and are beyond their capacity to manage.