Livestock tax deferral program kicks in early

Program is aimed at helping producers rebuild their herds

Alberta Beef Producers and other cattle groups had requested the earlier-than-usual start to the Livestock Tax Deferral program.
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Ottawa has started up its Livestock Tax Deferral months ahead of normal to give producers who have to sell cattle a better economic route to rebuilding their herds next year.

Alberta Beef Producers and other cattle groups had requested the earlier-than-usual start to the program. Some also want an expansion of the deferral provision beyond just breeding stock for the 2021 tax year, and federal Ag Minister Marie-Claude Bibeau said she would consider it.

“We know it’s going to take multiple years to recover the breeding herd — and so considerations for different classes of animals, and adding multiple years (of deferral), we think makes a lot of sense,” Manitoba Beef Producers president Tyler Fulton said during a news conference announcing the tax deferral.

The government only released a map of “designated regions” where the tax deferral program is in operation, and that map shows just four Alberta counties: Vulcan, Foothills, Rocky View and Willow Creek. Most of the designated regions are in Manitoba and Saskatchewan, but more in Alberta are certain to be added. (In 2019, for example, virtually all of the province was designated.)

In regions officially designated for drought, flood or excess moisture, eligible producers who reduced breeding herds by at least 15 per cent can defer part of their income from sales until their next non-designated tax year.

If the herd was cut by at least 15 per cent, but less than 30 per cent, then 30 per cent of income from net sales can be deferred. Where a producer reduced a breeding herd by 30 per cent or more, 90 per cent of income from net sales can be deferred.

The idea is that the tax hit deferred to the next tax year can be at least partially offset by the cost of reacquiring breeding animals.

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