The federal government said the situation has become more challenging for producers due to climate change, when announcing a list of regions eligible for the deferral on June 14.

The LTD allows producers in designated areas, who were forced to sell all or part of their breeding herd, to defer a portion of the income from those sales to a subsequent tax year.

Most of the eligible regions this season are in Alberta and Saskatchewan. A full list is available at the Government of Canada website.

The Canadian Cattle Association welcomed the announcement in a news release, noting that several of the adjustments the government had made this year would make the program work better for producers. In particular they singled out streamlining the process to identify eligible regions an the inclusion of “buffer zones” that means producers wouldn’t find themselves on the fringe of a drought, ineligible for the program.

“CCA has long advocated for changes to the LTD and we are encouraged to see the government take tangible steps to address our concerns and find solutions that work for producers,” said Nathan Phinney, president of CCA. “Today’s announcement including this year’s early designated regions will help impacted producers make real time decisions for their operations.””

Circumstances that may influence producers to sell their breeding herd include drought, flooding and excessive moisture. The income may be at least partially offset by the cost of reacquiring breeding animals, reducing the tax burden associated with the original sale.

Weather, climate and production data from across Canada will be monitored for the rest of the season. Regions will be added to the list as they qualify. Subsequent regions will be added to the list when they meet the eligibility criteria of 50 per cent or more forage capacity loss caused by drought or excess moisture.

After consulting with industry, Agriculture and Agri-food Canada has used preliminary scientific data to produce the initial list of regions earlier in the growing season.

Some regions may recover forage capacity based on conditions later in the growing season. Once a region is eligible, it will remain eligible for the deferral for the taxation year.

To defer income under LTD, the breeding herd must have been reduced by at least 15 per cent.

In the case of consecutive years of drought or excess moisture and flood condition, producers may defer sales income to the first year in which the region is no longer prescribed.

The post Feds announce early livestock tax deferral appeared first on Alberta Farmer Express.

Agriculture Minister Lawrence MacAulay on Monday announced an initial list of designated regions for the provision for the 2023 tax year, including major chunks of Alberta and British Columbia and much of western Saskatchewan and south-central Manitoba.

The list so far includes 96 municipalities and other jurisdictions in Saskatchewan, 62 in B.C., 56 in Alberta and 19 in Manitoba.

A preliminary list of prescribed drought and flood regions for a given tax year is usually ready in the early fall of that year, the government said, so making these designations earlier “helps provide assurance for producers as they make difficult herd management decisions.”

As usual, the government said it will continue to monitor conditions across the country and will add other regions throughout the year “if they meet the criteria.” The full list for a given tax year is usually set out in December, when forage yield data for the year are finalized.

Criteria for the deferral include forage yields of less than 50 per cent of the long-term average, whether caused by drought or excess moisture. Eligible regions are identified based on weather, climate and production data, in consultation with industry and provinces.

In areas designated for deferral in a given tax year, eligible producers who had to cull breeding herds by at least 15 per cent may defer part of the income from those sales until their next non-designated tax year.

If the herd is cut by at least 15 per cent — but by less than 30 per cent — then 30 per cent of income from net sales can be deferred.

Where a producer reduces a breeding herd by 30 per cent or more, 90 per cent of income from net sales can be deferred.

Thus, in the 2024 tax year — or in the next tax year in which the designation is lifted off a specific municipality — the deferred taxable income from those sales can be at least partially offset by the cost of reacquiring breeding animals, which works out to a reduced tax burden connected to the original sale.

The government said Monday it “recognizes the significant challenges livestock producers in Western Canada are facing due to exceptionally dry conditions. Compounded by subsequent years of drought, pastures and forage production are significantly impacted, leading to low feed supplies for livestock.”

“My heart goes out to farmers and ranchers who are affected by these extreme weather conditions,” MacAulay said in Monday’s release. Along with the deferral provision, he said, “we have also enhanced support available under (business risk management) programs and we will continue to work closely with provinces to get producers the additional support they need as quickly as possible.”

For example, the government said, it’s “worked quickly” with the B.C., Alberta and Saskatchewan governments on joint AgriRecovery assessments and work is “urgently progressing” to finalize the AgriRecovery process, as well as to sort out any additional supports required to cover producers’ “extraordinary costs.”

As for other supports already in place, the federal government said Monday it has already cleared requests from B.C. and Alberta for late participation in AgriStability, as well as requests from B.C. and Saskatchewan to increase the interim payment rate under AgriStability to 75 per cent, up from 50.

MacAulay also noted one-year adjustments to federal-provincial AgriInsurance programs to make more drought-damaged crops available for feed in Alberta, Saskatchewan and B.C. — Glacier FarmMedia Network

The post Livestock tax deferral list begins in West for 2023 appeared first on Alberta Farmer Express.

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.

The post Livestock tax deferral program kicks in early appeared first on Alberta Farmer Express.

Agriculture Minister Marie-Claude Bibeau announced Thursday in Winnipeg that producers in drought-designated areas of southern Alberta, southeastern British Columbia, northwestern Ontario, parts of Saskatchewan and all of agricultural Manitoba (see map below) will be the initial regions eligible for the deferral.

“At times like this we need to reach out to each other, we need to find a helping hand and a sympathetic ear. We all need to pull together, neighbours helping neighbours, showing the true strength and solidarity of our communities,” she said at a Winnipeg press conference after a tour of drought damage north of the city.

The livestock tax deferral is being set up for the 2021 tax year with earlier-than-usual designations, so as to allow affected beef producers forced to sell a significant amount of their breeding herd to defer income tax from those sales. Other regions are expected to be added later.

The Canadian Cattlemen’s Association and other groups had previously called for the “immediate” implementation of the tax deferral program — as well as an expansion of the program to include other classes of livestock, among other requests.

Asked Thursday about the possibility of expanding the deferral provision beyond just breeding stock for the 2021 tax year, Bibeau said the government has received that request and will evaluate it, but “the first thing is to trigger the program that already exists… Making modifications takes longer.”

Manitoba Beef Producers president Tyler Fulton, who attended the Winnipeg event, added “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.”

Crops for feed

Bibeau also pledged Ottawa’s support for “immediate” bilateral adjustments to affected provinces’ crop insurance programs, so drought-damaged crops can be made available for feed.

Saskatchewan had already announced such an adjustment last week, to give crop producers incentives to make drought-hit crops available for greenfeed, grazing or silage for livestock.

Manitoba on Thursday announced a similar adjustment — as did Alberta, which said Thursday its crop insurance adjustment would help encourage drought-hit crop producers “to act swiftly to salvage crops for livestock feed rather than watch their fields deteriorate further, and risk harvesting nothing.”

In talks with Manitoba and Alberta following Saskatchewan’s adjustment, Bibeau said Thursday, “we thought it was a really good idea and that the (AgriInsurance) program was able to take (the adjustments) and to remain sustainable.”

“What’s critical right now,” MBP’s Fulton added, “is that the message gets out that there is a really good incentive (to salvage crops for feed), so that crop guys can decide — right now — because time is ticking.”

Cattle producers, he said, “have likely less than a week left to make these decisions, and so the quicker that we can make those decisions and start salvaging some of the value of these crops — it’s just a critical time right now.”

‘Verbal commitment’

The four western provinces and Ontario have also requested AgriRecovery programs be put in place to further alleviate drought damage, Bibeau added.

AgriRecovery is designed to offer disaster-specific relief “in situations where producers do not have the capacity to cover the extraordinary costs, even with the assistance available from other programs.”

Supports under the program could include direct assistance to producers for added livestock feed costs, transportation and water infrastructure.

“We are working around the clock to turn those around as quickly as possible to help farmers with the extraordinary cost,” Bibeau said.

Alberta Agriculture Minister Devin Dreeshen, in Thursday’s release on adjustments to crop insurance, reiterated he and his Saskatchewan, Manitoba and Ontario counterparts had received “verbal commitment from the federal government that a joint AgriRecovery program will be initiated to support producers affected by drought conditions prior to a federal election.”

Assessments for AgriRecovery are “currently underway” in those provinces, he said.

Thursday’s trip to Manitoba is arguably the most significant travel Bibeau has undertaken since the pandemic began — outside of a few announcements around her home province of Quebec.

After receiving an invitation from an area farmer, however, she decided to witness the devastation herself.

“I speak for Prime Minister Justin Trudeau and myself when I say to all producers affected by the disaster, we have your back to get through the challenges of today and to position you for a sustainable future in agriculture,” she said. “We will do all we can to help you get back on your feet, and once again producing the best food in the world.”

“Canadian farmers and ranchers are facing one of the most severe, widespread droughts and one of the largest feed supply shortages that they have experienced in decades,” CCA vice-president Reg Schellenberg said in a separate release Thursday after Bibeau’s announcement.

“We appreciate Minister Bibeau and the federal government taking the time to visit one of the hardest-hit areas of the drought and subsequently taking swift action to support farm families.”

Bibeau also continues to hope the climate disaster will prompt provinces to accept her long-standing offer to make changes to AgriStability.

Ottawa has offered to increase the compensation rate offered to producers to 80 per cent, up from the current 70, which would add “$75 million nationally into the pockets of farmers who need it the most every year” according to Bibeau.

During Thursday’s press conference, she once again urged Prairie provinces to accept that offer.

As for the damages she saw on her trip, Bibeau told her audience, including several ranchers, that “I can’t begin to imagine the stress that producers are going through, watching your pastures and crops dry up, wondering how you’re going to get your animals through the winter, and facing the prospect of sending breeding cattle off to auction — animals that are the result of generations of careful genetic selection, hard work and sacrifice.”

Fulton also described the reaction from one ranch family MBP had heard from after having to disperse its entire herd: “They said ‘Can you imagine how it feels to see your years of hard work and love for farming go onto a truck? This is our livelihood, it’s heartbreaking.'”

Manitoba’s Interlake region, he said, is particularly hard hit, noting a livestock auction sale Wednesday at Ashern, Man. involving “more than 1,500” animals whereas typically most Manitoba auction marts are on reduced schedules or summer breaks at this time of year.

— D.C. Fraser reports for Glacier FarmMedia from Ottawa. Includes files from Glacier FarmMedia Network staff in Winnipeg.

Livestock tax deferral: How it works

In regions officially designated for drought (see initial 2021 map below), flood or excess moisture, the federal livestock tax deferral provision allows eligible producers who reduced breeding herds by at least 15 per cent to defer part of their income from sales until their next non-designated tax year.

To defer income, a producer’s breeding herd must have been reduced by at least 15 per cent in the tax year in question. 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.

Thus, in the 2022 tax year — or the next tax year in which the designation is lifted for a specific region — the income from those sales can be at least partially offset by the cost of reacquiring breeding animals, the government says.

In the 2020 tax year, designated drought zones for tax deferrals had included New Brunswick, Prince Edward Island and parts of southeastern Quebec and northwestern Nova Scotia.

Unlike Thursday’s relatively early designation announcement, however, the 2020 designation list wasn’t finalized until May 2021 — by which time many producers had already filed their 2020 tax returns and would have needed to seek adjustments. — GFM

The post Tax deferrals, crop insurance changes en route against drought appeared first on Alberta Farmer Express.

Marie-Claude Bibeau, summarizing discussions from Thursday’s online meeting with provincial and territorial (FPT) agriculture ministers, said the formal requests “are needed to trigger the process,” as both levels of government contribute.

AgriRecovery is the brand name for the FPT disaster relief framework, deployed on an as-needed basis during natural disasters to help farmers with “extraordinary costs.”

AgriRecovery programs, cost-shared by the federal and participating provincial governments, are launched in “situations where producers do not have the capacity to cover the extraordinary costs, even with the assistance available from other programs.”

During their meeting, the government said in a release, ministers “expressed their concern for farmers and workers dealing with the current heat waves, wildfires and drought conditions in Western Canada and other regions of the country.”

Bibeau’s Saskatchewan counterpart David Marit, for one, put his request in writing Thursday for an AgriRecovery assessment for the province, so as to “determine program requirements.” His letter CC’ed his counterparts in the four western provinces and Ontario.

Alberta’s ag minister Devin Dreeshen, in a separate statement Thursday, said the province has “received verbal commitment from Ottawa that a joint AgriRecovery program will be initiated to support Prairie producers affected by drought conditions prior to (a federal) election.”

Bibeau, in her summary tweets on Thursday, said Ottawa “will make sure our programs continue responding to the crisis” in the western provinces.

On that note she also asked that provinces hit by drought move to invoke the “late participation provision” of the AgriStability income stabilization program, “to help more farmers access the support they need.”

Bibeau also reiterated her previous request to the provinces that they match an earlier federal offer that would raise the AgriStability compensation rate to 80 per cent from the current 70.

The ministers’ statements follow requests earlier Thursday from the Canadian Cattlemen’s Association and provincial cattle associations on several drought-related measures, along with other recent requests from farm groups.

Among those requests, they called for drought relief programming under AgriRecovery to help with costs related to feed and water shortages as well as “impacts of wildfires.”

They also called on Ottawa to “immediately” set up the livestock tax deferral provision for this tax year, designating all of the Prairie provinces as well as parts of British Columbia and Ontario, but also to “extend eligibility to include all classes of cattle.”

That provision, if put in effect as it now stands, would allow producers in designated areas to temporarily defer tax owing on drought-induced livestock sales, but only on breeding stock.

Lianne Rood, the federal Conservatives’ ag critic, made the same request in a separate letter to Bibeau Wednesday, but cautioned that “a decision on this must be made quickly and cannot be delayed by the calling of a fall election.”

The cattle groups also called Thursday for governments to “expedite approvals for insured crops to be designated for livestock feed or grazing purposes” and allow parched crops to be grazed or converted to feed without penalty. Saskatchewan announced such a move Wednesday.

“Without timely and targeted assistance from federal and provincial governments, beef producers will be forced to make difficult management decisions including culling of their herds,” CCA president Bob Lowe said in a release Thursday.

“It is of critical importance that Canada’s beef cow herd be maintained throughout this disaster event.” — Glacier FarmMedia Network

The post Request line open for AgriRecovery drought plans, Bibeau says appeared first on Alberta Farmer Express.

The weather data is used to better understand local and regional conditions, and to help identify emerging trends and anomalies. It is also used for programs such as AgriRecovery and the Livestock Tax Deferral Provision.

The survey is conducted during the last week of the month (from April to October), with results made into maps published at Drought Watch.

To volunteer, go to the ‘Drought Watch’ page on the Government of Canada website click on the ‘Agroclimate Impact Reporter’ link.

The post How’s the weather on your farm? appeared first on Alberta Farmer Express.

There are 30 counties and special areas named in Alberta, concentrated along the southern side of the province and in the north and northwest.

The provision allows producers who sell part of their breeding herd to defer a portion of that income to the following year — which can save tax if replacement breeding animals are bought the next year.

The early announcement “will provide added time to help producers make more informed herd management decisions as they face feed shortages,” said the Canadian Cattlemen’s Association.

The list can be found on the Agriculture and Agri-Food Canada website.

The post Livestock tax deferral regions announced appeared first on Alberta Farmer Express.

The livestock tax deferral provision allows livestock producers in prescribed drought, flood or excess moisture regions to defer a portion of their 2019 sale proceeds of breeding livestock until 2020 to help replenish the herd. The cost of replacing the animals in 2020 will offset the deferred income, thereby reducing the tax burden associated with the original sale.

“Canadian producers have had to face numerous challenges due to extreme weather conditions. It is a priority for our government to quickly determine how the livestock tax deferral will be authorized to ensure that our producers have the support necessary to make informed herd management decisions and to help them keep their businesses strong,” said Marie-Claude Bibeau, minister of Agriculture and Agri-Food, in a release.

The criteria for identifying regions for livestock tax deferral is forage shortfalls of 50 per cent or more caused by drought or excess moisture. Eligible regions are identified based on weather, climate, and production data, in consultation with industry and provinces.

Eligibility for the tax deferral is limited to producers located inside the designated areas. Producers in those regions can request the tax deferral when filing their 2019 income tax returns.

The post Livestock producers receive tax relief for 2019 appeared first on Alberta Farmer Express.

This allows cattle producers affected by severe drought or excess moisture to defer a portion of their income earned from selling part of their herd.

The cost of replacements in 2019 will offset the deferred income, thereby reducing taxes associated with the original sale.

Eight areas have been added to the areas announced in September and October. They are the counties of Brazeau, Lac Ste. Anne, Leduc, Paintearth, Parkland, and Yellowhead along with Special Areas No. 2 and No. 3.

The post More counties eligible for livestock tax deferral appeared first on Alberta Farmer Express.

Agriculture and Agri-Food Canada’s initial list of eligible municipalities issued in September has been expanded to include many counties passed over the first time.

Municipalities are only eligible for the program if forage yields fall below 50 per cent of the long-term average in that region. Producers in those areas who are forced to sell livestock will be allowed to defer a portion of that income into 2019. This allows income from sales this year to be offset by the purchase of replacement breeding stock next year.

The program will have little impact for producers making only minor culls. Producers must be cutting their breeding stock by at least 15 per cent to qualify. Farmers cutting between 15 and 30 per cent of their herd will be able to defer 30 per cent of that income, while producers cutting their herd by 30 per cent or more will be able to bump that deferral up to 90 per cent of the net sales. Producers in eligible regions can request the tax deferral when filing their 2018 income tax returns.

The newly added municipalities are:

• Bighorn No. 8
• Clearwater County
• Flagstaff County
• Foothills No. 31
• Lamont County
• Mackenzie County
• Minburn County No. 27
• Ranchland No. 66
• Starland County
• Stettler County No. 6

For a complete list of eligible municipalities and more details on the program, go to the Agriculture and Agri-Food Canada website.

The post Ten more counties eligible for tax relief appeared first on Alberta Farmer Express.