"This spring was very difficult for our farmers in the Prairies, as they faced extreme weather conditions and unprecedented flooding," Ritz said. "By adding these regions to the list of those eligible for the tax deferral program, producers will be better positioned to cope with the results of the wet and cold conditions."
According to the tax deferral plan, eligible producers in designated areas will be allowed to defer income tax on the sale of breeding livestock for one year, to help replenish breeding stock in the following year. Proceeds from deferred sales are included as income in the next tax year, when they may be at least partially offset by the cost of re-acquiring breeding animals. In the case of consecutive years of designation, producers may defer sales income to the first year in which the area is no longer designated.
In order to defer income, the breeding herd must have been reduced by at least 15 percent. If this is the case, 30 percent of income from net sales can then be deferred. In cases where the herd has been reduced by more than 30 percent, 90 percent of income from net sales can be deferred.
Producers who are eligible will be able to request this deferral when filing their 2011 income tax returns. Livestock producers are advised to contact the Canada Revenue Agency for details on the income tax provisions.