Lacombe County producers may be eligible for the Federal Livestock Deferral Provision

Farmers in Canada often face unpredictable and challenging weather conditions that can severely impact their operations. To support farmers during such times, the Federal Livestock Deferral Provision offers a critical financial relief mechanism.

This provision is designed for farmers who carry on a farming business in a prescribed region and are forced to sell all or part of their breeding herd due to drought, excess moisture, or flooding. By deferring a portion of the sale proceeds to the following year, this provision helps farmers manage their income and stabilize their finances during tough periods.

Lacombe County is currently identified as a prescribed region, meaning producers may be eligible for the program, providing they meet the criteria.

How Does the Livestock Deferral Provision Work?

When farmers in designated regions, known as prescribed regions, experience extreme weather conditions that necessitate the sale of their breeding herd, they can defer a portion of the proceeds from these sales to the following tax year.

To defer income, the breeding herd must have been reduced by at least 15%.

Where the breeding herd has been reduced by at least 15%, but less than 30%, 30% of income from net sales can be deferred.
Where the breeding herd has been reduced by 30% or more, 90% of income from net sales can be deferred.

This deferral helps to even out income fluctuations caused by the forced sales, providing farmers with a more stable financial situation.

Eligibility Criteria

To qualify for the Livestock Deferral Provision, farmers must meet specific criteria:

Location: The farming operation must be located in a prescribed region. These regions are determined annually based on weather conditions and their impact on farming operations. For 2024, Lacombe County is one of the identified prescribed regions, meaning farmers in this area may be eligible for the program.
Sale of Breeding Herd: The sale must involve all or part of the breeding herd. This provision is specifically aimed at situations where farmers need to sell breeding livestock due to adverse weather conditions.
Adverse Weather Conditions: The sale must be due to drought, excess moisture, or flooding. These conditions must significantly impact the farming operations, making it necessary to reduce the herd.

Benefits of the Livestock Deferral Provision

The primary benefit of this provision is the ability to defer income to a subsequent year, helping farmers manage their tax burden more effectively. This deferral can be crucial in a year where income is unexpectedly high due to forced livestock sales, preventing a spike in taxable income and allowing for better financial planning and stability.

How to Apply

Farmers who believe they meet the criteria for the Livestock Deferral Provision should consult the official guidelines provided by Agriculture and Agri-Food Canada. Detailed information and the list of prescribed regions for 2024 can be found on their website:

By staying informed and prepared, farmers in prescribed regions like Lacombe County can take advantage of this provision, ensuring they have the necessary financial support during challenging times.

Additional Information

For more information on the process or criteria to identify prescribed drought or flood regions, please contact aafc.taxdeferral-reportdelimpot.aac@agr.gc.ca.

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