Agriculture Minister Gerry Ritz announced livestock producers in Manitoba in areas affected by excessive moisture will be eligible for tax deferrals on breeding livestock sold in 2009.
“Our Government understands the strain that many livestock producers are facing due to above average rainfall this spring in some parts of Manitoba,” said Minister Ritz. “We will continue to put farmers first so that they have the programs and assistance needed to overcome these challenges and continue to drive the Canadian economy.”
The deferral allows eligible producers in designated areas to defer income tax on the sale of breeding livestock for one year to help replenish breeding stock in the following year. 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.
Producers who reduced their breeding herds by at least 15 per cent are eligible. Thirty per cent of income from net sales can be deferred if the herd has been reduced by at least 15 per cent, but less than 30 per cent. Where the herd has been reduced by 30 per cent or more, 90 per cent of income from net sales can be deferred.
“This tax deferral will assist Manitoba producers as they decide whether to reduce their breeding herds due to excessive moisture,” said Rosann Wowchuk, Manitoba Minister Agriculture, Food and Rural Initiatives. “We know that the livestock sector is hurting and we’ll continue to work with the federal government to make sure that they get the help they need, when they need it.”
Eligible producers will be able to request this deferral when filing their 2009 income tax returns. Livestock producers are advised to contact their local Canada Revenue Agency Tax Services Office for details on the income tax provisions.
While forage yield information is not available until later in the year, designations can be made earlier in the year based primarily on spring moisture conditions and estimates of forage yield. Early designation of eligible areas will allow producers to make informed decisions about fall and winter livestock management decisions.
The Interlake Region of central Manitoba experienced excessive moisture from the fall of 2008 and received higher than normal precipitation throughout the spring. This has resulted in producers being unable to reseed their forages or cut available forage crops.
As the growing season continues, further areas can be designated for the tax deferral should they meet the established criteria.
