The Saskatchewan Cattlemen’s Association says it has obtained national support among cattle groups to work toward a permanent tax deferral system in times of disaster.
SCA chair Rick Toney said the option to defer income taxes on sale of breeding stock to another year would give cattle producers another risk management tool.
The federal government has announced tax deferrals numerous times in past years, usually granting them by affected zone and making the announcement late in the year or early the following year.
The SCA and others in the industry want tax deferral to be a permanent option that can be applied when disasters like this year’s drought and feed shortage occur.
“How can I make a decision today to sell all my herd when I’m not going to find out if the deferral is going to be allowed until February,” said Toney.
“We want it to be an ongoing program so we can sit down on our toolbox. We can talk to our accountants. We can talk to our bankers. We can decide what we’re going to do. That only makes sense.”
Having a permanent program would also reduce stress on cattle producers who are facing adversity and tough decisions.
The idea has been embraced by the Agricultural Producers Association of Saskatchewan, which issued a news release about it two weeks ago. Alberta Beef Producers chair Charlie Christie also indicated the Canadian Cattlemen’s Association plans to work toward a plan as well, although the CCA did not return calls confirming that by press time Aug. 27.
Last week, Saskatchewan Agriculture Minister David Marit said former minister Lyle Stewart has already asked federal agriculture minister Lawrence MacAulay for a tax deferral this year for producers who may sell breeding stock this year because of feed shortages.
Toney said the situation is dire for many who are running out of pasture and have to decide quickly on what to do next.
“People are wondering where they’re going to get feed, how they’re going to get feed. People are running around like chickens with their heads chopped off trying to figure out stuff.
“Some of us can make it through. Some of us can’t. For the people that can’t, it’s extremely important” to get a tax deferral so they aren’t taxed on a high income resulting from selling under duress all or part of a breeding herd.
“When next year comes and you want to buy back into the industry, now you don’t have enough money,” Toney said.
“You’re going to sell in a low market to begin with because (cattle) are going out. When buying back in, the market is going to be higher so you’re going to be at a disadvantage right off the bat.”