For the second year in a row, Alberta ranchers will get a partial tax
holiday on income derived from breeding stock sales.
Federal finance minister John Manley approved the province-wide measure
late last month after receiving a recommendation from the federal
agriculture department.
The Canada Customs and Revenue Agency’s tax deferral program was deemed
necessary because prospects for forage production are poor and rainfall
in most regions is well below normal.
It could benefit as many as 31,800 cow-calf producers in Alberta.
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As well, approximately 22,600 cow-calf producers in central and
northern Saskatchewan qualify for the tax holiday, along with an
estimated 11,300 producers in southwestern and west-central Manitoba.
Pam Kuyawa, senior policy analyst with the Prairie Farm Rehabilitation
Administration in Regina, said the decision to extend the tax relief to
cattle producers came earlier than usual this year due to extreme
drought conditions across much of Western Canada.
Even in areas of southern Alberta, where rainfall is well above normal,
tax relief was offered because pastures and forage crops are still
recovering from last year’s drought and some producers are selling
their herds.
“They (southern Alberta producers) have had more rains than other areas
of Alberta and their pastures are probably recovering faster than other
areas, but there’s still going to be producers there that have used up
all their surplus feed…” Kuyawa said.
“They’ve had consecutive years of drought down in the south part of
Alberta and it was felt that even if they had sufficient rains, their
pastures might not recover to normal in one growing season.”
Under the tax deferral program, eligible producers who sell between 15
and 30 percent of their breeding herds can defer 30 percent of the
income to the following tax year.
Producers who sell more than 30 percent of their herd can defer 90
percent of the income earned.
The tax deferral program has been in place since 1988, when widespread
drought affected pastures and forage crops throughout Western Canada.
It kicks in when annual forage yields drop below 50 percent of the
long-term yield.
Kuyawa said the PFRA continues to monitor additional areas in Manitoba
and Saskatchewan.
“If conditions continue to be dry and we get more information later in
the growing season, we can do further analysis and then, if more areas
meet the eligibility criteria, then we can add them to the list.”
Visit www.producer.com for a complete list of eligible areas.
