The federal government is taking a look at extending its livestock tax
deferral program.
Last month the Canadian Cattlemen’s Association passed a resolution
calling for an income deferral of up to three years for producers who
have to sell breeding stock due to drought.
The deferral is currently available for one year.
CCA director Hugh Lynch-Staunton said that is inadequate. He said most
farmers use the cash accounting method, so proceeds from sales go
directly into income. That puts the producer into a higher tax bracket.
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He also said the cattle business is more specialized.
“We think (the deferral) should be expanded to not only include the
breeding herd, but whatever livestock is moving in and out of an
operation,” he said in a statement. “This could be grass yearlings or
feedlot cattle.”
Pam Kujawa, senior policy analyst with Agriculture Canada in Regina,
said officials in the agriculture and finance departments are reviewing
the program.
“Because of the current drought situation, we’re looking at some of our
options,” she said. “It would allow more time for pastures to recover
and for producers to buy back livestock.”
But there are also tax issues and abuse potential, she said. The change
would also require amendments to the Income Tax Act, which takes time.
