In addition to tax deferral, producers have access to assistance through existing business risk management (BRM) programs, including AgriInsurance, AgriStability, and AgriInvest. Producers can contact Agricorp and La Financière agricole du Québec for details.
Federal and provincial officials are working as quickly as possible to assess the impact of drought under the AgriRecovery Framework to determine whether further assistance beyond existing programs is needed to help producers deal with the potential additional costs. The AgriRecovery assessment will be completed once harvest is complete and the full impact of the disaster is known.
"While the effects of drought can be seen on fields in many parts of central and eastern Canada, it is still too early to know the full extent of damage to crops and feed stocks," said Parliamentary Secretary Pierre Lemieux. "Production is still underway and recent rains may still improve the crop and feed outlook. Farmers can be assured that we are keeping a close eye on the situation." Mr. Lemieux will be attending a farmer round table in Renfrew, Ontario today hosted by Member of Parliament Cheryl Gallant (Renfrew County).
The tax 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. Proceeds from deferred sales are included as income in the next tax year, when they may be at least partially offset by the cost of replacing breeding animals. 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.
To defer income, the breeding herd must have been reduced by at least 15%. If this is the case, 30% of income from net sales can then be deferred. In cases where the herd has been reduced by more than 30%, 90% of income from net sales can be deferred.
Eligible producers will be able to request this deferral when filing their 2012 income tax returns. Livestock producers are advised to contact their local Canada Revenue Agency Tax Services Office for details on the income tax provisions.
