Last week the federal government made the announcement regarding famers affected by extreme weather: https://www.canada.ca/en/agriculture-agri-food/news/2021/07/government-of-canada-taking-action-to-support-farmers-facing-extreme-weather.html
It includes the early designation of the Livestock Tax Deferral provision for prescribed drought regions from BC east through to and including Ontario. Please find below, the section referring to the Livestock Tax Deferral provision on Line 9470 extracted from https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4002/t4002-4.html
Prescribed drought region (PDR)
In some cases, you may be able to defer the applicable income received from the sale of breeding animals in your 2020 fiscal period to a later fiscal period.
To be able to do this, you must meet the following two conditions:
- your farming business was located in a PDR at some time during your 2020 fiscal period
- you reduced, by sale or other means, the number of breeding animals in your breeding herds by at least 15%
For a list of PDRs, contact us at 1-800-959-5525 or Agriculture and Agri-Food Canada. For a list of the prescribed regions of drought, flood or excessive moisture, go to Livestock Tax Deferral Provision.
Prescribed flood region (PFR)
Eligible farmers who dispose of breeding livestock in a tax year because of flood or excessive moisture will be permitted to exclude a portion of the sale proceeds from their incomes until the following tax year or a later tax year if the condition persists. You may want to file your return based on the legislation in the same manner as you would for a prescribed drought region.
For a list of the prescribed regions of flood or excessive moisture, go to Livestock Tax Deferral Provision.
The following animals kept for breeding that are over 12 months of age are considered breeding animals eligible for the income deferral:
- bovine cattle
- deer, elk, and other similar grazing ungulates
- horses you breed to produce pregnant mare's urine that you sell
Eligibility for the income deferral includes:
- all horses over 12 months of age kept for breeding
- breeding bees not used mainly to pollinate plants in greenhouses and larvae of such bees. For the purposes of the income deferral rule, breeding bee stock is defined as follows:
- at any time, a reasonable estimate of the quantity of your breeding bees held at that time in the course of carrying on a farming business using a unit of measurement that is accepted as an industry standard
Please see also:
“Breeding animals” refers to cattle, sheep, bison, elk, deer and other “grazing ungulates”, as well as horses that are more than 12 months old and kept for breeding purposes.