Livestock producers in parched parts of western Quebec and southern and eastern Ontario will get to put off paying the income tax owing on sales of breeding livestock this year.
The federal government on Monday designated specific drought-affected areas in which producers can ask for a deferral on taxable income from the sale of breeding stock when they file their tax returns for 2012.
In Ontario, this round of designations includes the Brant, Haldimand-Norfolk, Hamilton and Ottawa census divisions; the regional municipalities of Halton, Niagara and Waterloo; the District Municipality of Muskoka; the District of Parry Sound; the United Counties of Prescott and Russell; and the counties of Bruce, Dufferin, Grey, Huron, Lanark, Oxford, Perth, Renfrew and Wellington.
In Quebec, the areas designated as of Monday include the regional county municipalities (MRCs) of Pontiac, Papineau and Les Collines-de-l’Outaouais, plus the territory equivalent (TE) of Gatineau.
"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," Pierre Lemieux, the federal parliamentary secretary for agriculture and MP for Glengarry-Prescott-Russell, said in a release.
"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."
"This summer’s hot and dry weather has drastically reduced feed supplies for many Ontario and Quebec farmers, forcing them to make some tough herd management decisions," federal Agriculture Minister Gerry Ritz said in the same release.
"With a tax deferral, producers will have some breathing room by being able to redirect money towards replenishing next year’s breeding stock and get back to business."
To defer said income, a producer’s breeding herd must have been reduced by at least 15 per cent. If that’s the case, 30 per cent of income from net sales can then be deferred.
In cases where a herd has been reduced by more than 30 per cent, then 90 per cent of income from net sales can be deferred.
Proceeds from deferred sales are included as income in the next tax year, when they can be offset, at least in part, by the cost of reacquiring breeding animals.
If an area is consecutively designated for two years or more in a row, producers can defer sales income to the first year in which the area is no longer designated.