Res #: 23-03M
Responses Received: No
Departments: Agriculture and Agri-Food Canada
Resolution No. 23-03M
WHEREAS, parts of Saskatchewan have experienced a severe drought during 2003 leaving these areas with little hay and pasture; and
WHEREAS, these conditions have forced many livestock producers to sell their breeding herds and/or prevented them from re-establishing herds that were sold off as a result of previous droughts; and
WHEREAS, the Canada Customs and Revenue Agency has permitted producers in this situation to defer income (for income tax purposes) from the sale of breeding stock in previous years, in order to accommodate those planning to re-establish their herds; and
WHEREAS, this deferral permits the producer to reinvest the entire proceeds of the previous sale to restock his farm without losing a portion of income tax;
THEREFORE BE IT RESOLVED, that SARM lobby the Federal Government to establish a deferral, for income tax purposes, on the sale of breeding stock necessitated by the current drought; and
BE IT FURTHER RESOLVED, that prior year deferrals be extended for 2003 where the producers could not re-stock their farms due to the drought conditions.
Response from the Honourable Bob Speller, Minister of Agriculture and Agri-Food Canada:
With regard to the Tax Deferral Program, producers in designated areas are eligible to take advantage of this initiative when filing their 2003 income tax returns. Tax deferral allows producers who are forced to sell breeding livestock as a result of drought to defer a portion of the sale proceeds to the following tax year, when these proceeds may be at least partially offset by the cost of reacquiring breeding animals.
Programs like the Tax Deferral Program are important in producers' decision making processes. I am pleased to inform you that, on December 19, 2003, I announced initial areas of eligible for the Tax Deferral Program for 2003. As well, on January 27, 2004, I announced the extension of the areas initially designated in December to include additional areas of Manitoba, Saskatchewan and Alberta.
Because of the extension effects of the drought across Western Canada, we have designated a further 74 areas to the 168 areas previously designated for tax deferral on 2003 income from drought-induces sales of breeding stock. The latest listing of the designated aras can be found at the following web site: https://www.agr.gc.ca/pfra/drought/program_e.htm .
I have also enclosed a copy of the press release concerning the January 27 announcement and the listing for the 2003 final designations. Discussion with industry representatives in 1990 led to a decision that tax deferral would only be requested if drought impact was significant. "Significant" was defines as forage yield s of less that 50 per cent of the long-term average, and an area that is large enough to have an impact on the industry. Impacts in individual municipalities would not result in a designation.