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Flooded Livestock Farmers Win Tax Deferral Battle

“To help just on one extreme and not the other really didn’t make sense.”


Manitoba producers who couldn’t harvest hay last summer because of excess moisture will now qualify for income tax deferrals on proceeds from livestock sales.

The measure announced March 5 corrects an imbalance between flooded farmers, who previously didn’t qualify for tax relief, and drought-affected producers who did.

“This is a huge thing that has been changed to help flooded areas,” said Joe Bouchard, Manitoba Cattle Producers Association president. “To help just on one extreme and not the other really didn’t make sense.”

About 850 cattle producers in 14 Interlake and Westlake municipalities who were forced to sell animals because of abnormally heavy rainfall are eligible for a one-year tax deferral on 2008 income from those sales.

The measure under the Income Tax Act previously applied only in case of drought.

The retroactive tax measure will enable farmers who don’t have enough feed for the winter to plan for next year, said James Bezan, Conservative MP for Selkirk-Interlake, whose rural constituency was hard hit by last summer’s flooding.

“Now they can say with confidence, I’m going to sell out and I’m not going to be nailed with a big tax bill at the end of all of this. I’ll be able to move that money forward to the next fiscal year and buy back in,” he said.

Bezan said some producers, forced to sell between $200,000 and $300,000 worth of cattle last fall because of feed shortages, feared they would have to pay a 40 to 50 per cent tax rate without a deferral.

Producers from another 13 municipalities in southwestern Manitoba forced to sell cattle because of drought will also receive a one-year deferral on 2008 income from those sales.

Bezan, federal Agriculture

Minister Gerry Ritz and Manitoba Agriculture, Food and Rural Initiatives Minister Rosann Wowchuk announced the measures March 5.

A press conference was delayed for one hour until a ways and means motion to include flooded farmers was tabled in the House of Commons.

Producers who reduced their breeding herds by at least 15 per cent are eligible for the deferrals. Thirty per cent of income from net sales can be deferred if a herd has been reduced by at least 15 per cent but less than 30 per cent. A reduction of 30 per cent or more results in a 90 per cent deferral.

Producers will also receive assistance to buy feed and restore forage crops. Payments of up to $40 an acre are available to reestablish forage crops, forage seed fields and pastures affected by flooding in 2008. Cattle producers can receive $70 per breeding animal to help buy feed.

The Canadian Cattlemen’s Association hailed tax deferral for flooded farmers as a beachhead toward a farm disaster program under the Growing Forward agricultural policy framework.

“Extending tax deferral benefits to any Canadian producer experiencing business interruption due to floods or storms is a great first step in developing a comprehensive national disaster recovery program,” CCA president Brad Wildeman said in a statement. [email protected]

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