Hill Welcomes Tax Deferral for Drought-Stricken Ranchers in Northern BC

Tuesday, December 12, 2006

OTTAWA – The Honourable Jay Hill, Member of Parliament for Prince George-Peace River and Chief Government Whip, welcomed today’s announcement that drought-stricken livestock producers in northern British Columbia will receive a tax reprieve from the federal government.

The Honourable Chuck Strahl, Minister of Agriculture and Agri-Food, announced today that livestock producers who were forced sell all or part of their herd this year due to drought conditions will be eligible for a one-year federal tax deferral on 2006 income from these sales.

“I know through our many discussions about the drought in northern BC, that Minister Strahl has been keen to offer some form of financial relief to producers,” said Mr. Hill. “Farmers come first in our caucus and I am extremely pleased that the Minister has once again delivered on his commitment to ranchers.”

“Through this deferral, Canada’s New Government is offering producers who choose to sell their cattle an important tax saving on the income received, allowing them to use these savings when restocking their herds in the spring,” said Minister Strahl. “As such, it’s a very valuable tool for producers recovering from the impacts of drought.”

The tax deferral will apply to owners of breeding livestock in the Regional Districts of Bulkley-Nechako, Fraser-Fort George, Kitimat-Stikine and Peace River in British Columbia. Precipitation levels, soil moisture and available forage yield for the 2006 growing season demonstrated the need for the deferral.

To defer income, the breeding herd must have been reduced by at least 15 per cent. Thirty per cent of income from net sales can be deferred if the breeding herd has been reduced by at least 15 per cent, but less than 30 per cent. Where the herd has been reduced by 30 per cent or more, 90 per cent of income from net sales can be deferred. Eligibility for deferral was made on the advice of Minister Strahl to Minister of Finance, Jim Flaherty.

The 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. In the case of consecutive years of drought designation, producers may defer sales income to the first year in which the area is no longer designated. Eligible producers will be able to request this deferral when filing their 2006 income tax returns. Livestock producers are advised to contact their local Canada Revenue Agency Tax Services Office for details on the income tax provisions.

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For more information, please contact:
Jay Hill, M.P. (613) 947-4524 or (250) 787-1194