The Honourable Jim Flaherty, Minister of Finance, today tabled in the House of Commons a Notice of Ways and Means Motion proposing tax amendments to help farmers who have had to deplete their breeding herds of grazing livestock as a result of flood or excessive moisture.
These income tax amendments will extend the existing rules that apply to farmers in prescribed drought regions. They will permit farmers, who dispose of such breeding livestock in a taxation year because of flood or excessive moisture, to exclude a portion of the sale proceeds from their incomes until the following taxation year. As a result, the full amount of the proceeds eligible for the deferral will be available to replenish their herds in the following taxation year.
In particular, this tax deferral will apply to sales of breeding herds of grazing livestock in a taxation year in regions that are prescribed, on the advice of the Minister of Agriculture and Agri-Food, as suffering from flood or other excessive moisture conditions significantly affecting forage yields in the year. This new measure will apply to the 2008 and subsequent taxation years. For 2008, 14 rural municipalities (St. Laurent, Coldwell, Eriksdale, Grahamdale, Fisher, Bifrost, Siglunes, Armstrong, Gimli, Alonsa, Mossey River, Ethelbert, Mountain South and Lawrence) and adjacent First Nations (Peguis, Fisher River, Lake Manitoba, Ebb and Flow, Sandy Bay, Little Saskatchewan, Lake St. Martin, Dauphin River, Kinonjeoshtegon, O-Chi-Chak-Ko-Sipi, Skownan and Pinaymootang), will qualify for the program, having suffered at least a 75 per cent decline in forage yields.
As with the existing rules applicable in respect of prescribed drought regions, the tax deferral will apply to unusually heavy sales, with the proportion of sales proceeds eligible for deferral rising with increasing levels of sales. The deferral will apply to proceeds from sales of grazing livestock where such sales result in a reduction of 15 per cent or more of the number of animals in a farmer’s breeding herd. For sales which result in a reduction in excess of 15 per cent and less than 30 per cent of the breeding herd, 30 per cent of the proceeds will be eligible for the deferral, while 90 per cent of the proceeds will be eligible for the deferral in respect of sales of 30 per cent or more of the animals in the herd.
Minister Flaherty announced the intention of the Government to introduce legislation to implement this proposal at the earliest opportunity.
For further information, media may contact:
Chisholm Pothier
Press Secretary
Office of the Minister of Finance
613-996-7861
Jack Aubry
Media Relations
Department of Finance
613-996-8080
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