2023–24 Livestock Tax Deferral Regions

Summary#

The final rule titled Regulations Amending the Income Tax Regulations (2023–2024 Livestock Deferral) updates which local areas are eligible for a special tax deferral when farmers must sell breeding livestock because of drought, flood or excess moisture. It makes the lists for 2023 and 2024 official and retroactive, and was published on October 8, 2025.

What it does#

• Adds many specific local areas across Manitoba, British Columbia, Saskatchewan, Alberta, Yukon, the Northwest Territories and Nunavut to the list of places where farmers can use the livestock tax deferral for the 2023 and 2024 taxation years.
• Confirms the government’s previously announced lists (posted by Agriculture and Agri-Food Canada) by putting them into the Income Tax Regulations so people who already relied on the announcements are covered.
• Makes the changes apply retroactively to the relevant taxation years; the rule takes effect on January 1 of each taxation year it covers.
• Keeps the existing deferral rules: a herd reduction of at least 15% is required to qualify; when reduction is 15%–29.9%, up to 30% of net sale income can be deferred; when reduction is 30% or more, up to 90% can be deferred.
• Notes the list-building process has been sped up so preliminary regional recommendations come earlier in the year (now around May or June rather than July or August).

Who's affected#

• Farmers and ranchers who ran breeding livestock (cattle, sheep, goats, horses over 12 months, and breeding bees) in the newly listed areas and who sold breeding stock in 2023 or 2024 because of drought, flood or excess moisture.
• Many of these farmers are small businesses; the rule was assessed under the small business lens.
• The Canada Revenue Agency and the Department of Finance in the sense that the change affects how those sales are reported and assessed.
• If you are unsure whether your specific municipality or census subdivision was added, the lists are long and the exact names are in the regulation and on the AAFC Livestock Deferral web page.

Why it matters#

• It prevents farmers who had to sell breeding livestock because of extreme moisture conditions from getting a big tax bill in the year of sale when they cannot replace animals in the same year.
• The deferral lets farmers use sale proceeds to rebuild breeding herds and defer tax until a year when restocking is possible, smoothing cash flow during a hardship.
• The change is expected to be small in cost to the government (unlikely to reach or exceed $1 million annually) but meaningful to affected farmers.
• By putting the regional lists into the regulations, it removes uncertainty for farmers who already acted based on earlier public announcements and avoids administrative reassessments.