Livestock Tax Deferral Regions 2018–2022

Summary#

The final rule titled Regulations Amending the Income Tax Regulations (2018 to 2022 Livestock Deferral) adds lists of specific towns, municipalities and census subdivisions that qualify for a special livestock tax deferral for the 2018, 2019, 2020, 2021 and 2022 taxation years. It confirms that the changes are retroactive and take effect January 1 of each respective taxation year. The item appeared in the Canada Gazette on February 14, 2024 (registered February 2, 2024).

What it does#

• Puts into the Income Tax Regulations exact lists of the Consolidated Census Subdivisions (by province and year) that qualify as drought or excess‑moisture regions for the livestock deferral for 2018–2022.
• Confirms the rules for how much sale income a farmer can defer when forced to sell breeding animals because of those conditions:
  • If the breeding herd fell by at least 15% but less than 30%, 30% of net sales income can be deferred.
  • If the breeding herd fell by 30% or more, 90% of net sales income can be deferred.
• Makes the regulatory changes retroactive, applying from January 1 of each year listed (so farmers who already used the deferral for those years keep it).
• Formalizes lists that had already been published earlier by Agriculture and Agri‑Food Canada for each year.

Who's affected#

• Farmers and farm businesses in the many specific towns, municipalities and census subdivisions named in the regulation across provinces including Ontario, Quebec, New Brunswick, Manitoba, British Columbia, Saskatchewan and Alberta (the regulation lists the areas in detail by year).
• Small farm businesses in those areas are the primary group that will notice this change.
• The Canada Revenue Agency will use the updated regulation when assessing or reassessing tax returns for those years.
• If it is unclear whether a particular town or municipality is included, check the detailed lists in the regulation or the Agriculture and Agri‑Food Canada web page noted in the source.

Why it matters#

• The deferral helps farmers who had to sell breeding livestock because drought or flooding made it too costly to keep them. It prevents a big tax bill in the sale year when the farmer may not yet be able to buy replacements.
• It protects previously announced taxpayer positions by putting those lists into law, avoiding the administrative burden and uncertainty of later CRA reassessments for years 2018–2022.
• The government estimates the annual cost (lost or deferred tax revenue) is small — unlikely to reach or exceed $1 million per year — so the change is intended mainly to stabilize farm businesses after extreme weather.