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.

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 said the minister.

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.

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