The federal government has released an initial list of regions eligible for the 2026 Livestock Tax Deferral program as producers deal with drought, excess moisture and flooding.
Agriculture and Agri-Food Minister Heath MacDonald announced the first round of prescribed regions Sept. 1, saying extreme weather can create forage shortages and force livestock producers to make difficult herd-management decisions.
The program allows producers in designated areas who are forced to sell part or all of their breeding herd because of forage shortages to defer a portion of the income from those sales until the following tax year.
Herd reduction required
To qualify, producers must reduce their breeding herd by at least 15 per cent.
The deferred income can later be partially offset by the cost of replacing breeding animals when conditions improve, helping reduce the tax impact of forced livestock sales.
Since 2024, neighbouring regions affected by similar drought, excess moisture or flooding conditions can also be prescribed under the program.
MacDonald said the measure is intended to provide producers with more flexibility while dealing with weather-related disruptions.
“Through the Livestock Tax Deferral provision, our government is giving them greater flexibility and certainty as they make important decisions about their herds and operations,” he said in a release.
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More regions could be added
The prescribed areas are selected using weather and climate information from the Canadian Drought Monitor.
The federal government says it will continue monitoring conditions throughout the growing season and can add regions where drought, excess moisture or flooding significantly reduces forage production.
Producers are also being encouraged to use other business risk management programs, including AgriStability, AgriInsurance and AgriInvest, when dealing with losses beyond their ability to manage.