Government of Canada taking action to support drought-stricken Western producers

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Source: Agriculture and Agri-Food Canada

Today, the Minister of Agriculture and Agri-Food, the Honourable Lawrence MacAulay, announced an initial list of designated regions in British Columbia, Alberta, Saskatchewan and Manitoba where Livestock Tax Deferral has been authorized for 2023 due to extreme weather conditions.

The Government of Canada recognizes the significant challenges livestock producers in Western Canada are facing due to exceptionally dry conditions. Compounded by subsequent years of drought, pastures and forage production are significantly impacted, leading to low feed supplies for livestock. The government stands with farm families during this difficult time and is taking action to respond.

The Government of Canada has also worked quickly with the governments of British Columbia, Alberta and Saskatchewan on joint AgriRecovery assessments to examine the impacts of the drought and wildfires. Work with provinces is urgently progressing to finalize the AgriRecovery process and to determine any additional support required to cover the extraordinary costs incurred by producers.

The Livestock Tax Deferral provision allows livestock producers who are forced to sell all or part of their breeding herd due to drought or excess moisture to defer a portion of their income from sales until the following tax year. The income may be at least partially offset by the cost of reacquiring breeding animals, thus reducing the tax burden associated with the original sale.

As a preliminary list of prescribed drought and flood regions is usually completed in the early fall, designation of this provision earlier in the year helps provide assurance for producers as they make difficult herd management decisions. The Government of Canada will continue to monitor conditions across the country and will add other regions throughout the year if they meet the criteria.

Producers have access to a comprehensive suite of business risk management (BRM) programs that are the first line of defense for producers facing disasters, including AgriStability, AgriInsurance and AgriInvest. The Government of Canada has already supported requests from British Columbia and Alberta for late participation in AgriStability, as well as requests from British Columbia and Saskatchewan to increase the interim payment rate under AgriStability from 50% to 75%. Minister MacAulay also highlighted federal support for British Columbia, Alberta and Saskatchewan to make a one-year adjustment to the AgriInsurance program to make more drought-damaged crops available for feed. This increases the amount of crops available for livestock producers in this time of need.

Quotes

“My heart goes out to farmers and ranchers who are affected by these extreme weather conditions. Early designation of the Livestock Tax Deferral provision provides assurance so they can make informed decisions to manage their herds. We have also enhanced support available under BRM programs and we will continue to work closely with provinces to get producers the additional support they need as quickly as possible.”

– The Honourable Lawrence MacAulay, Minister of Agriculture and Agri-Food

Quick facts

  • The criteria for identifying regions for Livestock Tax Deferral is forage yields of less than 50% of the long-term average caused by drought or excess moisture. Eligible regions are identified based on weather, climate and production data, in consultation with industry and provinces.
  • Under the Livestock Tax Deferral provision, to defer income, the breeding herd must have been reduced by at least 15%.
  • In the case of consecutive years of drought or excess moisture and flood conditions, producers may defer sales income to the first year in which the region is no longer prescribed.
  • Producers have access to a suite of business risk management (BRM) programs to help them manage significant risks that threaten the viability of their farm and are beyond their capacity to manage.
  • AgriRecovery is not a program but a framework which forms the basis by which federal-provincial-territorial governments can work together when natural disasters occur to assess the impacts and determine whether there is need for an AgriRecovery initiative. Initiatives focus on assisting with the extraordinary recovery costs to recover from a disaster and are not intended to address revenue losses, or duplicate support already available by existing government programs, including business risk management programs.
  • The main steps of the AgriRecovery process are:
    • request for an assessment: a provincial or territorial government requests that a joint assessment of a disaster event be initiated.
    • assessment: a joint assessment is undertaken examine the disaster and impacts, determine if there are extraordinary costs and measure the capacity of existing programs to help producers recover.
    • decision and authorities: findings from the assessment form the basis on which governments decide whether or not to implement an AgriRecovery initiative.
    • agreement on the technical details: governments work together to finalize the technical details of the initiative.
    • launch of the initiative: the initiative is launched and program materials are made available.
    • payments: submitted applications are processed and payments are made to eligible producers.
  • Agriculture and Agri-Food Canada has several resources and tools under Canada’s Drought Watch to help farmers understand the extent, severity and effects of drought and plan for potential future challenges.

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