Government expands applicability of Livestock Tax Deferral


Farmers and ranchers across Western Canada are grappling with especially brutal drought conditions this year, due to low precipitation and scorching temperatures throughout much of the spring and summer. With crop and feed yields a fraction of what an average year would bring, as well as skyrocketing hay prices, livestock producers are facing significant uncertainty about how they will manage to feed their herds in the months to come. For some, selling a significant percentage of their herd may be the only way forward. 

The Livestock Tax Deferral (LTD) provision allows eligible livestock producers some reprieve from the tax burden arising from income earned on the sale of their herd. This provision permits those in prescribed drought and flood regions who sell part of their breeding herd due to drought, flooding or excessive moisture to defer a portion of the income arising from a sale of their breeding herd. Income can be deferred if the breeding herd has been reduced by at least 15%. Where the reduction in the breeding herd is at least 15% but less than 30%, 30% of the income from net sales can be deferred. Similarly, where the reduction in the breeding herd is 30% or more, 90% of income from net sales can be deferred. The income from net sales can be deferred to the earliest of: 

  • The first taxation year in which the region is no longer prescribed by the government; 
  • The first taxation year at the end of which the taxpayer is a non-resident and not carrying on business through a fixed place of business; and 
  • The taxation year in which the taxpayer dies. 

While the LTD provision is not new, the list of prescribed drought and flood regions is updated annually. Given the unfavourable conditions across much of the country, the 2021 list of prescribed regions has been extended to include additional impacted regions. 



Subscribe to our newsletters



Contact us by phone +1.855.420.8473 or submit your questions, comments or proposal requests


Maria Severino

National Tax Leader

Recent Tax Alerts

International tax reform - landmark agreement reached by 136 countries

OECD countries, including Canada, have agreed on the elements of the landmark two-pillar plan on international tax reform.

  • October 15, 2021

Federal election results 2021

The results are in and the Liberals have formed another minority government, what does this mean for taxpayers?

  • September 22, 2021

Government expands applicability of Livestock Tax Deferral

Due to ongoing drought conditions, the government expanded the list of 2021 prescribed regions eligible for Livestock Tax Deferral.

  • September 15, 2021

2021 Federal Election: A comparison of the parties’ tax proposals

With Canadians heading to the polls on Sept. 20, the federal parties’ campaigns have proposed a number of potential tax changes.

  • September 13, 2021

Finance releases details of proposed luxury tax

Finance released details of Luxury Tax proposed to apply to the sale and importation of aircraft, new vehicles and boats of a certain value.

  • August 25, 2021