The Government of Canada recognizes the vital role that livestock producers play in supporting Canada’s agri-food sector, which drives economic growth and supports the prosperity of rural communities across the country. When unexpected animal health events occur, we are committed to providing effective support to help producers recover and rebuild.
Today, the Honourable Heath MacDonald, Minister of Agriculture and Agri-Food, announced that the Government intends to propose amendments to the Income Tax Act to extend the income tax deferral period for livestock producers in Alberta, Saskatchewan, and Manitoba who received compensation for animals ordered to be destroyed due to the 2024 and 2025 bovine tuberculosis events. This measure responds to concerns from livestock producers about the challenges of replenishing their herds during the same tax year in which they received the compensation.
Under the Health of Animals Act, the Canadian Food Inspection Agency provided compensation to livestock producers whose animals were ordered to be destroyed due to the 2024 and 2025 bovine tuberculosis outbreak. While section 80.3 of the Income Tax Act currently allows for a one-year income deferral, the proposed amendments would allow affected livestock producers to defer this compensation over a prescribed schedule from 2026 to 2030, providing them with greater flexibility to manage their incomes and sustain their operations as they rebuild their herds.
As a result, producers who received amounts as compensation in 2025 or 2026 under the Health of Animals Act as a consequence of the forced destruction of their livestock because of the 2024 and 2025 bovine tuberculosis outbreaks would have the option of including those amounts in income for tax purposes, as follows:
- up to 100% of the compensation deferred to the 2027 tax year, with at least 83% included in income in 2027;
- up to 17% of the compensation deferred to the 2028 tax year, with at least 9% included in income in 2028;
- up to 8% of the compensation deferred to the 2029 tax year, with at least 4% included in income in 2029; and
- up to 4% of the compensation deferred to the 2030 tax year, with the remaining 4% included in income in 2030.
The Government of Canada will continue working with industry and provincial partners to protect animal health, support sector resilience, and ensure producers have the resources they need to sustain their livelihoods and rural communities.
(AAFC news release)
