Canada proposes extended tax deferral for livestock losses
Measure targets TB-related herd destruction in Prairie provinces
30 March 2026
1 minute read
By: The government of Canada 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, according to a government-issued press release.
The measure follows concerns from producers about the difficulty of replenishing herds within the same tax year in which compensation was received.
Under the Health of Animals Act, the Canadian Food Inspection Agency provided compensation to producers whose animals were ordered to be destroyed due to the 2024 and 2025 bovine tuberculosis outbreak. Section 80.3 of the Income Tax Act currently allows for a one-year income deferral.
The proposed amendments would allow affected producers to defer this compensation over a schedule from 2026 to 2030.
Producers who received compensation in 2025 or 2026 would have the option of including those amounts in income for tax purposes as follows:
- up to 100% deferred to the 2027 tax year, with at least 83% included in income in 2027;
- up to 17% deferred to the 2028 tax year, with at least 9% included in income in 2028;
- up to 8% deferred to the 2029 tax year, with at least 4% included in income in 2029;
- up to 4% deferred to the 2030 tax year, with the remaining 4% included in income in 2030.
The extended deferral schedule was developed following engagement with livestock producers and collaboration with the Canadian Cattle Association, reflecting the time required for herd replenishment.
Compensation under the Health of Animals Act is intended to support recovery from losses due to federally reportable animal diseases. A similar extended deferral period was introduced in 2017 following the 2016 and 2017 bovine tuberculosis outbreak in Alberta and Saskatchewan.
Producers may also access the Livestock Tax Deferral Provision, which allows farmers in prescribed regions who sell part of their breeding herd due to drought, excess moisture or flooding to defer a portion of sale proceeds to the following year.
