Glacier FarmMedia — The Government of Canada has extended the tax deferral period for livestock producers affected by bovine tuberculosis in 2024 and 2025.
On March 27, federal Agriculture Minister Heath MacDonald announced that the government will propose amendments to the Income Tax Act to extend the income tax deferral period for livestock producers in Alberta, Saskatchewan and Manitoba.
Eligible producers received compensation for their animals to be destroyed due to bovine tuberculosis in 2024 and 2025.
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This action is a response to concerns from livestock producers about the challenges of replenishing their herds during the same tax year that they received compensation.
Under the Health of Animals Act, the Canadian Food Inspection Agency provided compensation to livestock producers whose animals were destroyed in 2024 and 2025 due to the bovine TB outbreak.
A section of the Income Tax Act allows for only a one-year deferral, but the proposed amendments will allow livestock producers to defer compensation for a prescribed schedule from 2026 to 2030, enabling them to have greater flexibility to manage their incomes and sustain their operations as they rebuild their herds.
Producers who received amounts as compensation in 2025 or 2026 under the Health of Animals Act because they had to destroy their animals due to tuberculosis outbreaks will have the option of including those amounts in income for tax purposes as follows:
- Up to 100 per cent of the compensation deferred to the 2027 tax year, with at least 83 per cent included in income in 2027.
- Up to 17 per cent of the compensation deferred to the 2028 tax year, with at least nine per cent included in income in 2028.
- Up to eight per cent of the compensation deferred to the 2029 tax year, with at least four per cent included in income in 2029.
- Up to four per cent of the compensation deferred to the 2030 tax year, with the remaining four per cent included in income in 2030.
