Government of Canada announces extended tax deferral period for livestock producers affected by 2024 and 2025 bovine tuberculosis events

OTTAWA, ON, March 27, 2026 /CNW/ - 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.

Quote

"Canada's producers are the backbone of our rural communities and are essential to our agri-food success story. This extended tax deferral period would address the unique realities faced by producers as they rebuild their herds after animal health events. The Government of Canada remains committed to giving producers the support and stability they need to keep the sector strong and resilient."

- The Honourable Heath MacDonald, Minister of Agriculture and Agri-Food

Quick Facts

• The extended tax deferral schedule was developed following engagement with livestock producers and collaboration with the Canadian Cattle Association and reflects the time needed for herd replenishment.
• Under the Health of Animals Act, compensation is designed to help producers recover from extraordinary losses due to federally reportable animal diseases.
• The Government recognizes that producers may face challenges in replenishing their herds following a disease event. In some cases, replacement purchases may extend over several years. In 2017, the Government of Canada announced an extended tax deferral period for producers who received compensation under the Health of Animals Act due to the 2016 and 2017 bovine tuberculosis outbreak in Alberta and Saskatchewan that forced the destruction of livestock.
• To help producers manage the impacts of extreme weather on forage yields, producers also have access to the Livestock Tax Deferral Provision. In February 2026, new regions were added to the final list of prescribed regions for the 2025 Livestock Tax Deferral. The Livestock Tax Deferral provision allows farmers that carry on a farming business in a prescribed area, who sell all or part of their breeding herd due to drought, excess moisture, or flooding, to defer a portion of sale proceeds to the following year.

Additional Links

• Bovine tuberculosis investigations
• Health of Animals Act – Compensation for Destroyed Animals and Things Regulations
• 2025 Livestock Tax Deferral for regions impacted by drought, excess moisture or flooding

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SOURCE Agriculture and Agri-Food Canada

Contacts: For media: Jennica Klassen, Director of Communications, Office of the Minister of Agriculture and Agri-Food, [email protected]; Media Relations, Agriculture and Agri-Food Canada, Ottawa, Ontario, 613-773-7972, 1-866-345-7972, [email protected]