The federal government is proposing changes to the Income Tax Act that would give livestock producers more time to manage compensation payments received after bovine tuberculosis (TB) outbreaks in 2024 and 2025.

Agriculture and Agri‑Food Canada says the proposed amendments are aimed at producers in Alberta, Saskatchewan and Manitoba who were ordered to destroy livestock and received compensation under the Health of Animals Act.

Compensation could be spread over multiple years

Currently, compensation payments are typically included as income within one tax year. Under the proposed changes, producers who received compensation in 2025 or 2026 would be able to spread that income over several years, from 2026 through to 2030.

The proposed schedule would allow the largest portion of compensation to be reported in 2027, with smaller portions included in subsequent years.

• 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.

Government cites herd‑rebuilding challenges

Agriculture and Agri‑Food Canada says the measure responds directly to concerns from livestock producers about the difficulty of replenishing herds within the same tax year that compensation is received.

The department notes that replacing livestock after a disease outbreak can take several years, depending on availability and production cycles.

Based on previous outbreaks and consultations

The extended deferral schedule was developed following engagement with livestock producers and collaboration with the Canadian Cattle Association.

The federal government previously implemented a similar measure following bovine tuberculosis outbreaks in 2016 and 2017.

AAFC says it will continue working with industry and provincial partners to support animal health, sector resilience and long‑term recovery for affected producers.

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