Ranch operations hit by TB likely to see added tax deferrals

MEDICINE HAT, Alta. — Alberta and Saskatchewan ranchers affected by the discovery and investigation of bovine tuberculosis last year are likely to see an improved set of income tax deferrals.

About 11,500 cattle were destroyed as part of the Canadian Food Inspection Agency’s investigation and control measures and owners of those cattle received compensation.

About $40 million has been distributed to date, according to ABP data.

Depending on the number of cattle involved, payouts resulted in fairly large amounts of money subject to taxation for some of the affected ranchers so efforts have been made to extend tax deferral measures.

“Right now, any income that you get from a reportable disease … income can be deferred for one year at 100 percent,” said Alberta Beef Producers beef production specialist Karin Schmid.

“In a lot of these cases, we’re looking at pretty big numbers, and it would take some of these guys some time to restock back to the level that they were at, so we’ve asked for that (tax deferral) to be extended for two more years.”

The proposal is to allow that income to be spread over two years at 18 percent and eight percent, respectively. It has yet to be approved by Treasury Board but Schmid and ABP director Brad Osadczuk said the change looks likely.

In addition to compensation for cattle, ranchers also had access to $7.1 million in funds from the Canada-Alberta Bovine Tuberculosis Assistance Initiative through the federal Agri-Recovery program.

That money covered such things as extra feed or improved facilities needed to hold cattle in quarantine, extra wells or livestock water access and some cleaning and disinfection.

“Any extraordinary cost that wouldn’t have been incurred as part of normal business, due to the extended quarantines,” said Schmid.

Bovine TB was discovered in one Alberta cow when it was slaughtered at an American plant in 2016. It triggered a full investigation by CFIA, in which five more infected animals were found, all from the same herd and carrying the same strain of the illness.

As of Oct. 26, 17,500 cattle have been released from quarantine and all but five affected premises have undergone cleaning, disinfection and a fallow period. That allows them to restock.

Some have done so and have already been tested to ensure freedom from bovine TB, said Schmid. A second test will also be required next fall.

The trace out of animals that may have come in contact with infected ones is also largely complete. Three trace-out herds remain in quarantine and are scheduled for testing this fall.

Checking the trace-in herds, those that sold animals to the TB index herd in the past five years, is still underway, said Schmid. Initially, 170 producers were contacted but 67 will be tested and some of that has already occurred.

Among the trace-in herds, 29 are in Alberta, 35 in Saskatchewan and three in Manitoba.

Schmid said the CFIA improved its communication about the investigation after early issues, but “however much (ABP) tried to communicate… we never managed to say quite in front of the rumour mill.”

However, each affected producer now has a dedicated case officer to answer questions and schedule testing dates.

Schmid also said CFIA plans to change its policy as a result of this investigation, including future presumption that cats, dogs and horses will be presumed safe unless there’s some pressing reason to think otherwise.

“This is the largest and most complex investigation CFIA has ever gone through,” said Schmid.

Contact barb.glen@producer.com

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