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

Federal agriculture minister Lawrence MacAulay announced Nov. 6 that no tax need be paid in 2016 and 2017 on compensation received for animals destroyed in the tuberculosis investigation.

In 2018, 83 percent of compensation received will be included in income and will be taxable. In 2019, 11 percent will be included and in 2020 six percent will be included in income.

About 11,500 cattle were de-stroyed 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.

“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,” said Alberta Beef Producers beef production specialist Karin Schmid.

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,” Schmid said.

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 had been released from quarantine and all but five affected premises had 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 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 may have entered the TB index herd in the past five years, is still underway, said Schmid. Initially, 170 producers were contacted but 67 herds will be tested.

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 stay quite in front of the rumour mill.”

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

The CFIA plans to change its policy as a result of this investigation, including future presumption that cats, dogs and horses are free of TB unless there’s some pressing reason to think otherwise.

MacAulay also announced livestock tax deferral provisions for 2017 in various regions of the country affected by drought, flood or excess moisture.

Producers can defer a portion of their 2017 proceeds from breeding stock until 2018 to help replenish herds.