Toronto, ON – Ontario’s horse racing industry is already struggling with high inflation and stagnant purses, but participants from both the Thoroughbred and Standardbred industries say outdated and restrictive tax laws threaten the future of an industry that supports 23,000 full-time equivalent jobs in the province.
They say current Canadian tax laws are a disincentive for people to buy racehorses in Canada, especially when compared to recent U.S. tax law changes that have already proven to encourage the purchase of racehorses. Fewer Canadian buyers further hurts the Ontario horse breeders that are the lifeblood of one of the province’s largest agricultural sectors.
In Canada, Section 31 of the Income Tax Act states that a person that owns horses as a hobby business may only write off a maximum of C$17,500 of losses annually in the horse racing business against their main business.
In the U.S., President Donald Trump’s “Big Beautiful Bill,” which was signed into law this summer, allows horse owners to write off 100% of bonus appreciation for horse losses. We’ll spare you the accounting details, but if you want to read more about them, you can do so here or at Fairness for Farmers, the National Thoroughbred Racing Association and Harness Racing Update.
Many media stories, including this one in The Paulick Report, show 100% bonus depreciation has already had a huge positive impact on Thoroughbred yearling sales in Saratoga and Lexington – both of which shattered sales records.
“It seems like that whatever tax change they have made in the United States have been very successful as far as parting people from their from their wallets,” said Glenn Sikura, owner of Hill ‘n’ Dale’s Thoroughbred breeding operation in King City, ON. “Those horses in Saratoga were really nice horses, but, wow, the average was through the roof.” The bottom line is this: Horse owners in the United States have a massive tax incentive to invest in racehorses. In Canada, the tax laws are driving investment away from Ontario’s horse racing industry.
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