Regulations Amending the Compensation for Destroyed Animals Regulations: SOR/2024-224

Canada Gazette, Part II, Volume 158, Number 25

Registration
SOR/2024-224 November 12, 2024

HEALTH OF ANIMALS ACT

The Minister of Agriculture and Agri-Food makes the annexed Regulations Amending the Compensation for Destroyed Animals Regulations under section 55^{footnote a} of the Health of Animals Act ^{footnote b}.

Ottawa, November 8, 2024

Lawrence MacAulay
Minister of Agriculture and Agri-Food

Regulations Amending the Compensation for Destroyed Animals Regulations

Amendments

1 The title of the Compensation for Destroyed Animals Regulations ^{footnote 1} is replaced by the following:

Compensation for Destroyed Animals and Things Regulations

2 (1) The portion of subsection 3(1) of the Regulations before paragraph (a) is replaced by the following:

3 (1) Compensation for the following costs related to the destruction of an animal or the disposal of a carcass or thing may be paid to the owner:

(2) Paragraph 3(1)(a) of the Regulations is amended by striking out “and” at the end of subparagraph (i) and by adding the following after subparagraph (i):

• (i.1) the reasonable costs of labour for the owner’s personal labour in transporting the animal to the abattoir, to a maximum amount equal to the amount that a local agricultural worker would normally be paid for the work, and

(3) The portion of paragraph 3(1)(b) of the Regulations before clause (iii)(B) is replaced by the following:

• (b) subject to subsection (3), if the animal is destroyed or required to be destroyed under paragraph 27.6(1)(b) or subsection 48(1) of the Act other than by slaughter at an abattoir and it is destroyed or its carcass or the thing is disposed of within the period and in the manner specified in the notice of requirement delivered or sent under subsection 27.6(3) or 48(3) of the Act,
  • (i) the reasonable costs of transporting the animal to the place of destruction or transporting the carcass or thing to the place of disposal that were paid or incurred by the owner, to a maximum amount equal to the amount that a commercial trucker would normally charge for that service,
  • (ii) the reasonable costs that were paid or incurred by the owner for cleaning and disinfecting the conveyance used to transport the animal, carcass or thing, to a maximum amount equal to the amount that a commercial service would normally charge for that service,
  • (iii) the reasonable costs, to a maximum amount equal to the amount that a commercial service would normally charge to destroy the animal or dispose of the carcass or thing, that were paid or incurred by the owner
    • (A) if the owner destroyed the animal or disposed of the carcass or thing, for the supplies, equipment and labour expended to do so, or

(4) Clause 3(1)(b)(iii)(B) of the English version of the Regulations is replaced by the following:

• (B) if a commercial service was used to destroy the animal or dispose of the carcass or thing, for that service, and

(5) Paragraph 3(1)(b) of the Regulations is amended by adding the following after subparagraph (iii):

• (iv) the reasonable costs of labour, to a maximum amount equal to the amount that a local agricultural worker would normally be paid for the work, for the owner’s personal labour in
  • (A) transporting the animal to the place of destruction or transporting the carcass or thing to the place of disposal,
  • (B) cleaning and disinfecting the conveyance used to transport the animal, carcass or thing, or
  • (C) destroying the animal or disposing of the carcass or thing.

(6) Section 3 of the Regulations is amended by adding the following after subsection (2):

(3) Compensation for costs related to the disposal of a thing may be paid only with respect to the following:

• (a) animal food;
• (b) refrigerators, refrigerator-freezers and freezers intended primarily for use in a dwelling, but not commercial or walk-in refrigerators, refrigerator-freezers and freezers;
• (c) cages, crates and nesting boxes; and
• (d) feed troughs.

3 The portion of items 9 and 10 of the schedule to the Regulations in column 3 is replaced by the following:

Item	Column 3 Maximum Amount ($)
9	10,000
10	6,000

Consequential Amendment to the Compensation for Certain Birds Destroyed in British Columbia (Avian Influenza) Regulations

4 The Compensation for Certain Birds Destroyed in British Columbia (Avian Influenza) Regulations ^{footnote 2} are amended by replacing “Compensation for Destroyed Animals Regulations” with “Compensation for Destroyed Animals and Things Regulations” in the following provisions:

• (a) the description of A in paragraph 3(1)(b) and subsection 3(2);
• (b) subsection 4(2); and
• (c) subsection 5(2).

Coming into Force

5 These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

The Health of Animals Act (HAA or the Act) provides the Minister of Agriculture and Agri-Food the authority to order an animal or thing destroyed if it poses a disease risk and to order compensation to be paid to the owner for the market value of the animal or thing ordered destroyed. The HAA also gives authority to the Minister to make regulations. The associated regulations are the Compensation for Destroyed Animals Regulations (CDAR). The CDAR sets out the parameters for awarding compensation to the owners of animals ordered destroyed by the Canadian Food Inspection Agency (CFIA). The objective of the CDAR is to encourage the early reporting of animal disease and the cooperation of owners in efforts to prevent or reduce the spread of the disease. The CDAR sets out the maximum amounts, representing an “up to” amount for animals ordered destroyed. In addition, the CDAR provides authority to enable compensation for the cost of disposal of animals ordered destroyed.

The latest outbreak of Highly Pathogenic Avian Influenza (HPAI) in Canada, which began in December 2021, is unprecedented in scale and scope. This outbreak saw the highest number of infected premises in Canada relative to past HPAI outbreaks. It was also the first time that an HPAI outbreak occurred in multiple regions at the same time. Additionally, species that were not significantly affected by HPAI during previous outbreaks, such as ducks, became infected with the disease.

The scale and scope of the latest HPAI outbreak highlighted three issues related to the current compensation regime. Two of those issues are being addressed through these regulatory amendments. While another issue related to duck compensation was initially raised, the CFIA is not proceeding with the proposed amendment at this time due to stakeholder feedback (see “Consultation” section) and the need for further analysis. In addition, it was previously identified that the maximum amounts for bison needed to be updated to reflect the current market value. The proposed amendments related to bison were prepublished in the Canada Gazette, Part I, on July 10, 2021.

Regulatory amendments to the CDAR are needed to address the issues raised during HPAI and to improve consistency. In turn, this will help to promote compliance and cooperation in disease reporting and support disease control and eradication efforts.

1. The CDAR did not allow compensation for owners’ personal labour.

The CDAR did not allow owners of animals ordered destroyed (e.g. farmers or producers) to be compensated for their own personal labour associated with completing destruction orders. In the CDAR, the costs related to the destruction and disposal of an animal eligible for compensation include the “reasonable costs paid or incurred by the owner.” Under this text, an owner is eligible to receive compensation for the cost of contracting a commercial service to carry out destruction orders. Additionally, an owner is eligible to receive compensation for the cost of an employee’s wages to complete destruction orders. However, the wording of the regulations did not provide authority to compensate an owner for their own personal labour expended to dispose of animals ordered destroyed because the regulations stated that costs must be “paid or incurred by the owner.”

During the recent HPAI outbreak, owners sometimes had to wait for commercial services to become available because they could not be compensated for undertaking destruction orders themselves. National industry associations have consistently highlighted that amending the regulations to enable compensation to owners for their own personal labour would be beneficial and help support an effective and efficient disease response. In some instances, the owner is best placed to complete destruction orders themselves, quickly and safely. This is particularly relevant in rural and remote locations, where commercial services are less available.

2. The CDAR did not authorize compensation to owners for the costs associated with the disposal of things ordered destroyed.

In the CDAR, there was an inconsistency between eligibility to receive compensation for the disposal cost associated with an animal or thing ordered destroyed. Specifically, for animals ordered destroyed, the regulatory framework provides the authority to be able to compensate owners for both the value of the animals ordered destroyed, as well as the costs associated with the disposal of the animal (e.g. transportation of the animal to a landfill), up to the amount a commercial service would normally charge. In contrast, for things ordered destroyed, while the HAA permits compensation for the value of the things ordered destroyed, the CDAR did not grant the authority to provide compensation for the costs associated with the disposal of those things (e.g. transportation of feed to a landfill).

During the recent HPAI outbreak, this inconsistency between compensation for disposal costs of animals and disposal costs of things was raised by several owners and national industry associations. There is a need to ensure consistency and alignment with the compensation approach for animals. Therefore, amendments will authorize compensation for the disposal costs of certain things ordered destroyed. In many cases, things can be ordered cleaned and disinfected rather than destroyed. The amendment only provides authority to authorize compensation for certain things when those things are ordered destroyed by the CFIA. In cases where the CFIA issues an order to clean and disinfect, compensation is not authorized.

3. The previous maximum amounts for bison were outdated.

The maximum amounts listed for bison in the CDAR were last updated in 2007. At the time, the following maximum amounts were established for bison:

• Bison (Bison bison) Bull, 1 year and older: $4,000; and
• All other bison: $2,500.

Over time, it became apparent that bison compensation amounts did not reflect the latest market value. The CFIA conducted an in-depth economic analysis, including an analysis of auction prices for breeding bison between 2009 and 2019, and confirmed that the market value had significantly increased since 2007. The analysis demonstrated a need to amend the maximum amounts for bison to more accurately reflect the current market value for the regulated categories of bison. Proposed regulatory amendments to increase the maximum amounts from $4,000 to $10,000 (for bison bull 1 year and older) and from $2,500 to $6,000 (for all other bison) were prepublished in the Canada Gazette, Part I, on July 10, 2021.

Background

Legislative and regulatory context

The HAA provides authority to the Minister of Agriculture and Agri-Food (the Minister) to order the owner of an animal or thing to destroy the animal or thing if it poses a disease risk. The Minister also has the authority to order compensation from the Consolidated Revenue Fund (CRF) to be paid to the owner for the market value of the animal or thing ordered destroyed. While unfortunate, the ordering of animals or things destroyed is meant to keep humans and other animals safe and to keep export markets open during animal disease outbreaks. To be eligible for compensation, the CFIA must order the animal or thing destroyed. No compensation is provided in cases where the CFIA issues an order to clean and disinfect. The objective of compensation is to encourage early reporting of animal disease and owner cooperation in destruction efforts. Compensation under the CDAR is not meant to provide economic support or recovery, as there are other supports at the federal and provincial/territorial level, as well as other insurance schemes. Rather, compensation is meant to provide funding to an owner for the costs associated with the destruction and in some cases, associated disposal of an animal and/or thing that is ordered destroyed by the CFIA.

Section 51 of the HAA authorizes the Minister to order compensation for animals that are ordered destroyed under the Act. Section 55 of the HAA provides authority for the Minister to make regulations to set the parameters for awarding compensation for animals. This includes establishing maximum amounts (i.e. an “up to” amount) of compensation that may be awarded and permitting compensation for costs related to disposal.

First published in 2000, the CDAR are the regulations that flow from the authorities in the Act. The CDAR includes a Schedule which lists the maximum amounts for animals ordered destroyed by species, and by production type (e.g. meat production chicken, egg production chicken). Actual compensation amounts paid to owners can be “up to” the maximum amounts included in the CDAR Schedule. In addition, the CDAR authorizes compensation for the disposal costs associated with the destruction of animals and the disposal of their carcasses. Owners are therefore eligible to receive compensation for animals that are ordered destroyed under the Act (up to the maximum amounts listed in the CDAR Schedule) and also for the associated cost for disposal of the animal. The maximum amounts for animals in the Schedule to the CDAR were completely updated in July 2007, and have since been updated for specific animals as needed, including white-tailed deer (in November 2007), poultry (in March 2011), sheep (in June 2012) and cattle (in August 2015).

Section 52 of the HAA authorizes the Minister to order compensation to owners for the market value of things ordered destroyed. Things can range from fixed assets such as building structures (e.g. floorboards of a pen), to equipment (e.g. freezers), to assets that are more variable in nature such as feed, litter and animal cages. Section 55 of the HAA also provides authority for the Minister to make regulations establishing maximum amounts for awarding compensation for things, and to permit compensation for associated disposal costs. However, things ordered destroyed were not covered by any regulation. The CDAR only provided authority for the compensation of disposal costs related to animals ordered destroyed. Therefore, owners are only eligible to receive compensation for the market value of the things ordered destroyed (assessed on a case-by-case basis), and not the associated disposal costs for any of the things ordered destroyed.

Provincial and territorial context

The CFIA is responsible for administering compensation under the CDAR. Provincial/territorial governments are not involved in the process. However, there are federal-provincial-territorial cost-shared programs that provide financial support for owners of farmed animals, such as programs under the Sustainable Canadian Agriculture Partnership (Sustainable CAP). The Sustainable CAP is a $3.5 billion, 5-year agreement (April 1, 2023, to March 31, 2028) between the federal, provincial and territorial governments to strengthen the competitiveness, innovation and resiliency of the agriculture, agri-food and agri-based products sector. The agreement includes $1 billion in federal programs and activities, and a $2.5 billion commitment that is cost-shared 60% federally and 40% provincially/territorially for programs that are designed and delivered by provinces and territories. This includes business risk management programs (AgriStability, AgriInsurance, AgriInvest and AgriRecovery) and other region-specific programs (e.g. the Government of Quebec offers the “Cervid Producer Support Program for the Eradication of Chronic Wasting Disease”) that can help provide economic support and recovery to animal owners.

Avian influenza

Avian influenza (AI), commonly known as “bird flu,” is a contagious viral infection that can affect several species of food-producing birds (e.g. chickens, turkeys and ducks), as well as pet and wild birds. AI viruses can be classified into two categories, based on the severity of the illness caused in birds: low pathogenicity avian influenza (LPAI) and HPAI. In Canada, HPAI and low pathogenicity H5 and H7 avian influenza viruses require reporting under the HAA. All cases of the disease must be reported to the CFIA by animal owners.

Most AI viruses are classified as LPAI, which typically cause little or no signs of illness in infected birds. However, HPAI can cause severe illness and death in birds. On rare occasions, AI transmission to humans has occurred through close contact with infected birds or heavily contaminated environments.

The most recent outbreak of HPAI began in December 2021, and is ongoing at the time of the publication of these amendments. As of October 2024, this HPAI outbreak resulted in more than 11 million affected birds and over $230 million in compensation being paid to owners across Canada for destroyed animals and things since December 2021.

Objective

An order to destroy an animal or thing affected by disease, while unfortunate and difficult for all concerned, is often necessary to keep humans and other animals safe and to keep export markets open. Providing compensation to owners for animals and things ordered destroyed supports early reporting of animal diseases and owner cooperation in disease control efforts, which is essential for prompt intervention. Prompt intervention minimizes the spread of disease and the magnitude of the impact on human and animal health, which in turn protects the economic viability of Canada’s farmed animal sector. The overall objective of the regulatory amendments is to address specific gaps in the existing compensation regime and improve consistency.

Description

1. Eligible labour expenses: Enabling compensation for an owner’s personal labour.

The amendment will add new subsections to the CDAR to enable compensation for an owner’s personal labour expended to destroy and/or dispose of their animals or things ordered destroyed. Owners will continue to be eligible to receive compensation for hiring a commercial service or paying an employee to complete destruction orders. However, with this amendment owners will also have the option to complete destruction orders themselves and be eligible to receive compensation for their personal labour. It is expected that this will mainly benefit unincorporated owners (i.e. sole proprietor who owns the animals; often a family business or owner-operated business), who previously were not eligible to receive compensation for their personal labour.

The method of calculating compensation amounts for owners’ personal labour will be detailed in guidance and policy documents. Compensation for an owner’s personal labour will be calculated based on the number of hours of labour used (e.g. number of hours to transport a thing) and Statistic Canada’s average hourly wage for an agricultural worker in the corresponding province/territory.

It is expected that this amendment will likely enhance the speed of response at sites where the animal owner is best positioned, capable and equipped to undertake the destruction and/or disposal activities.

2. Compensation for disposal costs of things: Authorizing and setting out parameters for compensation for the disposal costs of certain things ordered destroyed.

This amendment will enable the compensation for the costs associated with the disposal of a limited list of things ordered destroyed. This will enhance consistency between the compensation scheme for animals and the compensation scheme for things.

Specifically, the amendment will allow compensation to be provided for the costs associated with the disposal (e.g. transportation to place of disposal) of the following list of things:

• animal food (such as feed);
• non-commercial freezers and refrigerators;
• cages, crates and nesting boxes; and
• feed troughs.

The things included in the list above represent items on farms that have been ordered destroyed during past disease outbreaks under extenuating circumstances, and that would need to be replaced to continue with normal farm operations.

Things are only ordered destroyed when cleaning and disinfection is not possible. The list intentionally excludes most equipment and materials used for production purposes that should be designed and maintained in a manner to withstand cleaning and disinfection. For example, infrastructure related to animals (e.g. walls and gates) should be impermeable and should be cleaned and disinfected. Compensation is not provided to owners for orders to clean and disinfect a thing.

The list also excludes items that would be disposed of as part of normal production (e.g. litter and bedding), and other products that would not need to be replaced to continue with normal farm operations (e.g. antlers, eggs, meat products). While things not included in the list above will not be eligible for compensation related to disposal costs, owners will continue to be eligible for compensation for the market value of the thing ordered destroyed, assessed on a case-by-case basis.

Due to the addition of provisions for things in the CDAR, the title of the CDAR will also be changed to the Compensation for Destroyed Animals and Things Regulations to clarify that the regulations include both animals and things ordered destroyed.

3. Updated maximum amounts for bison.

These amendments were prepublished in the Canada Gazette, Part I on July 10, 2021. The amendments will revise the maximum amounts for bison ordered destroyed to reflect the current market value for both categories of bison (i.e. bison bull 1 year and older and all other bison). The new maximum amounts are based on the current and future market value of bison. The amount of compensation awarded will be based on the market value of the animal ordered destroyed, not exceeding the maximum amount prescribed in the CDAR.

Column 3, in items 9 and 10 of the Schedule (Section 2) to the CDAR will be amended as follows:

• Item 9: Bison (Bison bison) Bull, 1 year and older: $10,000 (previously $4,000); and
• Item 10: Bison (Bison bison) All bison other than those referred to in item 9: $6,000 (previously $2,500).

Regulatory development

Consultation

Stakeholder engagement for proposed amendments related to the HPAI outbreak

From May to July 2024, the CFIA sought stakeholder feedback on three proposed amendments related to the HPAI outbreak.

This engagement strategy included:

• Online survey (broad sector outreach): The CFIA circulated a survey to national industry associations. This survey was sent to 16 national industry associations (who further distributed the survey with their members) to seek feedback on the proposed amendments related to eligible labour expenses (owners’ personal labour) and disposal costs for things. The CFIA received 33 submissions, representing independent farmed animal producers, businesses and industry associations. The majority of respondents (76%) represented the poultry sector, while the remaining respondents were from the cattle, sheep and deer sectors.
• Webinar (targeted engagement with duck stakeholders): The CFIA hosted a webinar with duck producers focused on the proposed amendment related to the list of duck species in the Schedule of the CDAR. Six participants attended the webinar. The three major duck producers, making up approximately 85% of the Canadian industry, were represented at the webinar. Four additional stakeholders submitted feedback following the webinar, including two industry associations that submitted letters.

Proposed amendment for eligible labour expenses (owners’ personal labour)

Stakeholder reaction

Stakeholders were generally supportive of the proposed regulatory change. However, some respondents indicated that the proposed method for calculating compensation for owners’ personal labour would lead to inadequate compensation to owners.

CFIA Response

The amendment addresses a current gap in the compensation regime. The amendment will provide owners with the additional option of seeking compensation for their own labour/time used to carry out destruction or disposal orders. Compensation for owners’ personal labour will be based on Statistics Canada’s average wage rates for agricultural workers. The Statistics Canada wage rates will be used, as they are publicly available, ensure consistency, take into account regional differences and are updated annually. Owners will still have the option to hire a commercial service or pay an employee to carry out destruction or disposal orders and seek compensation for those costs.

Proposed amendment for disposal costs for certain things

Stakeholder reaction

Most stakeholders were supportive of the proposed regulatory change. However, some respondents expressed that the proposed list of things should be expanded or broadened to include additional things that have been ordered destroyed and cannot be easily cleaned and disinfected.

CFIA Response

The term “things” is not clearly defined in the HAA or CDAR. As such, a list of eligible things is required to establish parameters on what would be permitted for compensation for the disposal costs of things ordered destroyed. When developing the list of things eligible for compensation for disposal costs, the CFIA considered various scenarios where things could be ordered destroyed. This included an analysis of: a) things or items that have been ordered destroyed during previous disease outbreaks; b) things that have a replacement value; and c) things that if ordered destroyed, would need to be replaced for normal farm operations to continue. Additionally, things that can be cleaned and disinfected would not be captured in this list. That is why the list excludes most equipment and materials used for production purposes, as they are designed and maintained in a manner to withstand cleaning and disinfection. Compensation is not provided to owners for orders to clean and disinfect a thing. The list also excludes items that would be disposed of as part of normal production (e.g. litter and bedding), and other products that would not need to be replaced to continue with normal farm operations (e.g. antlers, eggs and meat products).

It is important to note that the amendment to add to the list of things applies only to compensation for the disposal costs for things ordered destroyed. Owners will continue to be able to receive compensation for the market value of the things ordered destroyed (i.e. the replacement cost) even if those things are not included on the list.

Proposed amendment for updated list of duck species

The CDAR includes a Schedule, which lists the maximum amounts by species and by production type (meat production duck, egg production duck, parent breeder duck, etc.). Currently, the CDAR only includes maximum amounts for one duck species — the Cairina moschata, also known as Muscovy ducks.

During by the recent HPAI outbreak, other commercial duck species were affected. The majority of commercial duck species ordered destroyed were Anas Platyrhynchos domesticus (i.e. Pekin ducks) and hybrid Cairina moschata x Anas Platyrhynchos (i.e. Mulard ducks). Since Anas Platyrhynchos domesticus and hybrid ducks are not named in the list of duck species in the CDAR, they are captured under a different category, specifically the water-bird family Anatidae (item 61, with a maximum amount of $500 per bird). This creates an inconsistency in the compensation of commercial duck species as different maximum amounts apply depending on the duck species.

The CFIA had initially proposed an amendment that would have updated the list of duck species in the Schedule of maximum amounts in the CDAR to include all common commercial duck species (i.e. Pekin, Mulard and Muscovy) under the same maximum amounts. While this would have ensured consistency in the application of the maximum amounts to all commercial duck species in Canada, owners of Pekin breeder ducks and Mulard ducks would have been eligible for a reduced amount of compensation.

Stakeholder reaction

The duck industry expressed strong opposition to the proposed amendment. They raised significant concerns — namely that the existing maximums for ducks in the CDAR Schedule were too low for the other commercial duck species (i.e. Pekin and Mulard), and that this could have significant negative impacts on the duck industry.

CFIA Response

Taking into consideration the significant concerns raised by some stakeholders, the CFIA determined that further analysis on the maximum amounts for ducks is needed. As such, the CFIA will not proceed with the proposed amendment related to duck species at this time.

Consultation for maximum amounts for bison

The Canadian Bison Association (CBA) represents the interests of the bison industry in Canada and has approximately 550 members in Canada, as well as some in the United States. Within the CBA, there are six provincial associations spanning from British Columbia to Quebec.

The CFIA and the CBA have had several discussions regarding the maximum amounts for bison starting from 2017. Based on these discussions, and the CFIA’s own economic analysis, it was determined that the existing maximum amounts did not reflect the latest market value for bison.

To determine the updated maximum amounts, the CBA provided data from bison auctions to inform the analysis of maximum amounts for bison. The CFIA met with the CBA to present its methodology, analysis, and recommended maximum amounts. Overall, the CBA reacted positively to the data used and the robustness of the CFIA’s analysis supporting the recommended maximum amounts. The CFIA also reviewed its approach to account for future inflation.

The proposed regulatory amendments were prepublished in the Canada Gazette, Part I, on July 10, 2021. The 75-day public consultation period ended on September 23, 2021. No comments were received during this consultation period.

Modern treaty obligations and Indigenous engagement and consultation

The Initial Assessment of Modern Treaty Implications (AMTI) examined the geographical scope and subject matter of the initiative in relation to Indigenous Modern Treaties and Self-Government (MTSG) in effect, and did not identify any potential Modern Treaty or Self-Government impacts. As pursuant to the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, and in accordance with Canada’s Collaborative Modern Treaty Implementation Policy, no implications were identified and, therefore, a detailed assessment is not required.

These regulatory amendments to the CDAR are needed to address issues that cause inconsistencies in the compensation paid to owners for animals or things ordered destroyed in an animal disease outbreak situation. Specifically, the amendments will increase compensation eligibility for owners related to personal labour, disposal costs for certain things ordered destroyed and maximum amounts for bison. The CDAR is applicable equally to Indigenous animal owners, should they have animals or things ordered destroyed by the CFIA related to disease control. In the future, as the CFIA considers further amendments, or identifies potential impacts to Indigenous Peoples, including MTSG partners through the implementation of activities related to this regulation, the CFIA will revisit this assessment and seek to undertake activities in an inclusive and respectful manner.

The CFIA also recognizes that Indigenous Peoples have a special spiritual relationship with bison and have traditionally made use of bison products other than just meat, for traditional food, social, or ceremonial purposes. In recognition of Indigenous Peoples as rights holders, and in the spirit of reconciliation, the CFIA will collaborate with Indigenous Peoples to assess and determine the value of bison that are ordered destroyed, up to the new maximum amounts set out in the regulations.

Instrument choice

The CFIA did consider whether to advance regulatory amendments. Under the status quo (i.e. no regulatory amendments), the issues with the CDAR that emerged during the HPAI outbreak would continue. It would also not address stakeholder concerns, namely the lack of eligibility for owners’ personal labour and for disposal costs associated with feed (a type of thing) ordered to be destroyed. This could result in delays or negative impacts on animal disease eradication and control efforts.

The regulatory approach was chosen as it will respond to the identified issues, stakeholder requests, and enhance consistency in the compensation process. In the event of a disease outbreak, a consistent compensation regime will support the early reporting of diseases and the cooperation of animal owners.

Regulatory analysis

Benefits and costs

Baseline scenario

In the baseline or status quo scenario, the CDAR continues and there are no regulatory changes.

Eligible labour expenses

Under the CDAR, animal owners are only eligible to receive compensation for labour expenses for carrying out destruction and disposal activities when they use hired labour (i.e. when owners pay an employee) or when commercial services are employed. Thus, unincorporated owners (i.e. sole proprietor who owns the animals; often a family business or owner-operated business) would not be eligible for compensation for their own labour expended while carrying out destruction orders. Under the baseline scenario, owners would only be able to use commercial services or, in some cases, pay their employees to complete destruction orders. Depending on the disease outbreak, this is expected to create a high demand for commercial service providers to carry out destruction orders, which in turn may increase the wait time and price of commercial services. This would likely negatively impact the overall disease management efforts and increase economic losses for the owners.

Compensation for disposal costs of things

Under the CDAR, there is no regulatory authority to provide compensation for costs associated with the disposal of things ordered destroyed. Owners of farmed animals would not be eligible for compensation for the disposal cost of things ordered destroyed and would continue to absorb these costs. Owners would, however, remain eligible to receive compensation for the value of the things ordered destroyed, just not the associated disposal costs.

Maximum amounts for bison

The maximum amounts listed for bison in the CDAR Schedule were: $4,000 for Bison (Bison bison) bull, 1 year and older; and $2,500 for a Bison (Bison bison) other than those referred to in item 9. Under the baseline scenario, the maximum amounts listed in the CDAR would not change. As these maximum amounts were significantly lower than current market values for bison, this may result in owners being unwilling to destroy their animal and/or under-report animal disease that impact bison.

Regulatory scenario

Eligible labour expenses

In the regulatory scenario, owners will have the flexibility of using their own personal labour to carry out destruction. This will likely benefit mainly unincorporated owners, who are often a family business or owner-operated business. Under this scenario, these owners are more likely to complete destruction orders themselves, particularly if they are best placed to complete the destruction orders quickly and safely. However, this would also depend upon several factors, such as the severity of the outbreak, the difference in cost between using a commercial service or hired labour, and the willingness of the unincorporated owners to use their personal labour for the destruction orders.

In 2021, there were 76 796 animal producers/owners in Canada. Of them, 59 170 were unincorporated, representing 77% of the total.^{footnote 3} Most unincorporated entities are small producers with low annual revenues (about 60% with annual revenue up to $49,000). The recent HPAI outbreak affected 417 poultry owners, of which 144 were unincorporated, representing 35% of the total affected.

Compensation for owners’ personal labour will be based on the number of hours of labour used to complete the destruction order and the average hourly wage for a local agricultural worker. This will be defined in operational guidance and reference the average hourly wage rate for the agricultural industry in the owner’s province or territory, as reported by Statistics Canada (e.g. ranges from $21.10 in Quebec to $27.10 in Saskatchewan in 2023).^{footnote 4}

Given that hourly rates for commercial service providers range from $50 to $200 per hour, an increase in owners seeking compensation for personal labour (instead of using commercial services) will result in a decrease in overall compensation from the CRF. The amount of decrease would depend on the number of owners undertaking the destruction and disposal activities themselves and the difference in cost for commercial services and compensation for the owner’s personal labour. Therefore, the exact estimation of the fiscal impact of the amendment related to owners’ personal labour is not possible. The table below illustrates the potential cost reduction from labour costs expended in the baseline and regulatory scenarios, assuming 15 hours, on average, would be required for an owner to complete the destruction order themselves. Under this illustrative scenario, the cost reduction caused by the regulatory changes would range from $345 to $2,595 for an owner.

Table 1: Labour costs in baseline and regulatory scenarios (illustration purposes only)

	Baseline scenario (commercial service)	Regulatory scenario (owner’s personal labour)
Wage ($/hr)	$50 to $200	$27
Total time required (hr)	15
Total cost = wage * total time required	$750 to $3,000	$405
Cost reduction in regulatory scenario	$345 to $2,595

Note: wage for commercial service range from $50 to $200; wage for personal labour $27

Furthermore, this regulatory change is expected to provide owners with the flexibility to use their personal labour to carry out destruction orders, possibly reducing the time required to complete them. This may help them respond more effectively to an animal disease outbreak.

Compensation for disposal costs of things

In the regulatory scenario, owners will be eligible to receive compensation for the reasonable costs associated with the disposal of a specific list of things ordered destroyed. This list includes the reasonable disposal costs for animal food (such as feed), non-commercial freezers and refrigerators, cages, crates and nesting boxes, and feed troughs, up to a maximum amount equal to what a commercial service would typically charge.

There would be no incremental costs to owners as the amendment would provide increased eligibility for potentially claiming costs of disposal of certain things ordered destroyed. The compensation amount paid from the CRF is expected to increase; however, the specific amount would be determined by the severity of the disease outbreak and the things ordered to be destroyed.

Updated maximum amounts for bison

The maximum amounts listed for bison in the CDAR will be updated to $10,000 for Bison (Bison bison) bull, 1 year and older and $6,000 for Bison (Bison bison) for all other bison. It is important to note that the maximum amount outlined in the CDAR Schedule does not define what an actual owner will receive. Rather it is the maximum amount or “up to amount” that an owner may be eligible for. By increasing the maximum amount for bison, it is expected that bison owners will be eligible to receive a higher compensation amount in the event of an animal disease outbreak affecting bison. However, the specific amount cannot be determined at this time, as it would depend on the nature of the outbreak and the number of animals ordered destroyed. There has not been a disease outbreak resulting in bison being ordered destroyed in the past ten years.

The higher maximum amounts are expected to increase early disease reporting in the event of an outbreak, thereby enabling corrective actions to control and limit the spread of disease and reduce negative economic impacts on the bison sector.

Table 2: Summary of the baseline and regulatory scenarios

Element of the proposal	Baseline scenario	Regulatory scenario
Eligible labour expenses (owners’ personal labour)	Unincorporated animal owners (i.e. sole proprietor who owns the animals) cannot be compensated for their own labour expended in carrying out destruction orders. Commercial service providers complete all or most destruction orders for unincorporated owners. Expected higher total compensation costs depending on the nature of the outbreak and slower response times to carry out destruction activities. Owners continue to be eligible for the cost of hired workers (e.g. their employees) and commercial services expended in carrying out destruction orders.	Animal owners will be eligible for compensation for their personal labour expended in carrying out destruction orders. The amount will be based on the average local wage for agricultural workers. More unincorporated owners are likely to carry out the destruction orders themselves rather than hire commercial service providers. Expected reduced compensation costs and reduced response times to carry out the destruction orders during animal disease outbreaks, proportional to the number of unincorporated owners who choose to complete destruction orders themselves.
Compensation for disposal costs of things	Owners are eligible for compensation for the value of a thing ordered destroyed. Owners are not eligible to receive compensation for the disposal cost of things ordered destroyed.	Owners are eligible for compensation for the value of a thing ordered destroyed. Owners will now be eligible to receive compensation for the costs of disposal for certain things ordered destroyed. Specifically, the following list of things ordered destroyed (animal food, non-commercial freezers and refrigerators, cages, crates and nesting boxes, and feed troughs) will be eligible for compensation, up to the amount a commercial service would typically charge.
Updated maximum amounts for bison	$4,000 maximum amount applied to Bison (Bison bison) bull, 1 year and older. $2,500 maximum amount applied to Bison (Bison bison) all other bison.	$10,000 maximum amount applied to Bison (Bison bison) bull, 1 year and older. $6,000 maximum amount applied to Bison (Bison bison) all other bison.

Benefits

Overall benefits

The amendments are intended to increase consistency in the compensation approach. A consistent compensation regime for animals and things ordered destroyed supports early reporting of animal diseases and owner cooperation in disease control efforts, which is essential for prompt intervention. Prompt intervention minimizes the spread of disease and the magnitude of the impact on human and animal health. This, in turn, protects the economic viability of Canada’s farmed animal sector.

Benefits to industry

Owners of animals and things that have been ordered destroyed directly benefit from being eligible to receive compensation during animal disease outbreaks. The amendments for eligible labour expenses and disposal costs of things ordered destroyed will increase what is eligible for compensation, thereby promoting compliance with related destruction orders.

Owners will benefit from being able to receive compensation for their personal labour expended to complete destruction orders. The option to receive compensation for completing destruction orders themselves provides owners with more flexibility when responding to disease outbreaks.

Owners will benefit from being eligible to receive compensation for the disposal costs of certain things ordered destroyed. The disposal costs of things ordered destroyed can be significant at the farm-level, depending on the scale and scope of an outbreak.

Bison owners will benefit from the updated maximum amounts, as they better reflect the current market values of bison.

Benefits to government

Compensation Payments from the Consolidated Revenue Fund

Under the HAA, the CFIA may order the destruction of animals or things affected by a disease. The compensation is paid directly from the CRF to the affected animal owner, and the CFIA does not get any benefit from the compensation. The amendment to enable animal owners to be compensated for their personal labour expended in destruction or disposal activities is expected to increase the number of owners who choose to undertake these activities themselves, rather than hire a commercial service or use hired employees. The amount of compensation for an owner’s personal labour will be based on the amount a local agricultural worker would be paid, which is usually lower than what commercial services charge. Therefore, there is an expected reduction in the amount of compensation paid for destruction and disposal activities in future animal disease outbreaks. The fiscal impacts from the regulatory change related to owners’ personal labour will depend upon several factors, including the severity of future outbreaks and the number of owners willing to carry out the order by themselves.

Costs

Costs to industry

There will be no incremental cost to the industry (i.e. farmed animal sector owners of animals or things) arising from the regulatory amendments.

Costs to the Government

Implementation

The CFIA will incur minimal implementation costs to update compensation guidance documents, including interpretive guidance for regulated parties and operational guidance for CFIA inspectors. The amendments associated with eligible labour expenses and updated maximum amounts for bison are not expected to result in a change in the number or type compensation claims. The amendment related to disposal costs of things will result in additional claims requiring processing and payment. Given that claims for the disposal costs of things will generally be submitted and processed at the same time as the claim for compensation for the thing itself, the increase in CFIA resources required to process the claims will be minor. These costs will be absorbed with existing resources.

Compensation Payments from the CRF

The amendments related to the disposal costs of things ordered destroyed and the maximum amounts for bison may increase the relative amount of compensation paid to owners from the CRF in the event of an animal disease outbreak.

The Government will incur the costs associated with compensating owners for the disposal costs associated with certain things ordered destroyed. While the disposal costs associated with certain things ordered destroyed can be significant at the farm-level, they only represent a small percentage of the costs and compensation associated with destruction orders. For example, using the 2022–2024 HPAI outbreak as a case study, compensating for the disposal cost of feed ordered destroyed in the worst-case scenario (i.e. if the largest possible amount of feed was ordered destroyed across Canada for the number of birds ordered destroyed) during this same period would result in a 2% to 5% increase in the total compensation paid ($232.6 million as of October 2024). Specifically, under this case study, it is estimated that the total cost to dispose 18 000 tons of feed at a landfill would range between $4.2M and $12.6M ($3K to $9K per dump truck x 1400 dump trucks). Feed is expected to represent the majority of things eligible for compensation of disposal costs that would be ordered destroyed. Increased costs associated with compensation for freezers, refrigerators, cages, crates, nesting boxes, and feed troughs are anticipated to be minimal relative to the projected costs associated with the disposal of animal food (such as feed) ordered destroyed.

The Government will also incur the increased costs associated with compensating bison owners up to the updated maximum amounts for bison (an increase of $6,000 per bison bull 1 year and older, and an increase of $3,500 per bison for all other bison, if compensated at the maximum amount). If an outbreak affecting bison occurs in the future similar to the 2006 Anthrax outbreak (264 susceptible bison), this amendment would result in a $1.5 million increase in compensation payments relative to the baseline, if all bison were compensated at the maximum amount for bison bull 1 year and older.

Small business lens

The regulatory amendments, by increasing what is eligible for compensation, are expected to benefit all owners that have animals or things ordered destroyed. However, unincorporated owners (who are, by nature, generally small) are expected to particularly benefit from the regulatory change related to owners’ personal labour.

In 2021, there were 76 796 animal producers/owners in Canada. Of them, 59 170 (77%) were unincorporated. Unincorporated farm businesses will now be eligible to receive compensation for their own personal labour expended to carry out destruction orders. Previously, they could only use commercial services or hire employees to carry out destruction or disposal activities. This change will provide increased flexibility for unincorporated owners, who are small-size animal farmers. They can now choose to conduct destruction and disposal activities themselves, which may facilitate a quick and efficient response to disease.

Analysis under the small business lens concluded that the amendments would benefit small businesses. The amendment to enable compensation for owners’ personal labour is expected to benefit small businesses. The changes in compensation eligibility resulting from the amendments for bison (i.e. increased maximum amount or “up to” limit) and compensation for disposal costs of things would also benefit small businesses that are impacted.

One-for-one rule

The one-for-one rule does not apply. Receiving compensation is an optional benefit for businesses; therefore, the amendments do not introduce mandatory regulatory requirements. Owners can choose not to apply for compensation and, therefore, would not be required to submit records or incur any additional administrative burden. No regulatory titles are repealed or introduced.

Regulatory cooperation and alignment

There are no regulatory cooperation and alignment considerations for the amendments. As compensation is only available for Canadian owners of animals or things ordered destroyed, there will be no direct impact on international partners.

Effects on the environment

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

Gender-based analysis plus (GBA+) impacts have been identified for the amendments.

The regulatory amendments will directly impact owners of animals or things ordered destroyed by the CFIA (e.g. farmers and producers) during animal disease outbreaks, unincorporated farmers in rural areas in particular. Most farm operators are male and 55 years old or over. Nine in ten animal farms are located in Ontario, Alberta, Quebec, Saskatchewan and British Columbia.^{footnote 5}

The CFIA has also identified potential indirect benefits for the farm and rural populations in Canada, and the Canadian population at large. As the amendments aim to address inconsistencies and promote early reporting of animal disease, they will ultimately help minimize the spread of disease and impacts on human and animal health, which will support the economic viability of Canada’s animal sector. Certain groups are not likely to indirectly benefit more than other groups.

Implementation, compliance and enforcement, and service standards

These amendments come into force on the day on which they are registered.

To support implementation of the amendments, the CFIA will provide inspectors with updated inspection guidance. The CFIA’s compensation webpage (Animal health compensation – what to expect when an animal is ordered destroyed), which provides stakeholders with information on the compensation regime, will also be updated.

In general, when a CFIA district veterinarian determines that a disease is present or suspected on a farm, the veterinarian may issue an “order for destruction (CFIA/ACIA 4202)”. When destruction of an animal or thing is ordered by the CFIA, the CFIA district veterinarian will provide an overview of the compensation process and how market value with be determined. To receive the compensation the affected owner must submit evidence of the animal or thing’s value, along with a completed compensation application.

All compensation paid under the Regulations is recommended by a veterinary inspector designated under the HAA. A mechanism for appeal of compensation awards exists under the HAA. A judge of the Federal Court acts as the assessor for appeals.

The overall timeline to receive compensation is approximately six to eight weeks from receipt of a complete application. This timeline could vary depending on the quality, relevancy and complexity of the documentation provided by the owner, and volume of compensation claims.

The evaluation process is complex. In order to minimize financial hardship and improve the wellbeing of owners, CFIA compensation evaluators may offer advance compensation payments during initial meetings with owners, while the owner is still working on disease response.

Contact

Regulatory, Legislative and Economic Affairs Division
Canadian Food Inspection Agency
1400 Merivale Road Ottawa, Ontario
K1A 0Y9
Email: cfia.legislation-legislation.acia@canada.ca