The damage Canada’s restrictive and unfair tax laws are causing to Ontario’s horse racing industry was the subject of a recent CTV National News story by Adrian Ghobrial.
The story can be read here.
It also can be viewed here:
CTV National News story
As Ontario Racing has previously reported here, and further expanded on for a detailed story in Canadian Thoroughbred magazine, the Canadian horse racing industry is at a distinct disadvantage compared to its U.S. counterparts when it comes to tax laws.
As Ghobrial’s CTV piece said, “The tax benefit now offered in the U.S. means that Canadian-bred horses sold in the U.S. sell for thousands of dollars more than they do in Canada.
“When a horse is sold in the United States, it often doesn’t make its way back up to Canada. If it doesn’t race in Canada, it can’t help the broader Canadian economy.”
On the Thoroughbred side, “Three years ago, Woodbine Racetrack was home to roughly 1,900 horses. That number is now 1,600 and dropping fast.”
In the U.S. President Donald Trump’s “Big Beautiful Bill,” which was signed into law in the summer of 2025, allows horse owners to write off 100 per cent of bonus appreciation for horse losses. That change is credited with sending the price of Thoroughbreds skyrocketing at U.S. sales in 2025, and the trend has continued in 2026. We’ll spare you the accounting details, but if you want to read more about them, you can do so at Fairness for Farmers, the National Thoroughbred Racing Association and Harness Racing Update.
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 $17,500 of losses annually in the horse racing business against their main business.
Thoroughbred owner and breeder David Clancy of Track West Racing of Toronto is an accountant. He told Ontario Racing in 2025, “Section 31 is terrible for Canada’s horse [industry]. Basically, you can deduct up to $17,500 but you have to spend $32,500 to get the $17,500 deduction.
“Section 31 basically says you’re limited if farming is not your main pursuit, which, for most guys in the horse racing industry, farming is not their main pursuit. It’s a total joke.”
Sue Leslie, an Ontario Racing board member and the Ontario president of the Horsemen’s Benevolent and Protective Association (HBPA) summed it up well in an interview with Ontario Racing in late 2025:
“It sure seems like the U.S. government is trying to help and promote the horse racing and breeding industry there and it doesn’t seem like the Canadian government is too interested,” Leslie said. “It’s a huge, huge issue for Ontario and Canadian horsepeople, because we can’t compete… The cost of owning a horse is through the roof and the tax laws are so antiquated. It’s ridiculous, really.”
Bill Manes has owned Standardbred racehorses for more than 50 years. In 2025, he said if Canadian tax rules, “had no cap on what you could write off, my own personal feeling is you would have a lot more people in the game.
“There’s no attraction [to horse ownership] the way the tax structure is now.
“You can't even buy a yearling nowadays for $17,500. There's no incentive for people to reinvest in an industry.”
Simply put, Section 31 discriminates against rural Canada. There is no such limitation faced by other economic sectors.
The horse racing industry isn’t seeking an exception or tax breaks. It simply wants Section 31 repealed in the name of fairness, and to achieve both a level playing field with other Canadian businesses and a competitive balance with its U.S. counterparts.
CUTLINE:
Claus Andersen
A bid spotter tries to coax another bid last week at the London Classic Yearling Sale in London, ON.
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