Thoroughbred owenrs and breeders are increasingly moving their animals from Canada to the United States to capitalize on superior tax incentives.. This shift is leaving stables at Toronto's historic Woodbine Racetrack increasingly vacant as the industry warns of a permanent decline.
The C$17,500 ceiling vs. the American 100% deduction
The disparity between Canadian and American tax laws has created a financial "magnet" pulling capital across the border. As reported by CTV News, a provision in the US "One Big Beautiful Bill" allows American buyers to deduct the entire purchase price of a racehorse. In stark contrast, Section 31 of Canada’s Income Tax Act limits write-offs for horse owners to just C$17,500.
Ontario breeder Glenn Sikura highlighted this inequality, noting that a US buyer puchasing a C$300,000 broodmare can write off the full amount, while a Canadian buyer is stuck with a fraction of that value. This financial reality is forcing breeders like Sikura to sell their animals in Kentucky to avoid unsustainable losses at home.
Woodbine’s decline from 1,900 horses
The physical impact of this tax migration is visible at Toronto's Woodbine Racetrack, where the number of resident horses has plummeted. Just three years ago, the facility housed approximately 1,900 horses, but that number has since dropped to 1,600 as breeders and buyers gallop south.
Mark Halloran, managing director of the Canuck Racing Club, described the US tax environment as a massive force pulling investment away from Canadian soil. The exodus is not just about the animals; it is about the capital that follows them , leaving Canadian racing infrastructure underutilized and threatening the long-term viability of the sport in Ontario .
The threat to Josie Carroll’s 41 employees
The migration of thoroughbreds creates a direct domino effect on the Canadian labor market and the broader agricultural sector. Trainer Josie Carroll, who manages 65 horses, noted that she employs 41 people to maintain her operation, including grooms and riders.
According to the report, every horse that leaves the country represents a lost livelihood for veterinarians, feed suppliers, and stable hands. This creates what breeders call a "vicious downward cycle," where fewer horses lead to fewer quality foals, which in turn leads to even less investment in the Canadian industry.
The Finance Ministry's silence on Section 31 reform
Despite urgent calls for reform from industry leaders like Woodbine Racetrack executive vice-president Bill Ford,the Canadian government has remained non-committal. ford has argued that updating Section 31 is a "low-hanging fruit" opportunity to protect Canadian workers and stop the flow of horses to the US .
When asked for a response, the federal ministry of finance stated it would be "inappropriate to speculate" on potential changes to the tax code, despite acknowledging the industry's economic importance. this leaves a critical question: will the government prioritize the survival of a historic domestic industry , or will they allow the tax gap to finalize the exodus?
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