In humans, meat products contaminated with BSE has been linked to more than 150 deaths, mostly in Britain, from variant Creutzfeldt-Jakob Disease, a rare and fatal nerve disease.
The 6-year-old cow was identified on a Fraser Valley farm through the national BSE surveillance program. It is fifth case in Canada since May 2003, when the U.S. border was closed to Canadian beef after the sick cows were detected in Canada.
In a written statement, the inspection agency said the case would have no bearing on the safety of Canadian beef, because no part of the animal entered the human food or animal feed systems.
Inspectors have tested roughly 100,000 animals since Canada's first case was detected in Alberta and have said they expect to find isolated cases of the disease.
It is second animal born after a 1997 ban on cattle feed to test positive for mad cow.
A cow from an Alberta farm tested positive for the disease in January.
The cow's age raises questions about the effectiveness of the ban, because the disease is believed to spread only when cattle eat feed containing certain tissues from infected cattle. Cattle protein was commonly added to cattle feed to speed growth until Canada — and the United States — banned the practice in 1997.
It could indicate a lack of compliance with the ban by Canadian feed plants or farmers.
Trade in cows younger than 30 months, as well as meat, resumed last July with the United States. The younger animals are believed to be at lower risk for the disease.
Canada has invited the United States to participate in the epidemiological investigation of the latest case and the U.S. Agriculture Department planned to send an animal health expert to Canada on Monday.
U.S. Agriculture Secretary Mike Johanns said he did not anticipate a change in status in trade between the countries.
"It is important to note that Canada's monitoring system identified this animal as one that should be removed from the food and feed supply chain, ensuring food safety continues to be protected," Johanns said in a statement.
The Canadian Cattlemen's Association, which represents some 90,000 beef producers, estimated they lost more than $5.7 billion during the two-year ban.