Local producers may see minimal benefit from ag tax credit
The province is eagerly promoting a tax credit for Alberta’s agricultural processing industry, but food producers in Pincher Creek and neighbouring MD will likely see marginal benefits, according to local government officials.
The initiative will spur the industry through a 12 per cent non-refundable tax credit on corporate investments in Alberta processing plants of $10 million or more, Agriculture Minister Nate Horner said at a press conference Feb. 8.
“At a higher level, this means that we’re not putting raw commodities in train cars and then shipping it away,” Horner said, taking aim at Alberta’s “competitor states” in Idaho, Colorado and Texas.
Alberta farmers had the highest operating revenue in Canada in 2020, with processed exports hitting $6.4 billion the year before, according to Statistics Canada and the Government of Alberta. Raw exports, known as primary commodities, slumped by nearly 10 per cent in 2019, amounting to $5.3 for the year.
Agribusiness in the MD is driven by ranching and grain cropping for animal feed and seed oil, all of which are primary exports, Reeve Rick Lemire told Shootin’ the Breeze.
“I’m not sure how (the tax credit) would benefit us,” Lemire said, noting that any bump to regional agri-processing could indirectly boost local production.
Marie Everts, economic development officer at the Town of Pincher Creek, said on Feb. 10 that local food producers may not have the capital to invest $10 million in their farms or ranches.
“There are obviously going to be places that will see more of a benefit,” Horner granted. The minister qualified that southwest Alberta ranchers can expect higher demand from the region’s beef processing hub in High River.
Horner anticipates an immediate eight per cent return on investment to Alberta taxpayers on the one hand, and a healthy boost to provincial food security on the other.
Multimillion-dollar food processing plants can stay in business for between 40 and 50 years, he explained.
Beef dominated Alberta’s agricultural exports in 2019 in terms of value, climbing 18 per cent year over year to hit $2.4 billion, the GOA reported in 2020. Ranchers, meanwhile, shouldered the province’s biggest share of agricultural operating expenses, shelling out $8.1 billion, or roughly 42 per cent of total farm expenses, according to Stats Can.
Wheat was Alberta’s second-highest agricultural export in 2019, followed by canola seed, crude canola oil and live cattle. Annual wheat exports fell by 13 per cent in value and 10.5 per cent in quantity, according to the provincial government.
