Alberta
Alberta awash in corporate welfare
![](https://www.todayville.com/edmonton/wp-content/uploads/sites/2/2024/07/tvrd-fi-corporate-welfare-image-2024-07-26.jpg)
From the Fraser Institute
By Matthew Lau
To understand Ottawa’s negative impact on Alberta’s economy and living standards, juxtapose two recent pieces of data.
First, in July the Trudeau government made three separate “economic development” spending announcements in Alberta, totalling more than $80 million and affecting 37 different projects related to the “green economy,” clean technology and agriculture. And second, as noted in a new essay by Fraser Institute senior fellow Kenneth Green, inflation-adjusted business investment (excluding residential structures) in Canada’s extraction sector (mining, quarrying, oil and gas) fell 51.2 per cent from 2014 to 2022.
The productivity gains that raise living standards and improve economic conditions rely on business investment. But business investment in Canada has declined over the past decade and total economic growth per person (inflation-adjusted) from Q3-2015 through to Q1-2024 has been less than 1 per cent versus robust growth of nearly 16 per cent in the United States over the same period.
For Canada’s extraction sector, as Green documents, federal policies—new fuel regulations, extended review processes on major infrastructure projects, an effective ban on oil shipments on British Columbia’s northern coast, a hard greenhouse gas emissions cap targeting oil and gas, and other regulatory initiatives—are largely to blame for the massive decline in investment.
Meanwhile, as Ottawa impedes private investment, its latest bundle of economic development announcements underscores its strategy to have government take the lead in allocating economic resources, whether for infrastructure and public institutions or for corporate welfare to private companies.
Consider these federally-subsidized projects.
A gas cloud imaging company received $4.1 million from taxpayers to expand marketing, operations and product development. The Battery Metals Association of Canada received $850,000 to “support growth of the battery metals sector in Western Canada by enhancing collaboration and education stakeholders.” A food manufacturer in Lethbridge received $5.2 million to increase production of plant-based protein products. Ermineskin Cree Nation received nearly $400,000 for a feasibility study for a new solar farm. The Town of Coronation received almost $900,000 to renovate and retrofit two buildings into a business incubator. The Petroleum Technology Alliance Canada received $400,000 for marketing and other support to help boost clean technology product exports. And so on.
When the Trudeau government announced all this corporate welfare and spending, it naturally claimed it create economic growth and good jobs. But corporate welfare doesn’t create growth and good jobs, it only directs resources (including labour) to subsidized sectors and businesses and away from sectors and businesses that must be more heavily taxed to support the subsidies. The effect of government initiatives that reduce private investment and replace it with government spending is a net economic loss.
As 20th-century business and economics journalist Henry Hazlitt put it, the case for government directing investment (instead of the private sector) relies on politicians and bureaucrats—who did not earn the money and to whom the money does not belong—investing that money wisely and with almost perfect foresight. Of course, that’s preposterous.
Alas, this replacement of private-sector investment with public spending is happening not only in Alberta but across Canada today due to the Trudeau government’s fiscal policies. Lower productivity and lower living standards, the data show, are the unhappy results.
Author:
Agriculture
P&H Group building $241-million flour milling facility in Red Deer County.
![](https://www.todayville.com/edmonton/wp-content/uploads/sites/2/2024/09/tvrd-rd-county-p-h-mill-image-2024-09-06.jpg)
P&H Milling Group has qualified for the Agri-Processing Investment Tax Credit program
Alberta’s food processing sector is the second-largest manufacturing industry in the province and the flour milling industry plays an important role within the sector, generating millions in annual economic impact and creating thousands of jobs. As Canada’s population continues to increase, demand for high-quality wheat flour products is expected to rise. With Alberta farmers growing about one-third of Canada’s wheat crops, the province is well-positioned to help meet this demand.
Alberta’s Agri-Processing Investment Tax Credit program is supporting this growing sector by helping to attract a new wheat flour milling business to Red Deer County. P&H Milling Group, a division of Parrish & Heimbecker, Limited, is constructing a $241-million facility in the hamlet of Springbrook to mill about 750 metric tonnes of wheat from western Canadian farmers into flour, every single day. The new facility will complement the company’s wheat and durum milling operation in Lethbridge.
“P&H Milling Group’s new flour mill project is proof our Agri-Processing Investment Tax Credit program is doing its job to attract large-scale investments in value-added agricultural manufacturing. With incentives like the ag tax credit, we’re providing the right conditions for processors to invest in Alberta, expand their business and help stimulate our economy.”
P&H Milling Group’s project is expected to create about 27 permanent and 200 temporary jobs. Byproducts from the milling process will be sold to the livestock feed industry across Canada to create products for cattle, poultry, swine, bison, goats and fish. The new facility will also have capacity to add two more flour mills as demand for product increases in the future.
“This new facility not only strengthens our position in the Canadian milling industry, but also boostsAlberta’s baking industry by supplying high-quality flour to a diverse range of customers. We are proud to contribute to the local economy and support the agricultural community by sourcing 230,000 metric tonnes of locally grown wheat each year.”
To be considered for the tax credit program, corporations must invest at least $10 million in a project to build or expand a value-added agri-processing facility in Alberta. The program offers a 12 per cent non-refundable tax credit based on eligible capital expenditures. Through this program, Alberta’s government has granted P&H Milling Group conditional approval for a tax credit estimated at $27.3 million.
“We are grateful P&H Milling Group chose to build here in Red Deer County. This partnership willbolster our local economy and showcase our prime centralized location in Alberta, an advantage that facilitates efficient operations and distribution.”
Quick facts
- In 2023, Alberta’s food processing sector generated $24.3 billion in sales, making it the province’s second-largest manufacturing industry, behind petroleum and coal.
- That same year, just over three million metric tonnes of milled wheat and more than 2.3 million metric tonnes of wheat flour was manufactured in Canada.
- Alberta’s milled wheat and meslin flour exports increased from $8.6 million in 2019 to $19.8 million in 2023, a 130.2 per cent increase.
- Demand for flour products rose in Alberta from 2019 to 2022, with retail sales increasing by 24 per cent during that period.
- Alberta’s flour milling industry generated about $840.7 million in economic impact and created more than 2,200 jobs on average between 2018 and 2021.
- Alberta farmers produced 9.3 million metric tonnes of wheat in 2023, representing 29.2 per cent of total Canadian production.
Related information
Addictions
B.C. addiction centre should not accept drug industry funds
![](https://www.todayville.com/edmonton/wp-content/uploads/sites/2/2024/09/tvrd-btn-bc-centre-on-substance-abuse-image-2024-09-06.jpg)
The British Columbia Centre on Substance Abuse. (Photo credit: Alexandra Keeler)
News release from Break The Needle
By Canadian Affairs Editorial Board
Data released this week brought the welcome news that opioid-related deaths in Alberta have decreased substantially since last year. Opioid-related deaths have also decreased in B.C., although not as dramatically as in Alberta.
While the results are encouraging, more work needs to be done. And both provinces, which have taken very different approaches to the drug crisis, need to understand how their drug policies contribute to these results.
Fortunately, B.C. and Alberta both have research centres devoted to answering this very question. But we are disheartened to see that B.C.’s centre, the British Columbia Centre on Substance Abuse, accepts funding from pharmaceutical and drug companies.
As Canadian Affairs reported this week, the B.C. centre’s funding page lists pharmaceutical company Indivior, pharmacy chain Shoppers Drug Mart and cannabis companies Tilray and Canopy Growth as “past and current funders of activities at BCCSU — including work related to research, community engagement, and clinical training and education.”
This funding structure raises major red flags. Pharmaceutical and drug companies benefit from continued drug use and addiction. And in a context where B.C. has favoured harm-reduction policies such as safe consumption sites and safe supply, the risk of conflicts is especially high.
Indivior is the producer and manufacturer of Suboxone, a drug commonly prescribed to treat opioid-use disorder. Canada’s drug crisis has driven a surge in demand for prescription opioids to treat opioid-use order, with the number of Canadians receiving Suboxone and similar drugs up 44 per cent in 2020 from 2015, according to the Canadian Centre on Substance Use and Addiction.
Indivior is also the subject of at least two class-action lawsuits claiming the company failed to disclose adverse health effects associated with using Suboxone.
In 2021, Shoppers Drug Mart made a $2-million gift to the University of British Columbia to establish a pharmacy fellowship and support the education of pharmacist-focused addiction treatment at the British Columbia Centre on Substance Use. A conflict of interest exists here as well, with pharmacies benefiting financially from continued demand for drugs.
Consider, for example, if B.C.’s centre produced research showing pharmaceutical interventions were not effective or less effective than other policy measures. Would researchers feel pressure to not publish those results or pursue further lines of inquiry? Similarly, would Indivior or Shoppers Drug Mart continue to provide funding if the centre published research in this vein?
These are not the kinds of questions researchers should have to consider when pursuing research in the public interest.
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In response to questions about whether accepting drug industry funding could compromise the objectivity of their research, the British Columbia Centre on Substance Abuse referred Canadian Affairs to their website’s funding page. This page states their research is supported by peer-reviewed grants and independent ethical reviews to ensure objectivity.
We would argue such steps are not sufficient, not least because conflicts of interest are a problem whether they are real or perceived. Even if researchers at the centre are not influenced by who is funding their work, the public could reasonably perceive the objectivity of their research to be compromised.
It is for this reason that ethics laws generally require officeholders to avoid both actual conflicts of interest as well as the appearance of conflicts.
It is also why the government of Alberta, in launching their new addictions research centre, the Canadian Centre of Recovery Excellence (CoRE), has taken steps to safeguard the integrity of its work. The government has imposed legislative safeguards to ensure CoRE cannot receive external funding that could be seen to compromise its research, a spokesperson for the centre told Canadian Affairs.
It would be difficult to overstate the importance of the work done by the B.C. centre, CoRE and other centres like it. It is imperative that governments of all levels and stripes have quality, trusted research to inform decision-making about how best to respond to this tragic crisis.
The B.C. government and British Columbia Centre on Substance Abuse ought to implement their own safeguards to address these conflicts of interest immediately.
This article was produced through the Breaking Needles Fellowship Program, which provided a grant to Canadian Affairs, a digital media outlet, to fund journalism exploring addiction and crime in Canada. Articles produced through the Fellowship are co-published by Break The Needle and Canadian Affairs.
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