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Agriculture

New agri-processing tax credit to attract large-scale investment and diversify Alberta economy

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Capitalizing on value-added agriculture

Alberta is introducing a new agri-processing tax credit that will help attract large-scale investment, diversify the economy and create jobs for Albertans.

As provinces and states across North America look to capitalize on the potential of the agri-processing industry, Alberta will build on the province’s competitive advantages by launching a new tax credit program in spring 2023. The program will ensure Alberta maintains a competitive edge over other jurisdictions and is able to maximize the number of opportunities that help grow the economy and create jobs.

Budget 2023 will introduce the Alberta Agri-Processing Investment Tax Credit to provide a 12 per cent non-refundable tax credit to support this growth and attract investment. To be eligible, corporations must make a minimum capital investment of $10 million in value-added agri-processing in Alberta.

“Agriculture has been a key part of Alberta’s economy for more than 100 years and I’m excited to see this tax credit program roll out so that it continues to be a key part of our economy in the future. Alberta’s agricultural producers play an important role in feeding the world and I look forward to seeing further innovation and growth in this sector.”

Danielle Smith, Premier

“Alberta has the fundamentals to take our value-added agriculture industry to new heights and meet the increasing global demand for food. The new agri-processing tax credit will allow us to attract large-scale agri-food projects that will help grow our industry, increase opportunities for primary producers, create jobs and feed the world.”

Nate Horner, Minister of Agriculture and Irrigation

As Alberta’s oldest industry, agriculture is foundational to the province’s economy and identity. Incentivizing large capital investments will ensure the sector remains strong for generations to come and capable of adapting to the economy of the future.

“The Alberta Agri-Processing Investment Tax Credit further positions Alberta as an attractive place to do business. By supporting this quickly evolving and increasingly competitive sector, this government is further encouraging investment that will create jobs and grow Alberta’s economy.”

Travis Toews, President of Treasury Board and Minister of Finance

“With the introduction of the agri-processing investment tax credit, Alberta has positioned itself to attract more large-scale sector investments than ever before from companies like mine. This is the right way for Alberta’s agri-food sector to support diversification, create jobs, compete and win.”

Rich Vesta, CEO, Harmony Beef

“Alberta is widely recognized in the business community for its competitive tax rates, skilled workforce and strong primary agriculture sector. By offering a 12 per cent tax credit to agri-food processors making a minimum investment of $10 million, Alberta is maintaining its status as a top destination for value-added agricultural projects.”

John Heimbecker, owner, Parrish and Heimbecker

“Population growth, a changing climate and increased costs of food are all indicators that food security will be a growing challenge. The new agri-processing tax credit program is a great incentive that will continue to highlight rural Alberta as the home of an innovative agriculture industry that plays a vital role in supporting food production.”

Paul McLauchlin, president, Rural Municipalities of Alberta

Quick facts

  • Food manufacturing sales reached a record $20.1 billion in 2021 and the sector employed 22,400 Albertans.
  • The food manufacturing sector was the largest manufacturing industry in the province, accounting for 23.8 per cent of total provincial manufacturing sales in 2021.
  • Global demand for food is expected to increase by up to 56 per cent by 2050.

This is a news release from the Government of Alberta.

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Agriculture

It’s time to end supply management

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From the Frontier Centre for Public Policy

By Ian Madsen

Ending Canada’s dairy supply management system would lower costs, boost exports, and create greater economic opportunities.

The Trump administration’s trade warfare is not all bad. Aside from spurring overdue interprovincial trade barrier elimination and the removal of obstacles to energy corridors, it has also spotlighted Canada’s dairy supply management system.

The existing marketing board structure is a major hindrance to Canada’s efforts to increase non-U.S. trade and improve its dismal productivity growth rate—crucial to reviving stagnant living standards. Ending it would lower consumer costs, make dairy farming more dynamic, innovative and export-oriented, and create opportunities for overseas trade deals.

Politicians sold supply management to Canadians to ensure affordable milk and dairy products for consumers without costing taxpayers anything—while avoiding unsightly dumping surplus milk or sudden price spikes. While the government has not paid dairy farmers directly, consumers have paid more at the supermarket than their U.S. neighbours for decades.

An October 2023 C.D. Howe Institute analysis showed that, over five years, the Canadian price for four litres of partly skimmed milk generally exceeded the U.S. price (converted to Canadian dollars) by more than a dollar, sometimes significantly more, and rarely less.

A 2014 study conducted by the University of Manitoba, published in 2015, found that lower-income households bore an extra burden of 2.3 per cent of their income above the estimated cost for free-market-determined dairy and poultry products (i.e., vs. non-supply management), amounting to $339 in 2014 dollars ($435 in current dollars). Higher-income households paid an additional 0.5 per cent of their income, or $554 annually in 2014 dollars ($712 today).

One of the pillars of the current system is production control, enforced by production quotas for every dairy farm. These quotas only gradually rise annually, despite abundant production capacity. As a result, millions of litres of milk are dumped in some years, according to a 2022 article by the Montreal Economic Institute.

Beyond production control, minimum price enforcement further entrenches inefficiency. Prices are set based on estimated production costs rather than market forces, keeping consumer costs high and limiting competition.

Import restrictions are the final pillar. They ensure foreign producers do not undercut domestic ones. Jaime Castaneda, executive vice-president of the U.S. National Milk Producers Federation, complained that the official 2.86 per cent non-tariffed Canadian import limit was not reached due to non-tariff barriers. Canadian tariffs of over 250 per cent apply to imports exceeding quotas from the European Union, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and the Canada-United States-Mexico Agreement (CUSMA, or USMCA).

Dairy import protection obstructs efforts to reach more trade deals. Defending this system forces Canada to extend protection to foreign partners’ favoured industries. Affected sectors include several where Canada is competitive, such as machinery and devices, chemicals and plastics, and pharmaceuticals and medical products. This impedes efforts to increase non-U.S. exports of goods and services. Diverse and growing overseas exports are essential to reducing vulnerability to hostile U.S. trade policy.

It may require paying dairy farmers several billion dollars to transition from supply management—though this cartel-determined “market” value is dubious, as the current inflation-adjusted book value is much lower—but the cost to consumers and the economy is greater. New Zealand successfully evolved from a similar import-protected dairy industry into a vast global exporter. Canada must transform to excel. The current system limits Canada’s freedom to find greener pastures.

Ian Madsen is the Senior Policy Analyst at the Frontier Centre for Public Policy.

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Agriculture

Grain farmers warn Canadians that retaliatory tariffs against Trump, US will cause food prices to soar

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From LifeSiteNews

By Anthony Murdoch

 

One of Canada’s prominent agricultural advocacy groups warned that should the federal Liberal government impose counter-tariffs on the United States, it could make growing food more expensive and would be a nightmare for Canadian farmers and consumers.

According to Grain Growers of Canada (GGC) executive director Kyle Larkin, the cost of phosphate fertilizer, which Canada does not make, would shoot up should the Mark Carney Liberal government enact counter-tariffs to U.S. President Donald Trump’s.

Larkin said recently that there is no “domestic phosphate production here (in Canada), so we rely on imports, and the United States is our major supplier.”

“A 25% tariff on phosphate fertilizer definitely would have an impact on grain farmers,” he added.

According to Statistics Canada, from 2018 to 2023, Canada imported about 4.12 million tonnes of fertilizer from the United States. This amount included 1.46 million tonnes of monoammonium phosphates (MAP) as well as 92,027 tonnes of diammonium phosphate (DAP).

Also imported were 937,000 tonnes of urea, 310,158 tonnes of ammonium nitrate, and 518,232 tonnes of needed fertilizers that have both nitrogen and phosphorus.

According to Larkin, although most farmers have purchased their fertilizer for 2025, they would be in for a rough 2026 should the 25 percent tariffs on Canadian exports by the U.S. still stand.

Larkin noted how Canadian farmers are already facing “sky-high input costs and increased government regulations and taxation.”

He said the potential “tariff on fertilizer is a massive concern.”

Trump has routinely cited Canada’s lack of action on drug trafficking and border security as the main reasons for his punishing tariffs.

About three weeks ago, Trump announced he was giving Mexico and Canada a 30-day reprieve on 25 percent export tariffs for goods covered by the United States-Mexico-Canada Agreement (USMCA) on free trade.

However, Ontario Premier Doug Ford, despite the reprieve from Trump, later threatened to impose a 25 percent electricity surcharge on three American states. Ford, however, quickly stopped his planned electricity surcharge after Trump threatened a sharp increase on Canadian steel and aluminum in response to his threats.

As it stands, Canada has in place a 25 percent counter tariff on some $30 billion of U.S. goods.

It is not yet clear how new Prime Minister Mark Carney will respond to Trump’s tariffs. However, he may announce something after he calls the next election, which he is expected to do March 23.

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