A rural municipal leader says a new agriculture tax credit could reap big future rewards.
The province said on Wednesday the upcoming budget will include the Alberta Agri-Processing Investment Tax Credit will 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.
Rural Municipalities of Alberta president Paul McLauchlin said if the program is successful it could lure more companies that process the products of Alberta’s farms into value-added products.
The beef industry has faced supply chain issues that would be at least partly alleviated with more processing capacity in Alberta, he offered as one example.
“This also opens up a tremendous opportunity to add value to meat processing,” he said.
“From the producer side, whether it’s pork, beef or chicken, that value-added increases demand and provides more consistency.”
McLauchlin believes there are companies waiting in the wings for the right opportunity to build processing capacity in this province and the government financial assistance may help.
There has been a lot of interest in fractionating proteins out of agricultural products to create meat substitutes among other things.
“The pea protein fractionation is a huge conversation. That trend will continue.”
More Than Proteins Ltd. (MTP) announced last year it is building a $160 million plant-based protein processing facility near Bowden.
The plant will take yellow peas and other legumes from central Alberta farmers and turn them into a protein powder that will then be sold to other processors to be converted into everything from egg substitutes, pet food, glass (clear) noodles, yogurt, cheese and alternatives to plant-based meats and even fish-like products.
Lethbridge’s Cavendish Farms is another example of the potential to do more with Alberta’s agricultural bounty. The $430 million frozen potato processing facility was officially opened in October 2019 and will process 735 million pounds of potatoes annually.
Cavendish takes raw potatoes and turns them into bagged fries, potato bites and other products.
“That’s literally where the food industry is going, so I’m hearing more and more of these types of investments occurring in the agricultural production end of things, for sure.”
“It wasn’t that long ago we would send product from Canada in containers to China. They would separate and fractionate and then we would get the raw products back to Alberta.”
Keeping food processing at home also adds provides more pricing certainty for Alberta farmers, he said.
The Alberta government says food manufacturing sales reached a record $20.1 billion in 2021 and the sector employed 22,400 Albertans.
The food manufacturing sector was also the largest manufacturing industry in the province, accounting for 23.8 per cent of total provincial manufacturing sales in 2021.