UCP optimistic Alberta can attract $1.4 billion in agri-food investment – Calgary Herald

The UCP government is banking that corporate tax cuts will lure more agri-food processing plants to Alberta, helping the province meet ambitious new targets for growing the value-added agriculture sector.

As announced in this week’s provincial budget, the government has set the goal of attracting $1.4 billion in direct investment over the next four years in value-added agricultural processing in Alberta. Agriculture Minister Devin Dreeshen said the possibility exists to create 2,000 new direct jobs in targeted sectors, such as canola processing, pork processing, the malt industry, the greenhouse industry and the emerging plant protein sector.

“With a lot of our commodities, over 90 per cent of the product is just shipped around the world to be processed elsewhere. And that’s something we’d like to have more of done within the province,” Dreeshen said in an interview, adding the government believes its move to reduce the corporate tax rate to eight per cent by 2022 as well as its red tape reduction initiatives will go a long way toward attracting investors.

He added the government will also engage directly with investors via trade missions, actively promoting agri-food opportunities in Alberta.

“With the tax advantage as well as the regulatory advantage, we think there is a huge potential to attract investment here,” Dreeshen said. “But we need to have a team that goes out and tries actively to bring that investment here … you don’t win by sitting home hoping that people come to you.”

Increasing the value of agriculture by doing more processing at home and creating additional markets for Alberta farmers has long been a goal of the province’s producer groups, and there have been some major wins on that front in recent years. Last fall, for example, New Brunswick-based Cavendish Farms opened a $430-million potato processing plant in the Lethbridge area, one of the largest private investments ever in the region. In fact, the Lethbridge region as a whole has become a hub for food processing in Alberta, with more than 120 established processing businesses, including Richardson Oilseed, Sunrise Poultry Processors and Sunnyrose Cheese (Agropur).

In addition, there may be opportunities for Alberta’s pulse sector as a result of the growing global interest in plant-based protein. In 2018, Protein Industries Canada  — a group of businesses, post-secondary institutions and non-profits  — was awarded $153 million from the federal government through its Innovation Superclusters Initiative. The group, which aims to make Canada a world leader in plant protein, has funding available for projects that will help the Canadian prairies transform from an exporter of raw peas and lentils to a value-added processor.

Botaneco Inc., which currently has 25 employees and an office in northeast Calgary, has developed a unique processing technology to extract protein and other ingredients from crops such as pulses, hemp and canola and received $8 million from Protein Industries Canada last summer.

Ward Toma, general manager of Alberta Canola, said the canola industry has probably the strongest value-added component of any Canadian agriculture commodity, with the capacity to process about half the canola harvested annually into oil and meal. The remainder is exported as seed, but that became a problem in 2019 when China, Canada’s No 1 canola market, stopped importing Canadian product.

Toma said there is potential to expand value-added processing even more in Alberta, adding the Chinese import restriction on canola seed could be incentive for a company to invest in additional crushing capacity. Canola growers are also pushing the province to increase the renewable fuel standard for diesel from the current requirement of two per cent renewable content to five per cent — a move Toma says could create more processing jobs.

However, he cautioned that value-added agriculture has been a goal for decades in Alberta, and the province has only made “small steps” toward achieving it.

“It is, of course, the ultimate goal,” Toma said. “We want to make food products here and not ship ingredients somewhere else to be assembled. But you come up against competing interests in other countries — every other country has the same goal we do.”

Thursday’s provincial budget also set the goal of growing Alberta’s exports in primary agriculture to 7.5 per cent per year, and its value-added exports to 8.5 per cent per year. The goal is ambitious, given the hardships farmers have faced in the last year, said Dave Bishop, chair of the Alberta Barley Commission.

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“We had the canola issue, the harvest from hell, now there’s the coronavirus,” Bishop said. “And, of course, the (Coastal GasLink protests and rail) blockades just kind of put the icing on the cake … I think the eight per cent would be doable if we don’t have any unforeseen, unknown circumstances like we did this last crop year.”

The UCP’s targets for agriculture come at the same time the government announced it will eliminate $46 million in spending from the Ministry of Agriculture, a 38 per cent reduction. A total of 277 full-time positions will be eliminated from the department this year, although no details are available about what types of positions will be affected.

In an interview, Dreeshen said the government is committed to finding efficiencies within the ministry while still maintaining services, but Bishop said agriculture groups are concerned.

“We’re very worried about the cuts, the loss of people, and where that leaves us,” Bishop said.

astephenson@postmedia.com

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