Written By Murray Coleman, Jason Roth, Shawn Munro, Kelly Ford and Xaverie MacLennan
Alberta is launching a new agri-processing tax credit in Spring 2023 to attract new large-scale investment to the sector and expand opportunities for primary producers.
The Alberta Agri-Processing Investment Tax Credit will provide a 12 percent non-refundable tax credit against eligible capital expenditures for corporations investing $10 million or more to build or expand agri-processing facilities in the province. This initiative will be introduced in Alberta's 2023 Budget, which is scheduled to be delivered on February 28, 2023.
Alberta's Minister of Agriculture and Irrigation described the steps to access the tax credit:
- A company makes a minimum $10 million in new investment in value-added agri-processing in Alberta—in a new project or the expansion of current facilities.
- The project becomes operational and profitable.
- The company becomes eligible for the tax credit.
- Companies have approximately 10 years to use the credit.
The Minister describes the range of eligibility for projects as, "any raw agricultural commodity that's getting upgraded or changed or value added - anything from beef or chicken, to canola, wheat, a flour mill, pea fractionation facility - really anything you can think of."
Capital investments made on or after February 7, 2023, may be considered in the calculation of a company’s total tax credit. The program will be available to all qualifying applicants, including corporations that have received funding from other provincial sources.
The Agri-Processing Investment Tax Credit will be ready to accept applications in Spring 2023 and detailed eligibility criteria for the program are currently under development. Bennett Jones will provide more details and insights on the program when they become available.
The Government of Alberta's press release on the tax credit is available here.
Food Manufacturing in Alberta
In creating the Agri-Processing Investment Tax Credit, Alberta analyzed similar incentives in about 15 jurisdictions in Canada and the U.S. that the province competes with. The tax credit attempts to make Alberta a top destination for value-added agricultural projects and capitalize on growing global demand for processed and packaged food. Global demand for food is expected to increase by up to 56 percent by 2050.
Food manufacturing sales reached a record $20.1 billion in Alberta in 2021 and the sector was the largest manufacturing industry in the province. It accounted for 23.8 percent of total provincial manufacturing sales in 2021.
Bennett Jones Agribusiness, Food and Beverage Team
Bennett Jones' Agribusiness, Food and Beverage group combines strong industry knowledge with a broad cross-section of expertise in regulatory, mergers & acquisitions, intellectual property, corporate commercial and technology law. Our lawyers have a comprehensive understanding of the legal issues and challenges faced by Canadian, cross-border and international clients in food and beverage production and agriculture.
If you would like to discuss the Agri-Processing Investment Tax Credit and what it could mean for your company, please contact one of the authors.