Alta. feedlot owners take on county

Five owners of large feedlot operations in southern Alberta have filed a court challenge to new Lethbridge County business tax plans.

The cattle feeders object to a $3-per-animal-unit tax passed by county council in April, which it imposed to help pay for road and bridge improvements.

They also oppose a special tax on farmland passed at the same time.

“This is the biggest donnybrook you’ve ever seen,” said Rick Paskal of VRP Farms, one of the challengers to the new taxes.

“I’m a concerned ratepayer who understands that I have a responsibility to pay my fair share of tax. As a livestock producer, I feel that I have been unfairly targeted, and despite my efforts to collaborate with the county, they have refused to listen to my concerns.”

Other feedlot owners involved in the challenge, some of the largest in the county that is sometimes referred to as feedlot alley, include John Vander Heyden of Grandview Cattle Feeders, Glenn Thompson of Thompson Livestock, John Schooten of Schooten and Sons Custom Feedyard and Lyle Adams of 6A Cattle Co.

They and other livestock producers in the county will be receiving notices this week for an estimated $1.86 million in business taxes, and they will also share in paying an estimated $700,000 in new special taxes on farmland.

The latter is based on $2 per irrigated acre, slightly less than $1 per dryland acre and about 50 cents per acre on grassland.

Lethbridge County Reeve Lorne Hickey said he was not surprised that the new tax bylaws have been challenged.

“I would not say it was hugely unexpected. I think that we realized there was a very high possibility there would be a challenge to this,” he said last week.

“We feel pretty confident that it will be upheld. You can never second guess what somebody else that comes along and listens to both sides of the argument will say at the end of the day, but I think that we’ve done our due diligence and research on this, and the law firm that we did engage to review and make sure that it fell within the limits with the MGA (Municipal Government Act) has done an outstanding job for us.”

Hickey said many of the county’s 2,000 kilometres of roads and 167 bridges are in need of repair, and it lacks sufficient funds to fix them. It considered various options and settled on one that it expects to generate $3.5 million over a two-year period.

However, implementing a tax based on animal units means operators of intensive livestock operations will pay the lion’s share.

Paskal said that is unfair, and he fears that, if implemented, the new tax will increase over time and drive people out of business.

“The County of Lethbridge here feels that this is their cash cow, and they’re starting to milk this cash cow and they’re milking it a little bit now, but the comments that we’ve heard from county council and the indications as to where this tax is going to go, I firmly believe that in 10 years from today you will see half the (cattle feeding) industry.”

The long-term implications of that would affect the entire cattle industry, Paskal added.

“Who benefits from having 500,000 cattle on feed in the County of Lethbridge? Is it the County of Lethbridge, or is it the cow-calf guy in Lloydminster or Weyburn, Sask., or the barley grower in Camrose or Rosetown?”

Hickey said Lethbridge County has approximately 50 percent of the intensive livestock operations in Canada, and the largest gross domestic product, $1.6 billion annually, of all rural municipalities in Alberta.

Alberta Beef Producers and the Alberta Cattle Feeders Association voiced objections at public meetings held before county council approved the new taxes.

ABP president Bob Lowe called it “a very short-sighted, narrow-minded approach to raising revenues.”

The ACFA published a paper outlining the tax plan’s flaws and suggested other ways to raise funds for the county’s “market access network” of roads and bridges.

Hickey said council read the paper but found the suggestions unworkable.

“Most of those recommendations that they put forward weren’t available to raise the money we felt necessary … to reinvest in the market access network because a lot of it was based on your ability to receive funding from other sources,” said Hickey.

Fuel taxes were at one time supposed to be funnelled to roads and infrastructure, but instead they go into general revenue for the provincial and federal governments.

Hickey said the county has lobbied all levels of government to increase its share of the gas tax.

It now receives one-quarter of one percent of fuel taxes collected in Alberta, amounting to about $527,000 annually.

Paskal said fuel taxes would be the fairest way to address the problem.

“Fuel tax is a very effective way of addressing the collection of taxes as you use. The more you use, the more you pay,” he said.

“There’s this misconception out there that (feedlots) don’t pay. A 25,000 head feedlot pays approximately $125,000 a year in fuel tax. Those taxes are not allocated properly.

“If we had to, I would even pay more tax under that system. That is a fair, just and equitable form of tax.”

Paskal said he and others who filed the legal challenge want the new bylaws declared invalid. However, he said they are open to negotiation with the county.

“We have our associations that are willing and ready to negotiate to try to get a fix to this thing before this thing gets out of control,” he said. “We’re prepared to go right to the courts and battle and appeal and anything like that because we think we’re going to be successful in the courts.”

Hickey told a recent tour group that the issue has split the agriculture community. He said the new taxes are a solution for this year, but he is hopeful that changes to the Municipal Government Act, now under review, will provide longer-term options.

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