The rubber has hit the road in southern Alberta’s Lethbridge County, where a per-animal-unit tax imposed last year recently survived a court challenge.
Faced with the need to raise funds for road and bridge improvement, the municipality imposed a “head tax,” which particularly targets confined feeding operations.
In the region colloquially known as feedlot alley, about 85 percent of the new tax burden rests on the shoulders of feedlot operators.
Collectively, they feed about half a million cattle at any given time, so a $3 per head tax — with that number assessed each year subject to county council directive — is a lot of money.
The county rationale is simple. With limited options for deriving more money to improve infrastructure, it has taxed the operations it perceives make the most active and sustained use of that infrastructure.
However, feedlots are businesses based on margin. Their economic health rises and falls with international markets for cattle and beef. Thus they, too, have limited options for generating the higher revenue needed to pay a head tax.
As well, the county’s user-pay idea in terms of road and bridge use has a few potholes. Cattle and feed enter the region from all over Western Canada. The concentrated vehicle traffic required by feedlots serves a widely dispersed industry that overlaps provinces.
Cow-calf producers, grain farmers, transport companies, farm equipment services, manure haulers and other support industries survive and depend on a healthy cattle feeding industry.
It generates employment. It is a major contributor to the county’s gross domestic product that, at $1.6 billion annually, is the largest among rural municipalities in Alberta.
Why has the county gone down this road? Why did it drive a tax that is now being viewed by other rural municipalities — in Alberta and likely in other provinces — as an option for their own infrastructure improvement needs?
It’s because of the aforementioned limited options.
The head tax essentially highlights the challenges faced by all rural municipalities: the need to more adequately fund infrastructure maintenance and improvement even though they have small population/taxation bases.
Higher levels of government, provincial and federal, need to better recognize these challenges and pave the way for rural governments to plan upgrades and adequately fund them.
The problem isn’t new, by any stretch.
“From coast to coast, rural communities are central to Canada’s economic, social and environmental well-being,” said the Federation of Canadian Municipalities in its appeal to the federal government earlier this year.
“But with limited fiscal capacity, rural governments face formidable challenges providing the infrastructure that’s needed to sustain local economies and ways of life.”
The FCM made numerous recommendations that need greater federal attention.
At the provincial level, the government must firmly acknowledge rural infrastructure challenges and take steps to adequately fund the upkeep of a transportation system that benefits both direct users and the entire provincial economy.
With apologies to poet Robert Frost, it may be the road less travelled, but that can make all the difference.
Bruce Dyck, Barb Glen, Brian MacLeod, D’Arce McMillan and Michael Raine collaborate in the writing of Western Producer editorials.