Another 200,000 acres of southern Alberta farmland will be irrigated in coming years as a result of an $815 million injection into the region’s agricultural industry. That will add to the existing 1.5 million acres already under irrigation in the south.
The funds will be used to build four new off-stream water storage reservoirs, adding to the current 50, and pay for 56 modernization projects, most of which involve conversion of open canals to underground pipelines.
The announcement made Oct. 9 “a good news day,” said Alberta Premier Jason Kenney. “We need some good news in this tough year.”
Eight of Alberta’s 13 irrigation districts have formed a consortium to provide 20 percent of the funding, or about $163 million. Approximately $245 million will come from the Alberta government and the remaining 50 percent, or $407 million, comes in the form of a loan financed by the Canada Infrastructure Bank.
That amount will be repaid by the irrigation districts over a period of 35 years, with the option to renew after that, and will be amortized over 50 years, according to Alberta Agriculture Minister Devin Dreeshen, who participated in the announcement along with Kenney and other provincial ministers in Calgary’s BMO Centre.
Federal Minister of Infrastructure and Communities Katherine McKennna and Canadian Infrastructure Bank chair Michael Sabia participated by video from Ottawa.
The $407 million from the CIB is part of the $1.5 billion for irrigation projects that was announced Oct. 2, which in turn was part of a $10 billion national infrastructure plan to be implemented over the next three years.
George Lohues, chair of the St. Mary River Irrigation District board, said the loan arrangement isn’t the typical way irrigation districts fund projects but given financial pressures on the province, districts agreed future funding might be limited.
“We won’t get a better opportunity to build infrastructure now,” said Lohues. “The terms are very favourable so we thought it was the best opportunity that we would be able to get. We are very happy about this announcement.”
The eight participating districts have been working on details of the projects since July.
“We think it’s a very good fit,” said Lohues.
“There definitely will be a lot of payback for taxpayers because irrigation has an excellent return on investment. This gives us some security to plan for the future and to build infrastructure quicker.”
One of the four new off-stream reservoirs will be in the SMRID, Lohues said, but details had yet to be announced as of Oct. 9.
Dreeshen called the development an historic investment in Alberta.
“Obviously the economic benefits for farmers (are) to be able to add more specialty crops in their crop rotation as well as attracting more value-added food processors here to the province of Alberta because they do look for that stable, steady supply of product that comes from irrigation,” said Dreeshen.
Agricultural processing related to irrigation already generates about $2 billion in annual sales and 18 percent of total provincial food processing sales.
Dreeshen said the department has calculated that the investment will add $436 million in GDP growth once projects are complete.
During the announcement, Kenney said the work is expected to create up to 1,300 immediate construction jobs and up to 6,800 direct and indirect jobs.
“This investment is both a tremendous source of good jobs that are desperately needed right now and a slam dunk for growth in one of our economy’s most important industries,” said Kenney.
He said the irrigation system has been successful but has gone for too long without renewal.
“This investment today, it’s not just good for jobs and the economy, not just good for farmers and food processors. Its also good for the environment because we’re going to be taking open air irrigation canals and burying them in pipes that will improve water retention and conservation.”
Of the $815 million, $520 million will be used for the new reservoirs and about $295 for the modernization projects.
Dreeshen said the additional acres designated for irrigation are within existing water allocations “so we haven’t had to go out and try to increase the water allocation to allow this irrigation expansion. That’s how we were able to move so quickly with this.”
New reservoirs will allow the province to capture more snow melt and spring runoff from the mountains so it can be used later in the growing season when it is needed, he said.
The eight irrigation districts involved are Bow River, Eastern, Lethbridge Northern, Raymond, St. Mary River, Taber, United and Western.
In a news release about the funds, McKenna specifically noted the timing of the announcement.
“This Thanksgiving, we can be thankful that further improvements to Alberta’s already diverse agri-food sector will boost food production while strengthening Canada’s food security and expanding export opportunities. Through its Investing in Canada Plan, the Government of Canada is helping build sustainable modern public infrastructure, creating jobs, and making Canada more globally competitive.”