The Alberta government plans to embark on a strategy to attract investment into value-added agriculture, hoping its latest corporate tax cuts will lure investors.
Details of the strategy are slim, but agriculture minister Devin Dreeshen has said the strategy will be commodity specific, allowing the province to track investments for each sector within the industry.
“We will always be dependent on trade, but the more value-added we can do and process here, we’ll be less dependent on the Chinas of the world,” Dreeshen said. “In one stroke of a pen, they can wreak havoc on exports.”
The strategy will likely be announced sometime after members of the legislative assembly return for the spring sitting.
It doesn’t appear that the province will be playing a direct-investment role with the strategy. Instead, it will likely encourage businesses to invest in Alberta, highlighting its reduction in red tape and low corporate tax rate as incentives.
As well, Dreeshen said, the province will have staff go out to engage with investors. In the past, others have said that Alberta didn’t sell itself hard enough.
“It’s not just about hoping investors will show up on our doorstep,” Dreeshen said. “We have to go out there and attract that investment.”
People working within the agriculture industry welcome the strategy, saying they hope it can help build and diversify the province’s economy, as well as provide farmers with another avenue to market their products.
Tom Steve, general manager of the Alberta wheat and barley commissions, said future processing facilities must be large-scale for the strategy to be effective for producers.
However, Steve wondered whether there is a market for such massive processors.
“We want this as a priority, but we question what the opportunities are,” he said. “If another malt plant were to open, for example, would it be viable enough?”
Some economic development representatives, however, see lots of potential for Alberta.
Peter Casurella, executive director of the SouthGrow Regional Initiative, said the economic opportunity is immense.
He said there’s large potential for more fractionation plants given the increase in demand for pea protein. There could also be opportunities for hemp, canola, industrialized commercial greenhouses, and for small-brand food products, he added.
“There is opportunity for everyone in the province, for every place with an agriculture industry rolling,” he said.
He said it makes economic sense for Alberta to do value-added processing. In the past, he said it was difficult to compete with other countries overseas, but the playing field has levelled.
However, he said governments will need to invest big if they want to reap the benefits of a booming value-added sector.
“If we want to create economic activity, it takes legitimate public investment in making that happen,” he said.
“Big payoffs require big bets. It’s a nice thing to say the private sector can do this on their own, but the private sector will only go where they have the most support. That’s an important consideration as we create a value-added strategy.”
Don Shepert, chair of Alberta Pulse Growers, said he doesn’t expect the government to play an investing role. As well, there are current technological gaps within industry that need to be addressed, he added.
“There is lots of potential, but we still need to do a fair amount of work on it,” he said.
While it appears the province won’t inject significant direct funds, the federal government is committing $950 million for the Innovation Superclusters Program.
Protein Industries Canada, which hopes to expand the potential of plant-based proteins in common agricultural crops, will receive a portion of those funds.
Casurella said that while attracting outside investment is key, it’s also important to focus on local entrepreneurs.
In the Lethbridge region, for example, there are 50 processors and an additional 60 associated businesses. Lots of companies also exist in Calgary and Edmonton.
“History has shown that when business owners have supports to help them get rolling, especially when they have confidence and make wise choices, they are far more likely to make it,” he said. “They then produce jobs and tax revenue for the province. It’s a steam-roller effect.”
Dreeshen said the strategy will address local entrepreneurs to ensure they have options.
Still, there are questions about whether it is economically viable for Alberta to be able to support more value-added processors.
Sven Anders, a professor with a focus on agricultural economics at the University of Alberta, suggested it might be difficult for large processors to see Alberta as viable, given its location and low consumer base.
The exception, he said, is protein extraction from pulses, given the high demand and that investments are already occurring.
“Opportunities exist, but the conditions don’t seem to be that easy,” he said. “If it was easy, everyone would do it.”
He echoed Casurella’s comments, saying local entrepreneurs are often overlooked. For example, government could help make it easier to access commercial kitchen space, he said.
He pointed to the Leduc Food Processing Development Centre, which is funded by the province, as a helpful place where entrepreneurs get the tools and knowledge to scale their products.
“When startups put their skin into the game, it’s risky, but it becomes easier if a public funder helps with that risk,” Anders said.