Livestock tax proposal draws fire

COALHURST, Alta. — A proposed tax on livestock in Lethbridge County has raised the collective ire of feedlot operators, the Alberta Beef Producers and the Alberta Cattle Feeders Association.

They say the plan imposes an unfair burden on feedlots in particular and could cripple their operations or drive them out of business. It could also set a precedent for other rural municipalities who face funding shortfalls, thus damaging the cattle industry elsewhere in the province.

The county plans to raise $2.6 million this year for road and bridge repair by charging $3 per animal unit.

However, the tax would increase to $4 per animal unit in 2017 because the county says it actually needs $3.5 million a year to maintain its 2,000 kilometres of roads and 167 bridges.

The proposal was given first reading earlier this month and is scheduled for further discussion at a county council meeting April 21.

“This proposal here makes the County of Lethbridge a very inefficient place for any feedlot to operate,” said cattle feeder John Vander Heyden, who has operations in the heart of southern Alberta’s cattle feeding region, dubbed feedlot alley.

“They’ve just shut the doors for any feedlots to build or expand when it’s pretty tight anyways.

“What’s going to happen now is we are less competitive. We won’t have the same monies as a competitor in another county.”

Feedlot owners Cor Van Raay and Rick Paskal voiced similar objections at an April 12 meeting in Coalhurst.

Cattle feeders would bear the heaviest burden in the proposal. County calculations indicate they would provide almost $1.7 million this year, while per-animal-unit levies on hog, dairy, chicken and sheep producers would generate about $1 million.

The feedlots would pay $2.26 million next year if the proposal were to be approved for 2017.

Livestock producers would be responsible for about 70 percent of the total annual tax increase with a special farmland tax and a levy per tonne of hauled gravel making up the rest.

County reeve Lorne Hickey found himself surrounded by concerned cattle feeders at the Coalhurst meeting, one of several events held to explain the plan and the financial need.

He said in an interview that the county has limited options for higher infrastructure funding. The provincial Strategic Transportation Infrastructure Program (STIP) is empty (although that may be addressed in the April 14 budget) and federal infrastructure funds, if they come, are unlikely to meet the need.

Lethbridge County has little oil and gas revenue compared to many other rural municipalities, and roads built in the 1950s through to the 1980s are not up to the demands of modern hauling equipment.

As well, the Municipal Government Act restricts the ways in which municipalities can apply taxes. That act is up for review this year.

Feedlot operator John Schooten said the county’s proposed tax essentially targets about 15 feedlot owners who feed 400,000 of the 500,000 cattle on feed in the region. As such, it is unfair and inequitable.

He said a tax of $10 per acre of farmland would generate the amount needed, and all producers would pay a share because most feedlots also own farmland.

Alberta Beef Producers chair Bob Lowe, who lives in a neighbouring municipality, attended the Coalhurst meeting to voice ABP objections.

“I think it’s a very short-sighted, narrow-minded approach to raising revenues,” said Lowe.

“ABP absolutely opposes this tax. To pick on one segment of society, well, it’s just going to drive industry out. In the end, if they keep up this approach, feedlot alley will go away. The industry will just go away. We believe, as ABP, this infrastructure thing should never have been pushed from government down to the municipalities, and a way to fix this problem is push it back up to the provincial level.”

Lowe agreed roads and bridges must be maintained to allow commodity flow, but an infrastructure funding proposal might be announced this summer.

“It would be nice if these guys would kind of wait and see what that is.”

Hickey said delayed funds mean delayed work.

“I guess if we delay it, we’ll have no funding for infrastructure this year, so if that’s what the majority of people want, I suppose come the end of the day, that’s maybe what we’ll do,” said Hickey.

“There’s a consequence to every action.”

Lowe said he doubts all funding options have been adequately considered, a view shared in a brief put forward by the ACFA and the Canadian Federation of Independent Business.

Amber Ruddy, Alberta director for the CFIB, said she is “flabbergasted” by the county tax proposal.

“We have heard from a number of members that have phoned in with concerns about the proposal. This is an unprecedented new way to bring in a tax. We work with municipalities across the province and across the country, and we haven’t seen something quite like this,” Ruddy said.

“A lot of different municipalities have infrastructure issues. What makes this the only solution? I think they need to go back to the drawing board and figure out something that’s going to be more palatable and accepted by the community because, you know, roads and bridges are used more than just by ranchers and farmers, and I think you need to come to some kind of happy medium here.”

The ACFA published a paper April 5 outlining what it considered to be the flaws in the county’s tax plan and put forward several alternatives. It said a special agricultural levy should be considered only after other options are explored.

“And if a new agriculture-based tax is to be employed, it should be a tax on cultivated land and not livestock,” the association said.

“This former approach spreads the funding burden across the entire agricultural community, including cattle feeding operations.”

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