The Alberta government’s new tax credit has found its first buyer one year after the program was announced.
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The Little Potato Company (TLPC) just opened its doors on a new $40 million processing plant in Nisku, south of Edmonton, the location of its initial plant. The tipping point appears to have been the government’s Agri-Processing Investment Tax Credit. It gives companies that would establish or expand agri-food processing businesses in Alberta a 12 per cent non-refundable tax credit on capital expenditures of more than $10 million.
Savings for TLPC are estimated at $1.3 million.
Agriculture and Irrigation Minister RJ Sigurdson spoke buoyantly of landing the first big fish.
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Alberta Agriculture and Irrigation
“It’s a huge win,” he said. “Alberta is serious about agri-food processing and having investment in the space. This investment is just what I believe is the start of the wave of that investment that we’re going to see and the growth in agri-food processing in the province of Alberta.”
With the tax credit, Sigurdson said Alberta should now be the top destination for any value-added business in the country and it has the lowest tax regime in Canada. Within his ministry is a team that beats the bushes so companies know the province’s benefits. That team helped TLPC realize the opportunity.
“When the government signals it’s important that you stay and it’s important that they are investing in businesses like that, it definitely has an anchoring effect on a company like us, so it does play a role, 100 per cent,” said Angela Santiago, CEO and co-founder of TLPC.
The company had nearly outgrown its original facility and had outsourced third-party cold storage due to space constraints. Santiago is pleased with the expansion.
photo:
The Little Potato Company
“We’ve got a runway for growth, which is super exciting. That means more growing of potatoes in Alberta. It means more processing and packaging of the potatoes in Alberta.”
The new plant will require more workers, but a different kind. With increased emphasis on automated processing, new skills will be required to operate production lines.
TLPC now employs 224 people, with more coming, and the new facility will nearly double its production to 125 million pounds, up from 65 million.
Potato farmers may also benefit. Alberta is the country’s top producer and grows 25 per cent of the total national potato output, besting Prince Edward Island by 4.2 million pounds. Alberta farmers planted 80,100 acres in 2023.
TLPC will need more spuds to sustain its export-focused business. About 70 per cent of its potatoes go to U.S. markets such as Wisconsin, Washington State, Pennsylvania and California.
As the province continues its push for more investment, Sigurdson said the potential is near limitless in Alberta’s agricultural sector.
“Investment in the agricultural space is one of our greatest opportunities to diversify our economy, grow our GDP and support our agricultural industry here in the province,” he said.
To learn more about the tax credit, visit the Government of Alberta website.
The ins and outs of Alberta’s Agri-Processing Investment Tax Credit
During the run-up to the 2023 provincial election, the governing UCP made a pillar of its agriculture platform to cut red tape and make it easier for value-added agribusiness to do business in the province.
Now that it has its first success story, the provincial government expects more investment to come. There is $175 million available in tax credits for each project and corporations have 10 years to claim the tax credit against their provincial income tax. To be eligible, a business has to spend $10 million or more within the province.
Eligible capital expenditures include:
- Land
- Facility construction or expansion
- Processing equipment
- A new build/expansion that makes it possible to produce new or upgraded products
Ineligible:
- Construction or expansion of a greenhouse or vertical farm
- Growing or harvesting crops and livestock
