The agribusiness industry holds great potential for investment and growth. Alberta is well-positioned to support this growth given to its abundance of expertise and world-class research and training institutions. As discussed previously by Dentons here, Alberta is a global leader in this multi-billion dollar industry and a frontrunner in the development and implementation of agricultural technology. While inflation and interest rates, ongoing supply chain issues, labour shortages and slow recovery from the COVID-19 pandemic continue to pose challenges to various sub-sectors within the agribusiness industry, the need for capital remains very strong across the board.
As a result, there has been an abundance of programs created to support and fund the agribusiness industry in Canada, and more specifically in Alberta, over the last five years. These programs focus on supporting economic development and encouraging technological innovation on-farm and in value-added facilities.
Below are certain key provincial and federal programs that are currently available to you. Further project-specific funding may also be available depending on the project qualifications.
The Canadian Agricultural Partnership (CAP) - Alberta
CAP is a CA$3 billion, five-year (2018-2023) federal-provincial-territorial government (FPT) investment initiative in the agriculture, agri-food and agri-based products sector. It aims to generate economic growth, job creation and innovation within the sector. CAP provides a suite of government funding programs to businesses and initiatives in the sector and seeks to address region-specific needs. These programs are cost-shared between the federal government and the provincial/territorial government, with each party contributing 60% and 40%, respectively.
In Alberta, CAP has committed CA$406 million towards strategic initiative programs over five years. It has resulted in various streams of funding for businesses and organizations that produce, modify, manufacture and advocate for Alberta-made agricultural products. The programs offered under CAP are the Agriculture and Food Sustainability Assurance Initiative, Efficient Grain Handling Program, Emerging Opportunities Program, Farm Technology Program, Market Assurance Program, Water Program, Youth Agriculture Education Program and many more. These programs were updated in 2022 and are scheduled to be in effect until the expiration of CAP on March 31, 2023. Visit the CAP Alberta website for a full list of programs currently accepting applications.
AgriInsurance, AgriStability, AgriInvest and AgriRecovery
AgriInsurance, AgriStability, AgriInvest and AgriRecovery are business risk management programs offered under CAP.
AgriInsurance is a federal-provincial-producer cost-shared program that aims to mitigate the financial impact of production losses caused by severe and uncontrollable natural hazards. Examples include drought, flood, wind, frost, excessive rain, heat, snow, uncontrolled disease, insect infestations and wildlife. The program is available to most producers in all provinces and eligibility is established by the respective provinces. For more information regarding the program and other means of crop insurance in Alberta, visit the Agriculture Financial Services Corporation website.
AgriStability is a FPT program that provides Canadian agricultural producers with an ongoing risk management tool. It protects Canadian producers from large declines in farming revenue due to production loss, increased costs or market conditions. For more information regarding the program in Alberta, visit the Agriculture Financial Services Corporation website.
AgriInvest is a self-managed savings account between agricultural producers and the federal government. It aims to help producers manage small income declines, make investments to mitigate risk and improve market income. The account builds as annual deposits are made by the producer, up to 100% of its allowable net sales, and will receive matching contribution of 1% of allowable net sales from the federal and provincial/territorial governments. For more information regarding the program in Alberta, visit the Agriculture Financial Services Corporation website.
AgriRecovery is a FPT disaster relief framework that allows all levels of government to work together to help agricultural producers recover from natural disasters by offering joint initiatives that provide assistance beyond what is available through existing programs. It aims to help agricultural producers recover by providing financial assistance for the extraordinary costs necessary to mitigate the impacts of the disaster and resume farming operations as quickly as possible. For more information regarding the framework, visit the Agriculture Financial Services Corporation website.
Alberta Innovates offers programs aimed at helping small and medium-sized enterprises (SMEs) advance business readiness levels and accelerate product commercialization. Under the R&D Associates, SMEs may be eligible for up to CA$67,500 in grants for one year in order to employ in-house professional research and development capability. Additionally, under the Commercialization Associates program, SMEs may be eligible for up to CA$105,000 in funding to employ highly trained personnel for one year.
Alberta Employment and Training Funding Programs
The Canada-Alberta Job Grant is a federal-provincial partnership under which Alberta employers and government share the cost of training new and existing employees. The program contributes up to CA$15,000 per trainee to eligible employers.
The Alberta Jobs Now program provides up to CA$370 million to private and non-profit businesses to support much-needed jobs for unemployed and underemployed Albertans across the province. Employers will be able to apply for a grant that covers 25% of an employee’s salary or training costs for up to a maximum of CA$25,000 per employee. The second application intake for this program closed on December 17, 2021 and the third intake will be announced at a later date.
Accelerated Investment Incentive
The Accelerated Investment Incentive was introduced in 2018 as a means to encourage investment in capital assets. This temporary incentive provides an enhanced first-year allowance for certain property that is subject to capital cost allowance rules. Manufacturing and processing machinery and equipment acquired after November 20, 2018 (until 2024), and available for use before 2028, will be eligible for an initial 100% deduction. A phase-out will begin for property that becomes available for use after 2023.
In relation to agribusiness, this incentive allows businesses to immediately write off the full cost of machinery and equipment used for the manufacturing or processing of goods. These measures are scheduled to be phased out between 2024 and 2027.
The Advance Payments Program is a federal loan guarantee program administered by Agriculture and Agri-Food Canada. It provides agriculture producers with easy access to low-interest cash advances, allowing them to meet their financial needs until they are able to sell their agricultural products. Producers can access up to CA$1,000,000 per program year in advances based on their agricultural product, with the federal government paying interest on the first CA$100,000 advanced to a producer, with preferential interest rates on advances over CA$100,000. This program is available to all Canadian farmers.
AgriInnovate offers repayable contributions that aim to accelerate the demonstration, commercialization and adoption of innovative technologies, products, processes or services in the agricultural sector. In order to be eligible for funding, applicants must show how the proposed project will demonstrate, commercialize or adopt an innovation that is novel to the sector or country. Projects that strengthen Canada’s value-added agri-sectors, or focus on the adoption of new or world leading clean technology (including precision agriculture), will be prioritized. Projects must be completed by March 31, 2023.
AgriRisk Initiatives – Research and Development Contribution Funding Stream
AgriRisk Initiatives Research and Development Contribution Funding Stream aims to provide funding for projects involving new financial tools that allows producers to manage business risks. Eligible activities include: data collection, analysis and modeling, actuarial work into potential financial tools, or testing the feasibility of implementing financial tools. Total program funding is CA$55 million for a five-year period ending in 2023. Project summaries are accepted on an ongoing basis until program funds have been allocated, or otherwise posted on the Government of Canada website. Projects must be completed by December 31, 2022.
AgriScience Program – Projects
The AgriScience program provides funding and support for pre-commercial science activities and cutting-edge research. The AgriScience Projects component aims to support specific shorter-term research activities and mitigate high-risk opportunities that have the potential to yield significant returns. This program is set to run until 2023, or when funding has been fully committed.
Canadian Agricultural Loans Act Program
The Canadian Agricultural Loans Act (CALA) program is designed to facilitate financing to beginning farmers (less than six years of farming experience), existing farmers and agricultural co-operatives. Under the CALA program, the federal government guarantees loans issued by financial institutions, enabling borrowers to benefit from advantageous interest rates, lower equity requirements and flexible repayment terms. The maximum amount a farmer may be eligible for is CA$500,000 for land and equipment combined. Farmers can use these loans to establish, improve and develop farms, while agricultural co-operatives may also access loans to process, distribute or market their farming products.
National Research Council of Canada Industrial Research Assistance Program
The National Research Council of Canada Industrial Research Assistance Program aims to stimulate wealth creation for Canada through technological innovations, by providing assistance to small and medium-sized businesses at all stages of the innovation process. It seeks to accelerate the growth of small and medium-size businesses by providing financial assistance, advisory services and connections to business and R&D expertise. Small and medium-sized businesses with fewer than 500 employees are eligible for this program.
Poultry and Egg On-Farm Investment Program
The Poultry and Egg On-Farm Investment Program is a new program aimed at helping poultry and egg producers adapt to market changes resulting from international trade agreements. It will provide CA$647 million of non-repayable contributions over 10 years to chicken, turkey, egg and broiler hatching egg producers. Applicants have the flexibility to seek funding for eligible activities that started on or after March 19, 2019. The project activities must be completed by March 31, 2031.
The Price Pooling Program is designed to protect marketing agencies in the agricultural sector against unanticipated declines in the market price of their products. It is a price guarantee offered by the Minister of Agriculture and Agri-Food to mitigate against sudden losses to marketing agencies due to market conditions, and it provides the security necessary for marketing agencies to make the initial payment to the producers for the delivered products. In the event that the actual wholesale price is less than the guaranteed price, the shortfall will be paid for by the Government of Canada. The program is open to marketing agencies that meet the definition under section 2(1) of the Agricultural Marketing Programs Act.
Scientific Research and Experimental Development (SR&ED) Program
The SR&ED program provides tax credits and refunds for expenditures on eligible R&D activities in Canada. This program is administered by the Canada Revenue Agency and provides more than CA$3 billion tax incentives annually to businesses. These tax incentives come in the form of income tax deductions, investment tax credits, or refunds. Examples of work that qualifies for the SR&ED tax incentives include experimental research conducted to achieve technological advancement to create or improve new materials, devices, products or processes.
Tariff-free zone for industrial manufacturers
Canada offers a tariff-free zone for industrial manufacturers. Companies can import advanced machinery and equipment into Canada free of import duties. This initiative seeks to reduce costs and increase profitability of investors’ global operations. Its aim is to reduce customs costs, simplify tariff structure and eliminate administrative burdens for businesses. This initiative applies across the country, making Canada more attractive for potential investors.
Technology Transfer and Licensing – Agriculture
The Technology Transfer and Licensing - Agriculture program, administered by Agriculture and Agri-Food Canada, provides an opportunity for businesses to license commercially viable technologies and intellectual properties owned by the Office of Intellectual Property and Commercialization. Businesses are required to submit a plan for developing and marketing the technology alongside the application, and the applications are subject to a competitive and time-sensitive selection process. These technologies may be made available to eligible applicants on an exclusive or non-exclusive basis.
The Protein Industries Supercluster
The Protein Industries Supercluster is one of five innovation “superclusters” in Canada under the federal Innovation Supercluster Initiative. It aims to drive commercially successful innovations through collaborations between businesses, and post-secondary and research institutions in the food-processing sector. Protein Industries Canada is a not-for-profit organization created to facilitate collaboration and work with companies to access new partnerships. Based in Western Canada, Protein Industries Supercluster is expected to add more than 5,000 jobs and contribute $4.5 billion to Canada’s GDP over 10 years.
The Strategic Innovation Fund
The Strategic Innovation Fund aims to promote innovation by providing funding for large-scale, transformative and collaborative projects. The fund is divided into two streams: Business Innovation and Growth; and Collaborations and Networks. The first stream seeks to encourage R&D that accelerates technology transfer and commercialization of innovative products, services and processes. The second stream supports large-scale, national collaborations between the private sector, researchers and non-profit organizations. The fund is open to for-profit and not-for profit organizations in all sectors of the economy.
Agribusiness is a high-priority growth sector in Alberta and there are a variety of options available to businesses to obtain financial support. Dentons will continue to monitor the status and development of these programs and provide you with updates as needed. Please reach out to our agribusiness team to help you navigate the legal landscape and grow your business.