Ending the beef with taxes in Lethbridge County

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Alberta’s heritage industry — beef — and the generations of Albertans who have kept its heart beating for more than 100 years, are worried about their future.

Increased costs from the province, taxation by municipalities, and protectionist threats from the United States have brought untold pressures. Some of these are beyond our control as Albertans. Some aren’t.

There are things we can do to help protect the beef industry. And it’s one worth protecting.
Beef generates over $5 billion a year for Alberta’s farmers. It makes up 75 per cent of the province’s meat exports and 40 per cent of all agricultural exports.

A lot of this beef comes from Lethbridge County. At any given time, there are more than half a million cattle on feed in the county. This business contributes over $600 million a year to the local economy.

The livestock head tax in Lethbridge County is one of the pressures hurting the beef industry, and cattle feeders in particular. It’s intended to help the county raise money to build and repair roads and bridges. But, it unfairly targets cattle feeders.

Cattle feeders realize they need to pay their fair share, but they will be paying 85 per cent of this tax. That’s far from fair. Rather, it is punitive and destructive. The tax will cut into competitiveness.

An independent analysis of the tax concluded that cattle feeding operations will close. We can expect that feeder cattle will migrate to U.S. feedlots. This means Alberta will lose fed production, a value-added component of the beef industry that took generations to build.

Lethbridge County argues the infrastructure money it needs can’t come from increasing property tax on farmland because Lethbridge already has one of the highest farmland tax rates in Alberta.

At first glance, this appears to be true. Farmland property taxes in Lethbridge County are 2.3 per cent of assessed value compared to a provincial average of 1.1 per cent.

But, comparing taxes paid as a percent of assessed value is not the way to measure tax burden. This can only be measured by comparing taxes paid to personal or net business income.

Taxes paid on farmland in Lethbridge County are about 40 per cent lower today than in 1996 (when measured as a percentage of per capita income).

The problem for Lethbridge County — and many other rural municipalities across Alberta — is that the property tax system for farmland is dysfunctional and inequitable. It hasn’t been updated since 1983, and charging even higher taxes to farmland will make this inequity even worse. The fact is, the property tax burden isn’t fairly distributed among farmland owners.

This criticism isn’t new. Government has known about the problem since it commissioned a review of the farmland property tax system in 2002. This review — and its recommended solution — was ignored.

Ignoring the problem is no longer an option. Rural municipalities across Alberta must replace a lot of infrastructure that is nearing the end of its life cycle.

The Alberta Cattle Feeders’ Association (ACFA), along with most other agriculture organizations, believes the best solution is to modernize the farmland property tax system so municipalities can raise the revenue they need to serve their citizens, and support their livelihoods.

Taking another pound of flesh from the beef industry is shortsighted, and it hurts business, prosperity, jobs, and Alberta families.

We need fair, equitable, and transparent tax policy. That’s why we have called on the Minister of Municipal Affairs to work with us in designing a province-wide solution for this province-wide issue.

CASEY G. VANDER PLOEG
Vice President
Alberta Cattle Feeders’ Association

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