(Lethbridge News Now)

By David Opinko

Lethbridge County denies tax cut for livestock producers, but provides some relief

Jun 19, 2020 | 11:19 AM

LETHBRIDGE, AB – Livestock producers in Lethbridge County will get some financial relief this year, just not what they were hoping for.

Back in May, Stan Vanessen with AVE Farms Ltd. near Picture Butte wrote to the county requesting that the 2020 Business Tax be reduced by 50 per cent.

It should be noted that the 2020 Business Tax only applies to agricultural livestock producers and is more commonly referred to as a “head tax” and not a property tax.

The letter was cosigned by approximately 50 farm families, Hutterite Colonies, agricultural corporations, and other livestock commodity groups.

“With the market disruptions the COVID crisis caused where the packing processing plants were shut down or idled or definitely slowed down in some cases, there was obviously a massive oversupply of product from beef to milk to poultry. The producers in the Lethbridge County area were all facing depressed prices and product they couldn’t actually get rid of.”

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Vanessen runs a mixed operation with pigs and cattle and is also a board member of Alberta Pork.

On the hog side, he told LNN that prices have dropped “dramatically”, partly due to them being based on U.S. prices and that country facing many of the same issues we are seeing in Canada.

He adds that there is currently a backlog of at least 100,000 cattle in the Albertan system, so if processors know they will get the animals either way, they do not have much of an incentive to pay what he believes would be a fair price.

READ MORE: Premier announces support for cattle operations facing COVID created backlogs

In the end, Lethbridge County council decided this week to deny the request for the tax cut.

The main reason cited is that there are many special interest groups in the area and they must all be provided with equal opportunities.

“Allowing one interest group alternative financial opportunities would set an unfair and inequitable precedent not favourable for the County as a whole,” reads a document from Thursday’s meeting.

Vanessen says he is disappointed the government went in this direction, but he understands the point about not giving some people special treatment and not others.

At the same time, he feels it would have sent a positive message that Lethbridge County supports those in agriculture and the economy as a whole.

“I think a lot of people would agree that agriculture is the economic engine in Southern Alberta and there is a spinoff coming from agriculture that provides prosperity and, at least, business for a lot of the secondary industries, so that’s why we hoped that, you know, with tax relief for at least the primary side of agriculture and the industry, maybe we could continue supporting down the line.”

For AVE Farms specifically, the tax cut would have saved them “several thousands of dollars.”

Instead, the county took a different step to ensure those who pay the Business Tax can afford to do so this year.

They have amended the payment schedule to say that 50 per cent of the owing amount will be due on or before July 31, 2020, while the remaining balance can be paid as late as December 1.

For the first half, penalties will be applied on unpaid amounts as of September 30 at a rate of five per cent.

A second fine of five per cent will be charged on December 1 for all owing amounts, while a third tax penalty will be applied on January 31, 2021, at a rate of 15 per cent.

While Vanessen says it is great the county was still able to do something, he is worried about whether farmers will even be able to pay by the extended deadlines.

“Our future for the next six months doesn’t look very good and I hope they might consider levying the 50 per cent in the future because we’re in trouble right now.”

“Based on what they’re saying with a possible second wave coming and further market disruptions, if they didn’t have it now, I don’t know how they’ll be able to come up with that tax money with continued losses that we’re going to be seeing.”

Revenues from the Business Tax are primarily used for infrastructure projects in Lethbridge County such as roads.

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