Revamps to Alberta’s bioenergy producer credit program and scientific research tax credit, plus a substantial jump in ag income support payouts, are lined up in the provincial government’s latest budget papers.
Finance Minister Ron Liepert’s 2012 budget speech, delivered Thursday, lays out $1.07 billion in spending in the agriculture, food and rural development department for 2012-13, against $751.62 million in revenue from federal transfers, insurance premiums, fees, licenses and investment income.
As expenses go, the department’s single largest line item remains payouts for crop, hail and livestock insurance, estimated at $429.83 million in 2012-13. That’s down from $474.26 million in the 2011-12 budget, the more recent spending forecast for 2011-12 of $430.43 million and actual insurance spending of $450.02 million during 2010-11.
The biggest jump, however, is an expected 83.4 per cent increase in agriculture income support spending, to $226.29 million in 2012-13, up from $171.5 million in 2010-11 and the current forecast of $123.4 million for 2011-12.
"Strong commodity prices and excellent weather conditions during the fall harvest season limited the need for disaster support to the agriculture industry in 2011-12," Agriculture Minister Evan Berger wrote in last month’s 2012-15 business plan for the department.
The province’s Agricultural Financial Services Corp. (AFSC), which administers both the ag insurance and ag income stabilization programs, is expected to spend more on debt servicing in 2012-13 at $75,462,000, up from $53,993,000 in 2010-11 and the 2011-12 forecast of $59,918,000. The debt servicing line item alone is targeted to increase to over $100 million by 2014-15.
The province’s Alberta Livestock and Meat Agency (ALMA), which handles the provincial Livestock and Meat Strategy, is budgeted for $39.1 million in 2012-13, down from the 2011-12 forecast of $40.24 million.
The 2012 budget also includes $444 million in support for bioenergy initiatives over three years, including $66 million in 2012-13.
In that funding is the Bioenergy Producer Credit Program to provide incentives to develop bioenergy products — but the program is to be revised to exclude any "stand-alone operations producing ethanol from cereal grains."
The province will also budget an extra $25 million to cover changes to its Scientific Research and Experimental Development (SR+ED) Tax Credit, which offers a 10 per cent tax credit for qualified expenditures incurred in Alberta, up to a maximum credit of $400,000.
Expenditures eligible for the Alberta credit have previously been reduced by the amount of the federal government’s SR+ED investment tax credit received on those same expenditures — a reduction referred to as "the grind" — but the 2012 budget eliminates that provision.
Corporations with permanent establishments in Alberta — but not individuals or partnerships — can claim the provincial credit, which otherwise uses the "federal definition" of SR+ED.
The federal SR+ED program allows farmers to claim a tax credit on the portion of money paid into commodity checkoffs that funds eligible ag research.
Liepert’s provincial budget also plans for $24 million in spending on programs "to grow Alberta’s presence internationally to ensure better market access for our products," and new spending of $750,000 to fund operations of new research greenhouse facilities at the Crop Diversification Centre (South) at Brooks.
Liepert’s 2012 budget in total calls for $40.3 billion in provincial revenue against $41.1 billion in expenses, leading to an $886 million deficit — but the budget notes the balance of the province’s Sustainability Fund now sits at $3.7 billion.