Saskatchewan is renowned as Canada’s breadbasket province. With more than 40 per cent of the country’s arable land, it’s a well-earned reputation.
Yet the province also has the right ingredients to become a global leader in the burgeoning industry of value-added agri-business, says Chandra Mark, manager of agri-value and life sciences with the Government of Saskatchewan.
“Saskatchewan has a very strong business environment in general combined with a strong agricultural sector,” says Mark, who helps agri-businesses navigate the global marketplace and develop and expand their footprints.
“It also has strong government support while being one of the few provinces in the agri-value industry where you can develop your own variety of seed and grow and manufacture it into a final product.”
It’s an ideal mix — one that is generating almost $5 billion in economic activity alone.
While this figure represents only a small portion of the province’s diversified economy, the focus for government and industry is to grow the value-added agri-business sector into one of the largest in Canada, if not the world.
“It’s extremely important, especially in terms of economic development, because we want to keep the value at home instead of shipping raw commodities to other parts of the world for someone else to add value and capture the added profits,” Mark says.
Some of the world’s largest agricultural firms have taken note of the province’s potential. Among them is Cargill.
A multinational company based in the United States, Cargill employs more than 450 people across six different agri-business sectors at 28 locations in Saskatchewan.
Headquartered in Minnesota, the firm’s activities in Saskatchewan include grain handling, canola processing, specialty seed breeding, malting and animal nutrition.
“Saskatchewan is, and will continue to be, an important arm of business for Cargill,” says Chantelle Donahue, vice-president with the firm.
Overall, 26 per cent of the company’s Canadian investment has come to Saskatchewan. The province has received more than $300 million in capital investment from Cargill over the past five years.
“These investments demonstrate the company’s confidence in the continued growth and competitiveness of the agriculture industry in Saskatchewan,” says Donahue.
A state-of-the-art canola processing plant in Clavet and the expansion of a specialty seed research facility in Aberdeen are just two of the significant investments Cargill recently made in the prairie province.
In part it’s Saskatchewan’s business-friendly climate that has made it attractive to investment by firms such as Cargill. The government is continually streamlining services for agri-business, reducing red tape while providing significant incentives for investment through a number of tax credit and joint funding programs.
The Manufacturing and Processing Exporter Tax Incentive , for example, provides non-refundable tax credits to eligible corporations adding full-time jobs in the province. Each new full-time employee added results in a tax credit of $3,000 for each year between 2015 and 2019.
Other initiatives include the Market Development Program that helps companies connect with new customers in the global marketplace. The Saskatchewan Agri-Value Initiative assists in the development of new products while the Saskatchewan Lean Improvements in Manufacturing (SLIM) program helps firms improve efficiency in manufacturing processes.
Unlike the Manufacturing and Processing Exporter Tax Incentive, Mark says SAVI and the other two initiatives assist firms by providing funding for up to 50 per cent of the cost of new investments.
The incentives are helpful — even to large firms such as Cargill, Donahue says.
“Benefits from these programs were considered early on by Cargill in the project evaluation phase of our commitment process, having the effect of improving the projected financial measures of those projects,” Donahue says.
In turn, the presence of large firms helps reinforce confidence in the province’s industry, Mark says.
“Cargill is very important to Saskatchewan because a company of that size could operate anywhere in the world.”
Besides incentive programs, the government offers additional assistance to businesses, including smaller, homegrown companies. As an example, Mark cites a recent visit to China to build relationships with commodity producers and value-added manufacturers.
“There is a large pea processing company in China that imports the majority of its peas from Saskatchewan to make pea protein there and then exports it back to North America,” she says.
“We’re trying to get that company to invest in Saskatchewan so it processes the peas it buys here in the province before selling them to the North American market.”
With a reputation for responsible governance, a highly skilled talent pool, strong incentive programs and ample raw resources, the province certainly makes a strong argument for investment in its growing value-added agri-business sector, Mark says.
“Saskatchewan certainly has all the ingredients to become a global leader in the agri-value business.”