Tax credit fuels investments in bioprocessing industry

Apr 23, 2024

Alberta is an agricultural powerhouse with diverse and innovative industries, including a thriving bioprocessing sector. When companies set up operations here, they experience a welcoming, business-friendly regulatory environment and one of North America’s most competitive business tax systems.

Alberta’s government introduced the Agri-Processing Investment Tax Credit in spring 2023 to support economic growth and diversification. The tax credit is attracting large-scale investment in value-added manufacturing with Imperial’s $720-million project to build the largest renewable diesel facility in Canada. When production begins in 2025, Imperial’s new facility will convert locally sourced biofeedstocks like canola oil into lower-emission renewable diesel, creating new demand for Alberta producers.

“Our government is doing what it takes to make sure Alberta offers a business-friendly regulatory climate that attracts cutting edge bioprocessing projects like Imperial’s renewable diesel facility. Our Agri-Processing Investment Tax Credit program builds on other competitive tax advantages that encourage corporations like Imperial to invest in our province, create jobs and make an economic impact.”

RJ Sigurdson, Minister of Agriculture and Irrigation
Imperial’s renewable diesel facility is the first of its kind in Alberta and will put the province on the map as a significant producer within Canada. It also contributes to Alberta’s goal of lowering emissions as renewable diesel has potential to reduce annual greenhouse gas emissions by about three million metric tonnes compared with conventional fuels. The new facility at the Strathcona refinery is expected to produce more than one billion litres of renewable diesel per year, or 20,000 barrels per day.

To be considered for the tax credit program, corporations must invest at least $10 million in a project to build or expand a value-added agri-processing facility in Alberta. The program offers a 12 per cent non-refundable tax credit base on eligible capital expenditures. Through this program, Alberta’s government has granted Imperial conditional approval for a tax credit estimated at about $70 million.

“This incredible project demonstrates that our province is becoming a world leader in alternative fuels and energy innovation. Renewable diesel has great potential and is a welcome addition to our energy mix, which includes hydrogen and renewables.”

Brian Jean, Minister of Energy and Minerals
 
“Imperial’s renewable diesel facility will provide an important new lower-emission offering to Canada’s transportation sector. We are excited that the main source of feedstock for the facility will be from crops in Western Canada and thank the Government of Alberta for their recognition of the project’s benefits to the agricultural industry and our collective greenhouse gas emissions reduction goals.” 

Sherri Evers, senior vice president sustainability, commercial development and product solutions, Imperial
Construction on the new facility is already underway at Imperial’s Strathcona refinery. The project is creating about 600 local construction jobs for Albertans and hundreds more through investments by business partners. Once the facility is completed, hundreds of farmers and workers in Alberta’s biofeedstock industry will enable the company to produce a fuel that helps reduce greenhouse gas emissions in the Canadian transportation sector.

“We are excited to see this investment being made in Alberta’s canola country. Local production of renewable fuels derived from locally grown canola provides an important market diversification opportunity right here in our own backyard that will benefit farmers, processors and the entire value chain in the province of Alberta.”

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