Strengthening Alberta’s Agricultural Backbone Through the Agri-Processing Investment Tax Credit

Agriculture has always been a cornerstone of Alberta’s economy and identity. Across Canada, the sector sustains rural communities, strengthens food security, and drives economic growth. In Alberta specifically, agriculture contributed $10.3 billion to GDP in 2023 and employed 83,000 Albertans. Beyond primary production, agri-processing has emerged as a rapidly expanding industry, with the Ministry of Agriculture and Irrigation attracting more than $2.8 billion in investments over the past two years which is six times higher than historical averages, and creating over 1,800 jobs in the province.

Given the sector’s significance, governments at both the provincial and federal levels have long used tax credits to stimulate agricultural growth, encourage innovation, and, inevitably, win political support. The most recent 2025 Alberta mandate letters underscore this strategy, with tax credits once again positioned as central policy tools to boost agriculture and related industries.

Introduced in 2023 and simplified in late 2024, the Agri-Processing Investment Tax Credit is one of Alberta’s most prominent supports for the agricultural industry. The program has been hailed as a highly successful initiative, so much so that the government is now looking to replicate its model for the value-added forestry sector.

When designing the program, Alberta examined similar incentives in 15 competing jurisdictions across Canada and the United States. The goal was clear: make Alberta a top destination for value-added agricultural projects and capture a larger share of the growing global demand for processed and packaged foods. That demand is projected to rise by up to 56% by 2050, offering enormous opportunities for agri-food exporters.

This is not new territory for Alberta. In 2021, food manufacturing sales reached $20.1 billion, making it the largest manufacturing industry in the province and representing nearly 24% of all provincial manufacturing sales. Building on this foundation, the tax credit provides targeted incentives to further accelerate growth.

The APITC is structured as a 12 % non-refundable, non-transferable tax credit applicable to large capital investments in value-added agri-processing projects in Alberta. 

Agri-processors can receive a maximum credit per project of up to $175 million. Once certified, the credit can be claimed over 10 years on Alberta corporate taxes. Claimants can receive 20% of the credit in year 1, 30% in year 2, and 50% in year 3.  

The eligibility criteria for the APITC is laid out in the Investing in a Diversified Alberta Economy Act and the Agri-Processing Investment Tax Credit Regulation.

Eligibility

Eligible Applicants

1.      Corporations: Must be incorporated, registered, or continued under Alberta’s Business Corporations Act

2.      Registered Partnerships (excluding LLPs): Must file a partnership agreement and meet disclosure requirements

3.      Entities in unregistered partnerships or joint ventures are not eligible as such

4.      All applicants must satisfy the conditions in the enabling statute and regulation

Eligible Projects

Projects must:

·         Be located in Alberta

·         Involve new capital expenditures of at least $10 million

·         Either construct a new value-added agri-processing facility or expand an existing one to increase productive capacity

·         Produce a new or upgraded product via physical transformation or upgrading of agricultural inputs or by-products

·         Use capital expenditures made on or after February 7, 2023

Excluded are:

·         Projects that do only cleaning, bagging, storing, sorting, handling without transformation

·         Primary agriculture activities (greenhouses, crop or livestock operations)

·         Certain capital costs such as vehicles, office equipment, furnishing, intellectual property, and non-capital leases.

·         Expenditures from non-arm’s length transactions, unless justified to the Minister’s satisfaction.

·         Capital spending already funded by other government grants or subsidies

Application & Claim Timeline

1.      Submit proposed investment plan, cost estimate, and supporting documents (including partnership disclosure)

2.      Submit status updates every 180 days until completion.

3.      Upon project completion, apply for the APITC certificate by submitting compliance reports, production baseline vs follow-up (for expansions), and possible appraisals

4.      Once certified, the credit may be claimed over ten years, subject to the year-by-year limits (20/30/50% in the first three years). 

Conclusion 

The Agri-Processing Investment Tax Credit reflects Alberta’s long-standing recognition that agriculture is not only an economic driver but also a strategic sector tied to global food security and competitiveness. By targeting large-scale, value-added projects, the program encourages businesses to invest, expand, and innovate within the province rather than elsewhere. Its careful design ensures that the incentive attracts meaningful, long-term capital rather than short-term activity.

As global demand for food rises sharply in the coming decades, Alberta is positioning itself to lead. With a robust agricultural base, a growing processing industry, and one of the most generous agri-investment tax frameworks in North America, the province is laying the groundwork for a sustainable and globally competitive future in food and agri-processing. The APITC is more than a tax measure; it is a cornerstone of Alberta’s broader strategy to diversify its economy and secure prosperity for generations to come.