Understanding the Saskatchewan Value-Added Agriculture Incentive

May 8, 2018

McKercher LLP Agriculture and Agribusiness This past April the Government of Saskatchewan released its 2018-19 budget, which included the Saskatchewan Value-Added Agriculture Incentive (SVAI). In an effort to diversify Saskatchewan’s economy and stimulate growth of the Saskatchewan agriculture value-added supply chain, SAVI provides a 15% non-refundable tax credit on qualifying new capital expenditures until December 31, 2022. Qualifying projects will include new or existing value-added agriculture facilities that make a minimum capital investment of $10 million to expand productive capacity in eligible value-added agriculture activities (e.g. pea protein processing, canola seed crushing, oat milling, malt production and cannabis oil processing).  Importantly, for the purposes of SVAI, eligible value-added agriculture activities are defined as the physical transformation or upgrading of any raw or primary agricultural product or any agricultural by-product or waste into a new or upgraded product. The SVAI credit is claimed only after the facility is completed and has proven to have new or expanded value-added production with issuance of a certificate of eligibility. It is limited to:

  • 20% in year one after the facility begins operation
  • 30% in year two
  • 50% in year three

Unused tax credits can be carried forward for 10 years after the facility begins operations. To access the credit, potential applicants must first receive conditional approval from the Saskatchewan Ministry of Trade and Export Development. To receive conditional approval, it must be demonstrated that the project will meet the qualifying criteria.

About the Author: Christopher is a Partner practicing in the Firm’s Saskatoon office where he maintains a commercial transactions and project development practice focusing on Saskatchewan key economic sectors – energy, natural resources and agricultural.

About McKercher LLP: McKercher LLP is one of Saskatchewan’s oldest and largest law firms with offices in Saskatoon and Regina. Our deep roots and client-first philosophy have made our firm rank in the top 5 in Saskatchewan by Canadian Lawyer magazine (2017). Integrity, experience and capacity provide innovative solutions for our clients’ diverse legal issues and complex business transactions. This post is for information purposes only and should not be taken as legal opinions on any specific facts or circumstances.  Counsel should be consulted concerning your own situation and any specific legal questions you may have.

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