Cattle feeders fear tax

Photo: The Canadian Press

Feedlot operators in the heart of Canada's largest cattle-producing region are warning that a municipal tax introduced this past spring will result in more cattle feeders going out of business, days after one of them announced it would close.

Rick Paskal, president of Van Raay Paskal Farms in Picture Butte, Alta., and seven other operators with capacity to fatten about 250,000 cattle for slaughter have also launched a lawsuit against Lethbridge County demanding the reversal of a $3-per-head tax charged to operations of at least 150 beef cattle.

They say the tax, when added to other increasing costs and falling beef prices, will result in more feedlots shutting down over the coming months.

"We're fighting for our survival," said Paskal.

"We're right now at a $5.50-to-$6 per head disadvantage feeding cattle here in Canada versus the United States. You add $3 on that, that's $8.50 to $9. ... The cattle will all go south."

Alberta produces 69 per cent of Canada's annual fed cattle output — about 1.8 million head — from about 150 feedlots, according to the Alberta Cattle Feeders Association. Paskal says feedlots in Lethbridge County have the capacity to deliver 500,000 of those beef cows to market.

Western Feedlots, one of Canada's largest cattle feeders, said last week that it plans to close its three feedlot operations in Alberta by early next year due to poor financial prospects. While none of the company's feedlot operations are in Lethbridge County, Paskal said that announcement served as a wake-up call nonetheless for the cattle feeding industry.

Paskal said Western's closure would result in the loss of 100,000 head of cattle-finishing capacity, possibly leaving the industry unable to fill the needs of Alberta's two industrial scale beef-packing plants.

He said recent moves by the provincial government, such as hikes to minimum wage, pending carbon taxes and requiring agricultural businesses to enrol employees under the Workers' Compensation Act, are all expected to raise costs, compounding the problem for the cattle feeding sector.