Desperate times call for desperate measures, and Alberta’s United Conservative Government has been reduced to doing what market fundamentalists like Jason Kenney usually vow they’ll never contemplate: picking winners and losers.
Or, the way these things often seem to turn out, picking winners and discovering later that they’re actually losers.
The UCP announced yesterday it had picked a producer that promises to provide a peck of pea shoots and the like at an indoor farm in southeast Calgary. Many details are murky.
In addition to pea shoots, GoodLeaf Farms says it grows radishes, arugula, micro broccoli, baby spinach, and kale at its indoor farm in Guelph, Ont.
“The country’s largest commercial vertical farming company will build a 74,000-square-foot indoor farm in the city, after receiving a $2.73-million incentive to locate to Alberta,” the Kenney Government’s press release proudly proclaimed yesterday. “The company will create 50 jobs during construction and 70 permanent jobs upon start-up.”
The “incentive” to GoodLeaf comes out of a new “Investment and Growth Fund” set up by the government with a rather insignificant $10 million. The fund’s job, says the presser, will be “attracting well-established companies to Alberta.”
The brainiacs behind this effort to pick winners will find that $10 million won’t go very far to create jobs in the numbers the UCP is going to need to build up credibility with voters, but in the mean time they can spin up some optimistic press releases and give the impression of being busy.
Now, $2.73 million may seem like a lot to pay for 70 speculative, largely unskilled jobs that don’t actually exist yet in a business that may or may not be able to put down roots on the Prairies, but when you’re as anxious to prove you can create employment as Mr. Kenney and the UCP are, any old plan will probably do.
If it happens, the Calgary operation will more than double the size of the company’s current workforce, mostly in Ontario and Nova Scotia, judging from its corporate page on Linked-In. The company is privately held, so details about its revenue, operations, and relationships with sister companies are not particularly easy to come by.
But for sure it’s a better bet than the $1.3 billion Mr. Kenney sank into TC Energy, the former TransCanada Pipelines, to build that Keystone XL Pipeline to the Texas Gulf, the project U.S. President Joe Biden famously killed on his first day in office.
Readers may have thought the government was promising a lot more than 70 jobs. Indeed, the headline on the news release said, “Nearly 2,000 jobs created through investment in Alberta.” Turns out, however, that’s a rather speculative estimate based on four projects that will be financed by the investment fund, three of which will remain a secret until new press releases are approved. One might even say it’s fanciful.
“The Investment and Growth Fund helped to close this investment in a competitive global market,” Jobs Minister Doug Schweitzer bragged in yesterday’s news release.
Well, sort of. GoodLeaf said last February in a news release it would be using some of the $65 million McCain Foods Ltd. had invested in it to open an operation somewhere in Western Canada, which suggests its ambitions were more regional than planetary.
Naturally, yesterday’s news release also quoted Alberta’s new agriculture minister, Nate Horner, saying, in language that reminded me of my days as the Calgary Herald’s agriculture reporter back in the 1980s, “we will be looking to the agri-food sector to help lead Alberta’s economic recovery plan and spur growth, and this innovative project is a step in the right direction.”
That’ll be a tall order, even for an indoor food factory with some serious funding from McCain’s, if this is supposed to replace the jobs lost in the fossil fuel industry on Mr. Kenney’s watch.
Of course, this is not to say that the winner the UCP has picked will end up turning out like Newfoundland’s notorious hydroponic indoor cucumber grow-op in the 1980s – fondly remembered on the Rock as Premier Peckford’s Pickle Palace for the $13 million the province sank into the doomed operation dreamed up by the late Philip Sprung of Calgary.
But it will face some of the same competitive pressures as did the Mount Pearl pickle palace, which the CBC reported was undone when greenhouse-grown cukes from outside the province inundated the place and the expensive hydroponic cucumbers had to be sold off for half the cost of production. Cattle ended up eating the surplus.
As the Globe and Mail explained in its report on the McCain’s investment last spring, vertical farms compete with conventional horizontal ones, which are located outside in fields or in greenhouses, “where the awesome power of sunlight is free.”
What’s more, since some jurisdictions (no names) generate electricity principally from fossil fuels, this also increases the carbon footprint of vertical farms, the Globe added, noting that “water and fertilizer efficiencies touted by vertical farming enthusiasts are overstated … as are the savings from reduced transportation costs.”
On the other hand, GoodLeaf said in a news release yesterday that could produce fresh veggies locally in the winter, which might be an advantage if current supply-line problems persist. The company said it expects to produce more than a million pounds of leafy greens each year in Calgary.
Opposition NDP Economic Development Critic Deron Bilous observed yesterday that “it’s still not clear how the UCP’s new fund brought this company to Alberta, the application process, or how they were selected.”
“The government couldn’t even provide basic details such as how much capital investment or which other jurisdictions were being considered by the company,” he said.
“If the UCP was actually creating the right conditions to attract investment – or if their corporate tax cut was working as promised – this fund shouldn’t be needed. Based on today’s announcement, this looks like a slush fund for the UCP to give away more money to profitable corporations in backroom deals.”
The UCP needs to shine some light on how this fund works before they hand out any more cash, Mr. Bilous concluded.