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Province promises up to $9.5 million in tax rebates for Hylife expansion

Hylife Ltd. will recoup some of the new tax generated from its recent expansions

Hylife Ltd. has joined the companies expecting to get a financial boost from their own tax revenue.

The province announced Sept. 14 that the pork giant will join the companies and projects singled out for TIF, or tax increment financing.

Governments most commonly turn to TIF to jump-start economic development and private sector investment by promising to return a share of the tax revenue generated by that capital investment. Alternately, governments might slate a part of that new tax revenue for improvements in a given area, for example, sidewalks or new infrastructure surrounding a TIF-supported project.

“The tax, pre-development, is still paid, not recoupable,” Premier Brian Pallister said at the Sept. 14 announcement in Neepawa. “The levy on improvement is incented by returning it to the proponent for reinvestment.

“Simply put, the idea is to incent the investment of private capital into our economy,” he added.

In the case of Hylife Ltd., the province has thrown TIF support behind the company’s aggressive $176-million expansion plan. The company wrapped up two years of expansion projects this year, president Claude Vielfaure announced in April, including a new feed mill in the Municipality of Killarney-Turtle Mountain and a 100,000-square-foot cutting floor expansion in their main Neepawa facility. The company is also expecting to complete four new hog barns in western Manitoba through the winter months.

The TIF support will be on top of the $2 million already provided under Growing Forward 2 for the expansion.

Hylife Ltd. president Claude Vielfaure.
photo: Alexis Stockford

“As a business in Manitoba and as a business that started in Manitoba, we’ve kept growing in Manitoba,” Vielfaure said, “but it’s so important to have a government that supports business, supports industry and supports rural Manitoba, and that’s what the government today has shown.”

About $105 million of the $176-million expansion went to the Neepawa upgrades, Vielfaure said. That facility now employs about 1,300 people.

Vielfaure says the company expects to start reaping the benefits from the expansion in the next few years.

“Obviously when you do these major expansions, there’s a startup time where you’re just making sure you’re tweaking everything, making sure things are working properly, and now we’re starting to work on getting the added value that we will get because of the investment we’ve done in Neepawa,” he said.

Pallister, as well as local government and provincial Minister of Agriculture Ralph Eichler praised the company for its growth, community involvement and job creation, something that last year earned it an Employer Awards for Newcomer Employment nod from the federal government. Immigration, Refugees and Citizenship Canada noted the company for its efforts in settling staff to the area from overseas through the temporary foreign worker and permanent sponsorship programs. The company has also been a regular name on Canadian Business’s 50 best-managed companies.

“Hylife, of course, has created spinoff opportunities of amazing proportions, really,” Pallister said, citing ongoing construction and maintenance jobs created by the company’s projects.

The announcement comes after similar announcements by the Pallister government. On Sept. 10, the province announced up to $11.95 million in TIF to the True North Square Public Plaza, including the residential tower and surrounding street, sidewalk and skywalk projects, in Winnipeg.

At the same time, the province promised TIF support to a planned residential tower connected to the Sutton Place Hotel.

Municipal Relations Minister Jeff Wharton argued that TIF projects, “protect taxpayers against the risk of losses when developments are delayed or anticipated tax revenues do not materialize,” according to a Sept. 10 release.

In 2016, CBC reported on concerns that the City of Winnipeg was leaning too heavy on TIF and tying up too much future tax revenue to bolster projects at the time.

Pallister dismissed suggestions that the province’s current spate of TIF announcement might run into similar concerns.

“This is not an uncommonly used tool and it’s one that we’re using carefully to make sure that we’re incenting investments in sustainable things that will stay here, we hope,” he said.

Similar announcements have so far largely been limited to projects in Winnipeg, although Pallister said there would be more support for rural-based projects in the coming weeks.

About the author

Reporter

Alexis Stockford is a journalist and photographer with the Manitoba Co-operator. She previously reported with the Morden Times and was news editor of  campus newspaper, The Omega, at Thompson Rivers University in Kamloops, BC. She grew up on a mixed farm near Miami, Man.

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