Smoky River Regional Economic Development – canola crushing

Dan Dibbelt
Smoky River Regional Economic Development

Smoky River Regional Economic Development is investing in a business case to develop a canola crushing facility in the region.

It is a relatively expensive venture – $50,000, but the committee feels it is money well spent. That may come as a surprise to some people, especially those who remember the Sexsmith Canola plant.

It was a few decades back that a canola crushing facility was opened in Sexsmith. In 1973, Northern Lite Canola, a cooperative proposal to build a canola crushing plant, intended to improve market access for northern canola producers was backed by the Alberta Government.

The plant was opened in 1977, 40 years ago. That plant went into receivership in 1985 with major farmer investor losses and about $34 million owed the Alberta Government. Undeterred, the government of the time invested another $8.6 million only to have the facility shut for good in 1994.

In light of this, some may question the sensibility of pursuing a business case when the Sexsmith plant failed. There are; however, considerable differences between the 1997 model and the 2017 model.

A common argument against any economic development project is “we have tried that before and it didn’t work.” There are a couple different rebuttals for that argument.

First, arguing that it didn’t work assumes that all things are equal. The reality is that almost everything has been tried before and based on that we should do nothing. We have had Alfalfa, Canola, and red meat facilities that didn’t work.

Several large retailers, Eaton’s, Woodward’s and Target also didn’t work. And yet, some have been around for decades and continue to work quite well.

The success of a company is based on everything from marketing, adjusting product to new demands and good management, to name a few. Walmart is perhaps the best example of a success story.

To argue that we tried that before is to assume nothing has changed. The world is different today. Who knows, perhaps with different management, or a different marketing strategy or a different commodity market may have changed the outcome.

The second consideration is that while it is true the Sexsmith plant closed, it did in fact employ people and move product for some 17 years. During that time, employees bought houses, municipal taxes were paid.

Falher Alfalfa is no longer with us either. But they were a great local employer of many jobs for a number of years and while it is unfortunate they closed it would be hard to argue they did not add value to the region.

But perhaps one of the best reasons for the Smoky region to pursue the possibility of a canola crushing facility, is simply that there is international interest in this region.

About two years ago, the Peace Region Economic Development Alliance (PREDA) brought a company from India to the Smoky region. This company was looking at setting up a plant to crush canola for export back to India.

They were attracted to the Smoky region because this region produces the most canola in northern Alberta. Add to this the region has excellent transportation corridors, both in rail and road, and we have a track record in supporting agricultural ventures, making us a pretty attractive to foreign investors.

While things looked promising at the time, a lack of available property at the right price and a change in the provincial government slowed down the interest from the specific company.

Times have changed, however, and presently there are three viable properties that could suit a canola crushing facility. Prices are also more affordable than two years ago. And now there is also some interest from Chinese companies.

So, if all these companies are interested, why are we doing the business case for them? The answer is quite simple. We are not the only region they are looking at and we need to build a case showing them why they should pick us over the rest.

We need to show these international companies that they can make a profit here. We need to show them they can access employees here and we need to show them we have the canola they need to fill their needs.

Or we can do nothing and hope they pick us. All that being said there are no guarantees. We can do all this work and they may still go somewhere else. But by doing our homework we are increasing our chances.

Additionally, the business case we develop will gather a lot of useful information we can use for other potential value-added opportunities.

And yet with all our work, even if we are successful in attracting an international company we can’t guarantee their longevity, no more than we can guarantee Sears’ longevity.

What we can guarantee is that SRRED is trying to bring economic development to the region. In economic development there are no guarantees, there is only effort and with that effort some successes. Let’s hope this is one of those successes.

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