Ottawa’s New Tax Break Aims to Boost Greenhouse Expansion — But May Not Lower Food Prices

Alberta greenhouse growers say a new federal tax incentive may make it easier for producers to expand operations, but they caution that the measure alone is unlikely to translate into lower food prices for consumers. The federal government announced this week that greenhouse operators who build or purchase new facilities will now be allowed to write off capital costs much faster, a significant change from previous rules that capped annual write-offs at 10 per cent.

Producers say the ability to depreciate major construction or equipment investments more quickly could improve cash-flow projections and strengthen business cases for large expansions. Michiel Verheul, president of the Alberta Greenhouse Growers Association (AGGA), told Radio-Canada that the new tax policy could help encourage new investment and expand the amount of Alberta-grown produce available in local stores. His organisation represents roughly 200 producers across the province. While the measure is welcome, he noted its limits: “It really helps incent these investment decisions … but it may not lower prices. That’s hard to predict.”

Growers stress that operating costs — not capital expenses — are the primary drivers of food prices, especially in Alberta’s harsh climate where year-round production is energy-intensive. Alberta producer Albert Kramer, who runs large commercial greenhouses near Medicine Hat, said growers face deep uncertainty tied to labour programs, energy prices and tight market conditions. Those factors make it difficult to commit to multimillion-dollar expansions, even with improved tax treatment. “I’m not sure it’s going to do anything, myself,” he said.

Modern greenhouses, such as Kramer’s expansive three-million-square-foot facility, require tens of millions of dollars to construct and rely heavily on natural gas and electricity. Although greenhouses received relief when Ottawa lifted the consumer carbon levy on natural gas used for heating, many operations still incur major power costs. Increasingly, growers are installing on-site gas-fired generators that produce heat, electricity and carbon dioxide — all fed back into the controlled environment to enhance plant growth.

Alberta’s greenhouse industry remains an important economic driver, particularly in the Medicine Hat–Redcliff region, long known as the greenhouse capital of the Prairies. Large agricultural producers operate about 230 hectares of active greenhouse space across the province — equivalent to 383 football fields — employing around 5,000 workers. Despite this footprint, Alberta and the rest of Canada remain net importers of fruits and vegetables, highlighting the country’s continued reliance on foreign supply chains.

The federal tax change is part of a suite of policies introduced by Prime Minister Mark Carney aimed at tackling food inflation and shoring up domestic food security. Alberta’s Agriculture and Irrigation Ministry says greenhouse expansion remains a provincial priority, but officials are still evaluating the impact of the new federal measure. “Reducing our reliance on imports and expanding local food production is essential for both affordability and food security,” ministry spokesperson Garrett Koehler said.

The province’s own Growing Greenhouses Program offers matching grants of up to $2 million to help producers expand, improve yields or increase energy efficiency. Nationally, the Canadian Federation of Agriculture welcomed Ottawa’s tax change, saying it sends a strong signal that government recognises the importance of supporting agricultural investment and long-term food security.