Farm Debt at Record Highs

WORKERS’ COMP oIl LEASe WOES ClAImS JUMP SET NEW RECORD But reporting of workplace More and more companies aren’t injuries can be used to make paying their rent — or their municipal farms more safe » PG 3 taxes » PG 2 Publications Mail Agreement # 40069240 Volume 13, number 20 S e p tember 26, 2016 It’s been perfect conditions Farm debt at record for clubroot Wet conditions not only increase spore highs — but top counts but may also favour development of strains able to overcome resistant varieties lender not worried While FCC says most farmers can handle their debt load, By ALEXIS KIENLEN AF STAFF financial expert Merle Good says some are ‘robbing Peter to pay Paul’ his year’s wet conditions may leave a nasty legacy — reality check will you pass? more clubroot infestation By JENNIFER BLAIR T AF STAFF and more strains of the pathogen able to overcome resistant varieties. arm debt has hit a record high, bringing back Worried your “In the years where there is some unpleasant memories of the 1980s debt more wet weather, we expect to F crisis. debt is too high? have more severe symptoms and But we’re not there yet, said farm business expert more widespread infestation,” Merle Good. said Stephen Strelkov, a Univer- “In 1980, we had huge inflation and huge inter- Take this test sity of Alberta professor of plant est rates,” said Good, a longtime tax specialist with $ pathology who has become one the provincial government who now runs a private of the world’s top experts on the consulting business. step 1. Add up your operating loan, soil-borne disease. “In the ’80s, people were selling their entire farm accounts payable, and cash “In cases where a susceptible base and leaving agriculture. The balance sheets variety is being grown or a new today are much better than they were back then.” advances at year’s end. strain of pathogen has emerged, As of Dec. 31, 2015, Canadian farmers had $86.8 we would expect there to be billion in total debt, Statistics Canada figures show. Add up unsold inventory, accounts more symptoms showing up In a report released earlier this month, Farm Credit step 2. this year.” Canada (FCC) projected that farm debt will increase receivable, and pre-purchased The clubroot pathogen is most by five per cent in 2016 and another three per cent prevalent around Edmonton, has 2017, hitting $93.2 billion this year and $95.4 billion inputs. also moved into the Red Deer and next year. Westlock areas, and is spreading Divide the first number (liabilities) by about 30 kilometres each year. step 3. In the most infected fields, there by the second (assets). are 10 million spores in a gram “I can look at some people’s books and of soil. say, ‘You didn’t make the payment. Your } If the first number is 50 per cent SEE CLUBROOT page 7 operating loans made your payment.’” RESULt higher than the second, ‘you’ve got to make some changes.’ MerlE GooD But farm income has been keeping pace with farm debt, making the increased level of debt affordable, said J.P. Gervais, FCC’s chief agricultural economist. “We say with confidence that farmers are in a strong position to meet their financial obligations,” said Gervais. “We think that we are going to be able to ride the wave of strong income a number of additional years. We know agriculture is a SEE FARM DEBT } page 6 Poor ProsPects Fusarium on the rise } PaGe 24 2 news » inside this week sepTember 26, 2016 • alberTAFARMEXPRESs.CA inside » livestock crops columnists THE BATTLE HOG PRODUCERS TAKING THE ROAD brenda schoepp NEVER ENDS FACE ANOTHER DIP LESS TRAVELLED There are many facTors aT play in The currenT beef markeT 5 The effort to keep invasive mussels out of alberta’s waterways ramped up Gord Gilmour 28 Grain prices are down and ThaT means producTion is risinG 4 4-H ALBERTA’S BIG BIRTHDAY BASH sylvain charlebois it all started 100 years ago prices down sharply in the last There’s always a new wonder monsanTo’s Tarnished with the founding of the two months, and the future crop coming along — some brand won’T be missed 33 olds Junior pig club 46 outlook is challenging 12 flop, but others pay off nicely 17 Oil lease defaults hit new record Landowner compensation claims more than doubled last year and have already doubled again this year a grand total of 1,501 applications. “there are many counties that BY JENNIFER BLAIR the amount recommended for have delinquent accounts, either AF stAFF payment to Aug. 31 was $1.5 mil- from companies becoming insol- lion so far, and we expect that that vent or companies choosing not to or the second year in a row, will probably balloon.” pay their taxes at this time.” the number of claims against the surface Rights Board has While the association doesn’t F oil companies defaulting on changed its processes to deal with yet have an updated number for rental agreements has smashed the huge influx of new applica- the amount of outstanding tax records. tions it has received so far this year, payments, “both small and large Under section 36 of the surface added Hawranik. counties are feeling the pain,” said Rights Act, landowners can apply “We’ve taken staff from other Kemmere, adding municipalities for compensation from the pro- areas, and a little more than half still have to pay the provincial edu- vincial government if an oil com- our staff are processing section cation property tax, regardless if pany hasn’t paid their surface 36 applications to try to keep up,” they’re owed tax money. rental lease. From 2003 to 2014, he said. “For repeat applications, “We’ve got one municipality the board has received an average we’ve streamlined the process to A record number of oil companies aren’t paying their rent to landowners, that’s only about 3,500 people, of 360 applications and paid out try to keep up, and our time has nor the taxes they owe to municipalities. PHOTo: THINKSTOCK and it’s got a situation where it has $550,000 to landowners — even come down from about six months about $300,000 to $400,000 from during the 2007 downturn. on average to about three months operations for the Canadian Asso- And for many companies, one company alone in taxes that Last year, “that changed,” said average processing time. ciation of Petroleum Producers. “there’s not a lot of choice.” aren’t being paid,” he said. Gerald Hawranik, chair of the sur- “In terms of new applications, “We’re really in the depths of one “this is really economic capitu- “that’s a big piece of its bud- face Rights Board, which handles we’ve brought that down from of the most substantive downturns lation,” said Herald. “You’re see- get all of a sudden, and it’s going the claims. about eight months to about six in several decades, not just for our ing companies unable to fulfil to be carried by the balance of “In 2015, we received a total of months.” sector but the whole Alberta econ- their obligations, not unwilling to. the municipality one way or the 764 applications under section the board is bracing itself for omy,” said Herald. “We’re really “they’re making calls about other.” 36, which is more than double even more claims. seeing a lot of indicators that are paying their people and paying s o m e c o m p a n i e s h a v e what we’d normally get — and we “It’s really accelerated,” said trumpeting how significant this their light bill and paying their approached their local municipali- recommended about $1.7 million Hawranik. “If we were to process downturn is compared to others. obligations. And for any business ties for a reduction in their taxes, for payment, which is about three all 1,501 applications just from It is one of the worst of the past owner, that’s a terribly difficult but for the most part, the munici- times as much as we normally the first eight months, that would century.” place to be in.” palities “aren’t willing to go down would,” said Hawranik. roughly come out to $2.5 million to the impacts are “reverberating But it’s having a trickle-down that road.” And in the first eight months of $3 million. across the province,” he said, and effect on municipalities across “We have an open heart to the 2016, the number of claims “accel- “When you think about the total oil companies of all sizes are strug- Alberta, said Al Kemmere, presi- challenges that the industry is erated even further.” budget of the province at this point, gling to adjust their business mod- dent of the Alberta Association facing, but it’s a provincial issue “From Jan. 1 to Aug. 31, we’ve it’s not a lot, but it’s escalating.” els to make it work. of Municipal Districts and Coun- where many people are facing the opened 1,051 files under section “For any business that’s had ties. same challenges,” said Kemmere. 36, and we’ve received an addi- ‘economic capitulation’ more than half of its revenue evap- “With the infrastructure that’s “I hope we can find some kind tional 450 applications that are in the recent influx of claims shows orate, that creates a lot of struggle,” there from oil and gas, there is a of resolution for this so we don’t the queue for file opening,” he said, just how hard oil companies are said Herald.

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