More details regarding a large agriculture infrastructure project in Regina were released on Monday by Federated Co-operatives Limited (FCL).
The company announced its plans to create an integrated agriculture complex, which will be located north of the Co-op refinery in Regina.
The new complex will house a $360 million canola crushing plant, in partnership with AGT Foods, and the nation’s largest renewable diesel facility.
The partnership with AGT is a 51-49 per cent split with FCL holding the majority ownership stake.
“This is a tremendous opportunity for Saskatchewan and for FCL and AGT Foods that will bolster the sustainability and economic goals of these companies and the province,” Premier Scott Moe said in a statement during Monday’s announcement.
“Our province has the food, fertilizer and fuel the world needs, including renewable energy from canola grown and processed here, which speaks to the heart of our plan for economic recovery and growth as we work to build an independent, strong and sustainable Saskatchewan.”
Renewable diesel production at the IAC represents a nearly $2 billion investment for the province.
The government also hopes the canola crushing facility will help in surpassing their 2030 Growth Plan goal of processing 75 per cent of canola grown in Saskatchewan.
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FCL said the canola crushing facility will supply approximately 50 per cent of the feedstock required for a 15,000-barrel-per-day renewable diesel plant, with the remainder of the supply contracted from other canola crush facilities.
According to the government, the complex will have direct and indirect economic benefits of about $4.5 billion.
“We know the synergies between transportation fuel production and agriculture will play a vital role in Western Canada’s transition to the low carbon economy,” stated FCL CEO Scott Banda.
“We believe our Co-op Retailing System is well-positioned to integrate and capture the full agricultural value-chain in the production of fuel and value-added products. We are excited about our partnership with AGT and ultimately what this announcement means for value-added agriculture in our province.”
It’s expected to create over 2,700 construction jobs and could potentially create up to 300 permanent operating jobs, according to FCL.
“This is a very exciting announcement, and I am pleased to see FCL and AGT Foods continuing to invest in our city and our province,” said Regina Mayor Sandra Masters. “This investment will provide Regina and area with new value-added opportunities, assist the city’s long-term sustainability goals and reinforce Regina’s position a global leader in agriculture.”
Jason Childs, an associate professor of economics at the University of Saskatchewan, is encouraged by the move.
“I think it sends a really clear and exciting signal that a big player in the Saskatchewan industrial landscape is taking the change away from fossil fuels quite seriously and making some pretty big investments in that direction,” said Childs.
While he thinks there are good things to come from the long-term economic potential of the deal, he has concerns with the use of corn for ethanol in the United States.
“There is some degree to which the ethanol production which was really ramping up in the United States based primarily on corn started to compete heavily for that same input and drive up the price of corn for other uses,” explained Childs.
“There is a risk that we could see canola driven up in the food side of things if more and more canola is diverted into diesel and renewable diesel.”