Key Crop-Growing Region Expands Canada’s Irrigation Push

(Bloomberg) -- A key Canadian crop-growing province plans to spend C$815 million ($620 million) to expand its irrigation infrastructure, joining a new nationwide drive to boost yields and exports.

Alberta said on Friday it was taking advantage of a Canada Infrastructure Bank program announced last week that offers C$1.5 billion in loans for “transformative irrigation infrastructure.” The national program is targeting 700,000 acres of farmland.

Agricultural irrigation is expected to increase yields and potentially exports in one of the world’s biggest grain producers, and enable some farmers to add higher-profit crops such as potatoes and sugar beets to their annual rotations. That, in turn, could attract food processors.

“It increases the different types of crops that can be grown and ultimately gives the farmers more return, but also attracting more value-added processing,” Devin Dreeshen, Alberta’s agriculture and forestry minister, said in a telephone interview. “It’s the biggest expansion that we’ve done in the province of Alberta, and we’re probably the highest irrigated province in the country.”

‘Actively Engaged’

Alberta’s plan includes replacing canals with pipelines to reduce water loss to evaporation and seepage, and constructing four off-stream reservoirs to increase available supplies. The effort is expected to bring water to an additional 200,000 acres.

“We are very pleased that the Canada Infrastructure Bank has agreed in principal to support this investment with a loan of C$407.5 million to the irrigation districts,” Alberta Premier Jason Kenney said at a press conference. “I understand that’s on a 35-year term at 1% interest.”

The rest of the project will be funded by the Alberta government and districts that already run irrigation systems.

For the CIB, the Alberta plan is just a start.

“We’re actively engaged on a number of projects,” said John Casola, chief investment officer for CIB, adding the bank is also working with Saskatchewan, another major farming province.

In July, Saskatchewan announced a C$4 billion irrigation plan that is expected to be built over the next 10 years and reach up to 500,000 acres of land. This would more than double the province’s irrigable land.

Boosting GDP

Alberta, a major cattle and crop producing province in the Canadian Prairies, currently has 1.7 million acres of irrigated land, the government said.

Irrigation can dramatically boost yields per acre for some crops. A 2015 study commissioned by the Alberta Irrigation Projects Association showed average annual net returns for spring wheat increased fivefold because of irrigation. The study also showed that each cubic meter of irrigated water generated roughly C$3 to the provincial gross domestic product.

After it’s completed in roughly four years, Alberta’s latest project is forecast to generate C$436 million annually to provincial GDP, the Alberta government said.

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