Alberta budget cuts funding for agriculture

Province looks to take smaller role in its own research, reduce staff and cancel programs formerly funded by carbon tax

The Alberta government plans to conduct less agriculture research as it reduces expenditures in the department.

The government outlined Oct. 24 a provincial budget that plans on cutting the agriculture and forestry ministry by $88 million, or about nine percent. It spent $967 million in 2018-19 and plans to spend $879 million in 2019-20.

Cuts are expected to reach a total of $145 million as the province anticipates spending $822 million in 2022-23.

The reductions are part of the Alberta budget that plans to cut operating expenses by 2.8 percent, or $1.4 billion, between 2018 and 2022, reducing funds to post-secondary education, energy, environment and parks, infrastructure and others. It will result in layoffs and not filling vacant positions in the civil service.

The budget is forecast to have a $8.7 billion deficit in 2019-20, though there are plans to get in the black with a $600 million surplus by 2022-23. It will increase spending in health and social services, as well as maintaining education spending, though not at a rate that funds enrolment growth.

Debt is forecast to reach $93 billion by 2023.

In the agriculture and forestry ministry, the primary agriculture division will be among the most heavily affected.

The division will see cuts of $7 million in 2019-20, moving to a total reduction of $26 million by 2022-23. It had a budget of $77 million in 2018-19, which will be reduced to $70 million in 2019-20 and eventually to $51 million by 2022-23.

Department officials said the primary agriculture division deals with production and research, as well as partnering with associations and universities.

The reductions will mean fewer staff, according to officials. The government will not fill vacant positions and potentially let staff go in later years, although details have yet to be determined.

Staffing levels at the Alberta Ag Info Centre have yet to be determined, which include specialists who help producers manage crops.

Agriculture Minister Devin Dreeshen said the province will enter consultations with farmers over the future of research.

He indicated that the government could reverse course if farmers said they wanted research done by the province, but many organizations have said they would like it to be led by farmers.

“It’s all up to the consultation over what’s the appropriate funding model,” he said. “We are committed to funding research that produces actual results.”

Tom Steve, general manager of the Alberta wheat and barley commissions, suggested the organization is OK with the reduction in research conducted by the ministry, only as long as it has input on the government’s priorities.

“I think overall in a restraint budget, we expected there would be some funding reductions in the ministry,” he said.

Steve said he’s looking forward to working with the government regarding consultations over setting research priorities and attracting private investment.

Lorne Dach, the NDP agriculture critic, said the cuts to the department are a kick in the pants to the industry and to workers who could get laid off.

“We don’t want to lose these scientists; we need them more than ever,” he said. “We are facing crop pests and clubroot, and we need these scientists to help solve these challenges.”

The ministry plans on streamlining its delivery of research grants.

It’s moving funds from its own research funding programs into the Canadian Agriculture Partnership program, a joint initiative by the federal and provincial government.

The move means funding will remain the same, but it will allow department staff to streamline how it allocates dollars.

The cuts include the processing, trade and intergovernmental relations division. The province is cutting $30 million to the division for 2019-20, though most of that will come through the elimination of the distillers program.

Delivery of crop insurance won’t change, and producers’ premiums won’t be affected.

In the budget, the estimate for crop insurance is $29 million less than it was last year. Despite the lower estimate, it will have no bearing on how much AFSC will pay out. The corporation can pay out more than what is estimated, depending on crop conditions.

“AFSC has a very strong balance sheet,” Dreeshen said. 

Steve said he is glad the province has maintained funding for business risk management programs.

The province plans to axe all agriculture programs that were once funded by the carbon tax. Applications for funding from those programs will be returned to producers.

The programs helped producers offset costs for installing solar panels and for upgrading irrigation equipment.

Greenhouse growers who paid the carbon tax in 2018, about $2.5 million, will see those funds returned.

Along with spending reductions, the province is implementing higher fees for some purchased goods.

Albertans can expect to pay $5 more for a carton of 200 cigarettes. Loose tobacco taxes will rise 3.75 cents. As well, fees for motor vehicle licences and land titles will rise.

Education property tax will remain the same, although the province is not indexing personal income tax brackets, a move that the opposition NDP says will result in higher taxes for Albertans.

“Every single Albertan was going to pay more in income tax,” said NDP leader Rachel Notley, suggesting the change in indexing will mean $600 million in additional income tax.

The province expects more revenue from corporations even though it plans to cut corporate taxes, as well as additional revenue from personal income tax as time progresses. It believes reducing corporate taxes will boost investment.

It expects bitumen resource revenue to increase in 2019-20, but fall for a couple of years before an expected rebound in 2022-23. Other resource revenue is expected to drop in 2019-20, but slowly increase in the following years.

Finance Minister Travis Toews said the province will review its transfer programs, in which dollars are sent to the federal government to help pay for national programs and to fund programs in so-called less wealthy “have-not” provinces.

In the budget, Alberta laid out three different scenarios that could affect revenue: a potential global recession, blocked market access and higher oil prices.

Alberta plans to introduce a new child and family benefit, a program that aims to help lower-income families. The program is an amalgamation of other initiatives brought by the former government.

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