Alberta budget means more cuts for agriculture

More layoffs are expected, but the government also intends to get aggressive with attracting investment to the industry

As the Alberta government slashes funding and jobs in its agriculture department, it is also pledging to attract investment to the sector.

Revealing details in its budget Feb. 26, the government said it wants to attract $1.4 billion over four years to the industry, supporting 2,000 new jobs in canola processing, the pork industry, plant protein, greenhouses, food processing, the malt industry, agri-technology, and other emerging sectors.

The pledge is part of the government’s new value-added strategy, in which it hopes corporate tax cuts, as well as advocacy, will lure investors.

However, it comes at a time when the province continues to cut department expenses, arguing the province must get its fiscal house in order as the economy lags.

The agriculture and forestry department is seeing a cut of about $538 million, although the bulk of that was done by completely axing the wildfire pre-suppression and response program, which had cost roughly $485 million.

The primary agriculture division is slated to see a $20 million cut. It budgeted roughly $93 million in 2019-20 and its estimate for 2020-21 is $73 million.

The agriculture and forestry department expects 277 full-time-equivalent job losses. It isn’t clear which divisions will see the most job reductions. This comes after 50 jobs were cut in the department last year.

As well, the Agriculture Financial Services Corp. expects 48 full-time-equivalent job losses. There will be 125 full-time-equivalent job cuts at Alberta Innovates, which contributes to agriculture research.

The government said most of the losses will be done by not refilling vacant positions as employees retire.

Dave Bishop, chair of the Alberta Barley Commission, said he hopes the department keeps extension employees, but the commission will have to wait and see what the fallout is before commenting further.

NDP agriculture critic Lorne Dach said the cuts show the province isn’t advocating for the industry. The reductions in the department are astronomical, he said.

“What in the world is going on with that ministry? He (the minister) has been a total non-starter as an advocate for agriculture,” Dach said.

Overall, the province anticipates a $6.8 billion deficit, but plans to eventually post a surplus in 2022-23. Provincial debt is expected to grow to $95.6 billion this year.

The budget paints an optimistic picture for the future of Alberta’s finances, even though markets remain volatile.

Finance Minister Travis Toews said the government expects economic growth in the coming years, anticipating more pipelines will come on line, higher oil prices, increased investment in the energy sector and housing, more employment and more tax revenue.

Toews said the province is prepared to cut further if the rosy economic picture doesn’t pan out.

“When you take a look at our underlying assumptions, they aren’t overly optimistic,” he said. “They are cautious but credible.”

Bishop said he supports the cuts, suggesting fiscal responsibility is needed.

As for farmer research, it plans on remaining the same before the government introduces a new model.

The province will commit $37 million to farmer research this coming fiscal year. Of that total, $7 million will come from the Canadian Agricultural Partnership program, $10 million will be for external organizations and $20 million will be spent within the department.

The province is expected to launch a new research funding model that takes farmers’ priorities into account.

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

As for the value-added strategy, the province hopes there will be 280 value-added agriculture products developed by 2020-21 expects that number to grow to 310 by 2022-23.

It expects $840 million in investment will be leveraged in rural businesses and agribusinesses, facilitated through AFSC. By 2022-23, it expects that figure to be $925 million.

Included in the budget is $2 million for protein fractionation equipment at the Food Processing Centre in Leduc, Alta. It’s part of the province’s $6.4 billion capital plan.

Municipalities can expect cuts to the Municipal Sustainability Initiative grants program, which is used for new infrastructure builds and maintenance. As well, there will be an increase of 3.4 percent in education property taxes.

Barry Morishita, president of the Alberta Urban Municipalities Association, said the increase in education property tax isn’t appropriate, given municipal budgets are stressed as it is.

On top of that, many counties have been dealing with unpaid taxes from oil and gas companies.

Al Kemmere, president of Rural Municipalities of Alberta, said the organization doesn’t want the province to further download costs on to rural communities.

“They are elected to balance the budget, but let’s not shift that balancing from their ledger to ours,” he said.

Toews continued his push for the federal government to rebate Alberta $2.4 billion through the Fiscal Stabilization Program. He argued the province has made significant contributions to the federal program, yet he said the federal government has introduced harmful policies.

“There is a lot of unrest,” he said. “The federal government has been enacting policies that aren’t in the best interest of the people of this province and this country. The frustration is high and I share that.”

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