Federal finance minister Ralph Goodale has a message for premiers who have been insisting BSE compensation should be a federal responsibility because it is a trade-related crisis.
They should be careful about undermining the federal-provincial funding arrangements in place or risk facing even higher spending demands.
“I suppose if one were to say, ‘BSE should be all federal,’ it would naturally be a tendency to look around and say, ‘well what would normally then be all provincial’ and one might say, ‘well maybe crop insurance will fall into that category,’ ” Goodale said Sept. 9 after a speech on federal finances at the National Press Club in Ottawa.
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“We know we are likely to have a pretty big draw on the crop insurance resources this year.”
After a Sept. 2 meeting in Toronto, a number of provincial premiers argued that while their governments will support the provincial cattle industry, the federal government has the major obligation to inject money because the main problem is a closed U.S. border and international trade is a federal responsibility under the constitution.
Goodale, a former federal agriculture minister, said the decade-old formula that assigns 60 percent of funding most agriculture safety net programs to Ottawa and 40 percent to the provinces serves Canada well. Agriculture is a constitutionally shared jurisdiction in Canada.
“When you begin to divide up the nature of the problem and assign it off to different levels of government, you very often create strange anomalies and distortions that were not intended,” he said. “I think we’re better off when dealing with these things to pool our will and our resources to try to arrive at partnership solutions. The 60-40 arrangement has been in place for some time.”
But Goodale, while promising federal money will be made available for BSE compensation and provinces will be expected to pay their part, also acknowledged that some provinces will have difficulty meeting their obligations for new spending.
He said agreements require “flexibility to try to ensure that the programs work, that they can be in place as quickly as possible and that money gets into the hands of farmers where it’s intended to go.”
Several times in a speech talking about a better-than-expected performance by the Canadian economy this year that will produce higher government revenues, the finance minister noted that agriculture has been hit hard by BSE and special financial provisions will have to be made to deal with it.
