BRUDENELL, P.E.I. – In a gesture many provinces consider a breakthrough in federal-provincial agricultural relations, Ottawa has agreed to consider complaints from key agricultural provinces that they often cannot afford to pay their share of national programs when the farm economy is on the skids.
Saskatchewan, Manitoba and Prince Edward Island have led the charge in complaining for years that a rigid formula requiring provinces to pay 40 percent of program costs unduly hurts more agriculturally dependent provinces already reeling because of a bad farm economy.
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“We need to have a political discussion about what provinces can really afford,” P.E.I. minister Kevin MacAdam said Sept. 21 as ministers met in their annual conference.
“It’s a discussion we need to have that the federal government has refused to consider for years.”
Within hours, he got his wish.
Rookie federal agriculture minister Andy Mitchell promised to consider provincial complaints at a special ministers-only meeting, likely to be held in Toronto by the end of October.
“What I said to the provinces at this meeting was, ‘look, whenever we have discussions, they are always getting back to the issue of affordability. Rather than having this discussion over and over again, let’s just sit down and talk about the overall issue of affordability and what we all mean by that.’ “
Provincial ministers were thrilled.
“That’s a very open perspective to bring to a national agenda,” MacAdam said.
He saw it as part of Mitchell’s promise to be more flexible than his predecessors when dealing with the provinces.
Saskatchewan agriculture minister Mark Wartman felt that after years, the provinces were making some progress in puncturing Ottawa’s insistence that since agriculture is a shared constitutional jurisdiction, provinces should pay a fixed share of the costs.
“The question is how, with our limited fiscal capacity, can we provide the support needed for our farmers? I think Mr. Mitchell heard us on that. He wants to carry that forward.”
Saskatchewan has suggested that a spending cap be included in national agricultural programming to ensure that no province pays more than three times the provincial average per capita spending.
The province estimates that while the average provincial per capita spending on farm programs was $67.15 in 2003-04, Saskatchewan paid $341.23 for each provincial resident, more than five times as much as the national average.
(See Ottawa may reconsider, page 2)
A cap as suggested by Saskatchewan would have reduced the provincial requirement to $201.44 per person, with the federal government picking up the rest.
Discussions in Toronto are not likely to be as specific as a new funding formula. They will more generally consider whether the provinces have a legitimate complaint that they cannot afford to pay their share, to the detriment of their producers.
Rich versus poor
Wartman said it is particularly difficult in Saskatchewan, whose farmers see their counterparts in Alberta being fully funded by an oil-rich government: “We don’t want to pro-rate CAIS (Canadian Agricultural Income Stabilization) payments but it is difficult.”
Mitchell promised to be flexible.
“It comes down to ministers saying ‘this is what we are trying to achieve for producers, for the industry,’ ” he said.
“We all understand what we need to do. Let’s have a discussion about how that will play out in our individual provinces and regions and let’s make it the best possible by structuring it in a way that responds best to provincial or regional issues. That’s what it’s all about.”
However, even if the federal minister is convinced by the provinces, he still would have to convince federal finance minister Ralph Goodale, who was agriculture minister a decade ago when the 60-40 cost-share formula was introduced.
Goodale recently said he sees no reason to change the arrangement.
