Agriculture Canada spending in this fiscal year will be 44 percent
above original estimates and the highest in four years, a senior
departmental official said last week.
In early December, Parliament approved additional spending authority of
$687.3 million for the department in the 2002-03 fiscal year, bringing
total spending approved so far to $2.5 billion.
Bruce Deacon, assistant deputy agriculture minister for corporate
management, told the House of Commons agriculture committee that the
department will be asking for another $100 million next spring.
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“The total for this year will exceed $2.6 billion,” he said. “That is
higher than last year and will be a consecutive increase every year for
the last four years.”
The government’s original budget for the department was $1.8 billion.
Deacon told MPs that the largest part of the increase was $544.7
million toward the government’s $600 million promise of transition
money this year.
The next supplementary estimate, planned for March, will include
authorization for the final $55 million in the government’s first $600
million payment that will be deposited in farmers’ Net Income
Stabilization Accounts through the autumn and winter. Another $600
million is to be sent out next year.
Meanwhile, the department’s assistant deputy in charge of farm
financial programs said Ottawa and the prairie provinces are working
hard to figure out how the crop insurance programs will cope with the
possibility of extended drought.
Doug Hedley told MPs that officials are scrambling to project how much
premiums will have to rise next year, particularly in Saskatchewan and
Alberta.
“We don’t know yet how much premiums will go up, but they will go up,”
he said in a later interview. “They will go up because this year is
creating deficits in two of the plans and because premiums reflect the
value of commodities and prices are going up.”
He said those complaining about the prospect of higher crop insurance
premiums in Saskatchewan should keep in mind that “current levels of
premiums, this is total premium in Saskatchewan crop insurance, are
some of the lowest on record.”
Hedley said federal estimates are that Saskatchewan’s crop insurance
fund will end the 2002-03 fiscal year March 31 at least $920 million in
deficit. Alberta’s year-end deficit is projected at $276 million “but
we are checking that number. It may be too high.”
Hedley said there is no danger of crop insurance insolvency because a
reinsurance program that covers deficits has no limit.
Still, there is concern that several more drought years could follow
and sink the program deeper into debt.
Ottawa and the provinces “are looking at what happens if we run into
one, two, three years. That work takes time in terms of the actuarial
work and the experience that we’ve had this year.”
