Federal agriculture minister Andy Mitchell calls it the crux of the debate over Canada’s farm safety net system: can governments afford to allocate enough money to pay the bills?
Last week, federal and provincial agriculture ministers met in Ottawa and the issue of affordability was never far from their discussions.
“Affordability was the word that was used the most over the past two days on a number of fronts,” Ontario minister Steve Peters said in a March 3 interview.
“Affordability is a real issue for a number of provinces and it certainly is for Ontario.”
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Mitchell said it has been a perennial part of federal-provincial negotiations, although it has not always been officially recognized in Ottawa as a legitimate provincial complaint.
“My view is, let’s have it up front, let’s not pretend it doesn’t exist, let’s talk about it,” Mitchell said March 4. “This is the crux of the issue. Can governments afford programs?”
But last week’s meeting, originally scheduled to deal almost exclusively with the affordability issue, made little progress as the talks were sidetracked by the BSE-closed border and the issue of what to do about the farmer deposit in the Canadian Agricultural Income Stabilization program.
“We have made some progress in the discussion but there is nothing concrete yet,” said Saskatchewan minister Mark Wartman, one of the key advocates of a recognition that not all provinces have the same fiscal capacity to pay the 40 percent share of program costs.
“We would have to amend the CAIS formula and that takes time.”
It also takes broad agreement of Ottawa and at least seven provinces, and that is not yet in sight.
Saskatchewan is circulating a revision of an earlier proposal that once provincial farm payments exceed three times the national average per capita provincial spending on farm programs, Ottawa’s share would rise above 60 percent in that province.
“What we’re trying to get in place, despite the fact there have been some difficult years, is a program that is workable and stable so we don’t continually need to find unexpected funding,” said Wartman. “It is a huge task but we think we’re on the right track.”
Manitoba minister Rosann Wowchuk said part of the discussion is whether CAIS, with its 60-40 cost sharing formula, should be a vehicle for emergency aid.
“Is there a need to deal with crises like we are going through now outside the CAIS,” she asked outside the meeting.
“Those are the things we need to consider.”
Ministers will talk about the affordability issue again when they meet in July for their annual summer meeting. In fact, the issue may be getting more complicated for Ottawa.
Initially, Saskatchewan, Manitoba and Prince Edward Island championed the affordability issue. They are the provinces most dependent on agriculture and yet less able to pay higher amounts during a downturn because tax revenues from the suffering industry are down.
Last week, Peters added Ontario to the list.
In an open letter to Ontario farmers who are demanding $300 million in provincial aid, Peters tied the request to a more general government complaint that it is fiscally strapped because it sends too much money to Ottawa for redistribution to poorer provinces.
“We send $23 billion more every year to Ottawa than we get back in services,” he wrote. “To ensure that all of Ontario continues to prosper through the necessary investments in health, in education and in our agri-food sector and rural communities, we need to hang onto more of our money.”
He said Ontario cannot afford an additional $300 million to farmers. Ottawa will have to agree to cost share.It amounts to a challenge to the CAIS formula of 60-40.
