Agriculture Canada has told Parliament it will be spending at least $444 million more this fiscal year than it expected.
In supplementary spending estimates presented in the House of Commons last week, the department said the original spending plans presented to Parliament for the fiscal year that ends March 31, 2006, underestimated farm support payments and BSE-related expenses.
The new spending estimate brings the total expected Agriculture Canada budget to $2.6 billion.
Almost certainly that will increase when further supplementary estimates are presented during the winter.
“When we prepare the original numbers, they really are a best guess on what will be needed,” senior Agriculture Canada finance official James Roberge said. “Things change and we have to update.”
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Part of the reason is new program and funding announcements made by the government. A little more than $138 million are new expenditures that must be approved by Parliament, ranging from $31 million for BSE compensation flowing from a previous announcement to $74 million to cover agricultural policy framework obligations that stretch back as far as 2003.
However, the bulk of the projected spending increase – $306 million – comes in programs already approved by Parliament to be funded according to demand.
Most of that is a $273 million bill for Canadian Agricultural Income Stabilization program payments needed this year to compensate for poor farm incomes in previous years.
The government also is budgeting a $5 million contribution to the Canadian Cattlemen’s Association Legacy Fund.
That was established by the industry to develop a broader export base in the aftermath of the BSE crisis that closed the American border to live cattle for more than two years.
Meanwhile, the department also reported to Parliament last week that under a government-wide expenditure review, Agriculture Canada has trimmed almost $25 million from low priority program spending including more than $12 million from environmental spending, $7 million from international promotions and $2 million from the research division.
The science savings were supposed to come from closing a handful of research sites across the country. Agriculture minister Andy Mitchell has put those closings on hold while a review of the department’s science programs is completed.
Roberge said those projected savings still must be found, even if the research site closings and the expected operating cost reductions have not happened.
“The centre does not care where we make the savings but we are committed to those savings so they have to be found in the system,” he said.
