Ag department hit in Alberta budget cuts

The Alberta government is moving to conduct less of its own agricultural research as it plans to reduce expenditures in the department.

The government outlined in the provincial budget today that it plans to cut expenditures in the agriculture and forestry ministry by $88 million. It spent $967 million in 2018-19 and plans to spend $879 million in 2019-20.

Cuts are expected to reach a total of $145 million as the province anticipates on spending $822 million in 2022-23.

The cuts are part of the province’s budget, which will be reducing funds to post-secondary education, energy, environment and parks, infrastructure and others, resulting in layoffs and not re-hiring vacant positions in the civil service.

The budget is forecast to have a $8.7 billion deficit in 2019-20, though it plans to get in the black with a $600 million surplus by 2022-23. It will be increasing spending in health and social services, as well as maintaining education spending.

In the agriculture and forestry ministry, the primary agriculture division will be among those heavily affected.

The division will see cuts of $7 million in 2019-20, moving to a total reduction of $26 million by 2022-23. It had a budget of $77 million in 2018-19, but will be reduced to $70 million in 2019-20 and eventually to $51 million by 2022-23.

Department officials explained the primary agriculture division deals with production and research, as well as partnering with associations and universities.

The reductions will mean fewer staff, according to officials. The government will not re-fill vacant positions and potentially let staff go in later years, though what that will look like has yet to be determined.

As well, staffing levels have yet to be determined at the Alberta Ag Info Centre, which includes specialists who help producers manage crops.

The ministry is in the process of reigning its research priorities. It’s looking to fund research conducted by farmer groups rather than doing its own research.

The ministry is also streamlining its delivery of research grants.

It’s moving funds from its own research funding programs into the Canadian Agriculture Partnership program, a joint initiative by the federal and provincial government.

The move means funding will remain the same, but it will allow department staff to streamline its process in allocating the dollars.

Among the cuts are those to the processing, trade and intergovernmental relations division. The province is cutting $30 million to the division for 2019-20, though the bulk of that will come through the elimination of the distillers program.

Delivery of crop insurance won’t change and producers’ premiums won’t be impacted.

In the budget, the estimate for crop insurance is $29 million less than it was last year. Despite the lower estimate, it will have no bearing on how much AFSC will pay out. The corporation can pay out more than what is estimated depending on crop conditions.

“AFSC has a very strong balance sheet,” Dreeshen said.

The province will be axing all agriculture programs that were once funded by the carbon tax. Applications for funding from those programs will be returned to producers.

The programs helped producers offset costs for installing solar panels and for upgrading irrigation equipment.

Greenhouse growers who paid the carbon tax in 2018, about $2.5 million in costs, will see those funds returned.

Along with spending reductions, the province is implementing higher fees for some purchased goods.

Albertans can expect to pay $5 more for a carton of 200 cigarettes. Loose tobacco taxes will rise 3.75 cents. As well, fees for motor vehicle licenses and land titles will rise.

Education property tax will remain the same.

The province expects bitumen resource revenue to increase in 2019-20, but fall for a couple of years before rebounding in 2022-23. Other resource revenue is expected to drop in 2019-20 but slowly increase in the following years.

It expects more revenue from corporations, even though it plans to cut corporate taxes, as well as additional revenue from personal income tax as time progresses. It believes reducing corporate taxes will boost investment.

Finance Minister Travis Toews said the province will be reviewing its transfer programs, which see dollars get sent to the federal government.

In the budget, the province laid out three different scenarios that could impact revenue. The scenarios, if they come into fruition, include a potential global recession, blocked market access and higher oil prices.

Alberta will be introducing a new child and family benefit, which aims to help lower-income families. The program is an amalgamation of other initiatives brought in by the former government.

Contact jeremy.simes@producer.com

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