Farmers, agriculture and rural Canada received a small slice of the massive spending and tax-cutting budget unveiled Jan. 27 by federal finance minister Jim Flaherty.
But for agriculture, it wasn’t exactly the $550 million in new spending suggested by agriculture minister Gerry Ritz in a pre-budget news conference.
As Ritz said it would, the government fulfilled an election promise to create a five-year, $500 million “agricultural flexibility program” to fund projects designed to meet provincial or regional needs.
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The government will also spend $50 million over the next three years “to strengthen slaughterhouse capacity in various regions.”
The promise is a five year $550 million in new program spending. Â At the same time, the government says it will find $360 million of that within existing allocations to the department and add a new $190 million over two years to round it out.
The $360 million will come out of $417 million that the government projects it will find in low-priority or wasteful spending within the existing budget over the next three years.
The remaining $57 million of “found” money will be injected into Growing Forward programs.
The government also promised $225 million over three years to expand internet access through rural Canada.
And a $1 billion, two-year community adjustment fund for affected resource-based communities could help agriculture-based communities.
“We will invest new funds over the next five years to help Canadian farmers to innovate, to increase competitiveness and to achieve greater environmental sustainability,” Flaherty said in his speech read in the House of Commons Jan. 27.
Overall, he projected a $34 billion deficit in the next fiscal year beginning April 1, $30 billion the following year and a total accumulated four-year deficit of $84 billion before a small surplus appears in 2013-14.
Flaherty conceded the numbers could be wrong, depending on how long the recession lasts and how hard it hits.
“While our projections are based on the best information available, we cannot guarantee them absolutely.”
The finance minister, who has in the past spoke against deficits although he ran several while Ontario finance minister, said he regretted being the one to announce it.
“Canadians regret the need to run a deficit in order to invest in our economy. The government shares that regret,” he told the Commons. “We have chosen this course because it is necessary and because we know it will be temporary.”
While the New Democratic Party and the Bloc Québécois said they would vote against the budget to try to defeat the minority Conservative government and install a coalition government led by the Liberals, Liberal leader Michael Ignatieff said he would make his party’s voting intentions known later today.
The budget documents clarified some of the details of the two programs promised in the 2008 election.
They said the agricultural flexibility program will make money available only for non-business risk management programs. Many Ontario farmers, led by the Ontario Federation of Agriculture and championed by the Canadian Federation of Agriculture, have lobbied for an “agri-flex” program that would allow funding for provincial cost-based safety net programs.
Ritz has said he did not want it to be “reactive” safety net money but also appeared to leave the door open by saying details would be worked out in negotiations with provinces.
According to the budget papers: “This program will help the sector adapt to pressures and improve its competitiveness by funding non-business risk management measures, such as those that will reduce the costs of production, improve environmental sustainability, promote innovation and respond to market challenges.”
At a background briefing on the budget, a finance department official said: “It is not designed to be added to income supporting safety nets. It is aimed at competitiveness.”
Likewise, the budget suggested the $50 million for regional packing plants likely will not be available for construction of new plants.
The money will be available as matching dollars for private investment and for projects “aimed at reducing costs, increasing revenues and improving operations of meat slaughter and processing operations in Canada,” said budget background documents.”
The finance official said details of how the money will be spent will be worked out in Agriculture Canada “but the intent is primarily to modernize and improve the competitiveness of existing plants.”
On Jan. 23 when he gave a preview of the budget spending, Ritz said the money would be used to “develop slaughter capacity. We have allowed a lot of our slaughter capacity to slide south to the U.S. Country of origin labeling was a wake-up call that we need to do more of that ourselves.”
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