Producers welcome previously announced capital spending but say they are unhappy with losses to jobs and programming
The Feb. 26 Alberta budget brought no major surprises for the agriculture sector.
The size of the provincial deficit, at $18.2 billion, and the provincial debt at $115.8 billion generated most of the buzz, along with an historic $1.25 billion contingency fund in the health sector to fight COVID-19.
Agriculture capital spending comprised funds previously announced: $30.6 million to expand irrigation capacity, $12 million as the government portion of irrigation system rehabilitation and $18.1 million for the expansion of Lethbridge Exhibition Park.
Agriculture and Forestry Minister Devin Dreeshen highlighted the doubling of the lending limit through Agriculture Financial Services Corp. (AFSC) to $30 million as a way to attract and support larger agricultural enterprises in the province.
Some of those larger deals are expected to arise through irrigation expansion and related food processing opportunities.
“Our irrigation money that’s going to flow out this year — with new projects there will be hundreds of kilometres of new pipelines for irrigation rehabilitation projects, two reservoirs are going to have major upgrades as well as two brand new reservoirs in southern Alberta to again expand irrigated acres by more than 200,000 after all these projects are completed,” Dreeshen said on budget day.
Alberta Federation of Agriculture president Lynn Jacobson was less enthused about the overall picture.
“It was a cut budget for a lot of things,” he said. “We lost a lot in agriculture even before the budget.”
Jacobson cited the loss of agricultural programming and the government staff cuts related to a shift away from agricultural research within the ag department.
“They’re still talking about reducing government employees. Does that mean more people from agriculture? That always has an effect.
“From our viewpoint, they’ve effectively removed themselves out of research and some of the other areas of agriculture. There’s no extension services.”
The AFA has been urging the province to accept the federal agriculture department offer to change the AgriStability program by removing the reference margin limit and increasing compensation to 80 percent from 70. The prairie provinces, including Alberta, have not agreed to sign on.
“They don’t want to do anything there. And it’s not going to cost them any more money, in our mind…. But they still don’t want to go there,” said Jacobson.
The province has suggested the change would cost $20 million. Jacobson said a 20 percent reduction in crop insurance premiums, announced in late January, would save the government more than that.
“It’s touched us here, it’s touched us there,” Jacobson said about the budget. “We know… the financial situation is not good. We also realize that too. But we probably would have taken some different approaches in some different ways if we had more say.”
NDP agriculture critic Heather Sweet said her calculations reflect major cuts to the agriculture and forestry budget.
“Most of the areas that looks like have been cut are the trade, investment and food management areas, the lending areas, insurance and the agricultural income support,” said Sweet.
“And of course that’s an issue because with the tone of this budget — it was all about job creation, diversification and investment — and yet the very areas that money is targeted for in this budget for agriculture have been actually decreased.
“Why is (the agriculture minister) continuing to decrease the budget and why is he not actually increasing his investment in the area of trade, investment and food management,” asked Sweet, during a budget-day interview.
University of Lethbridge agricultural economist Danny Le Roy said provincial debt is the big concern. In terms of agriculture, last week’s budget raised few alarms.
“I think there’s probably some bigger concerns on the horizon once the COVID stuff ends and these deficits that have been accumulating over time, at some point either these get paid off or the interest payments start getting larger and larger and larger. You can kick the can down the road only so far.”
The provincial government’s decision not to raise taxes or impose a sales tax was not a surprise, said Le Roy.
“In order to create prosperity in agriculture, people need to have the greatest freedom possible to buy and sell and to use their property as they see fit and taxes need to be kept low.
“This is why there’s been such prosperity in this province for such a long period of time, and relatively more than anywhere else in the country, is because compared to other jurisdictions this is a very low tax — or it has been — a low tax jurisdiction.
“The spending is the issue. You can’t tax your way to prosperity. It’s like placing yourself in a bucket and trying to lift yourself up by the handles.”