Ottawa and eight provinces last week agreed to co-operate in designing a new two-year farm income disaster assistance program that could make $1.7 billion available to farmers by the end of 2001.
The federal government has promised two $500 million instalments for 2000 and 2001. It is insisting provinces add another $350 million.
At a Jan. 14 federal-provincial meeting, the majority of provinces agreed to sign on. Officials will work for the next month to design a program that is less bureaucratic, less cumbersome and faster than the Agriculture Income Disaster Assistance program, which expired Dec. 31.
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federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
Ministers expect to meet again in February or March to discuss details.
Officials are considering whether negative margins should be covered, what the reference period for income comparison should be, how to give the new program cross-Canada rules and whether farmers should be forced to buy crop insurance and use their Net Income Stabilization Account funds before being eligible.
“I think the meeting moved us along very well today toward a new income disaster program,” federal minister Lyle Vanclief told reporters Jan. 14 at the end of a seven hour meeting.
There also was agreement that the basic federal $600 million safety net fund will be allocated to provinces based on the relative size of their farm cash receipts, rather than on the basis of risk.
It means in future, Saskatchewan, Manitoba and New Brunswick will receive a smaller share of the federal fund and the rest of the provinces will receive more.
As a compromise, Ottawa and the other eight agreed that for the next two years, the two prairie provinces will receive compensation to make sure they do not receive less. It could cost more than $60 million each year, with the funding source still uncertain.
The agreement came at the cost of creating a deeper rift between Saskatchewan, Manitoba and the rest of the governments.
Stage protest
Saskatchewan agriculture minister Dwain Lingenfelter and Manitoba minister Rosann Wowchuk stalked out of the meeting at mid-point when it became clear they would not receive a commitment that Ottawa would send more than $1 billion west this year in a “trade equalization payment” and that they could not stop the change in safety net formula.
They suggested their provinces might not take part in the next federal-provincial farm aid program, preferring to keep their 40 percent and spend it themselves. Federal officials said if the provinces opt out, they must distribute their 40 percent through an “equivalent” program approved by Ottawa or the federal 60 percent might not be available.
Lingenfelter was the most defiant, insisting Ottawa could not deprive Saskatchewan farmers of the $100 million they should be eligible for under the federal plan.
“It is not likely Saskatchewan will partake in it,” he told reporters after he walked out, which some other governments suggested was pre-planned ‘grandstanding’. “But we will look at other areas of provincial responsibility to help our grain farmers and other farmers. I would be very surprised if the federal government would treat Canadian taxpayers in our province any differently than they would treat taxpayers in Quebec or Ontario.”
Wowchuk said she would discuss the next move in cabinet.
“We want to see what the program is but at the present time, we can’t make any commitments to any program when other provinces are moving (through the formula change) towards taking away from us in the basic program.”
