The federal Conservative government’s massive $60 billion tax reduction promise over the next five years leaves most farmers feeling left out, says the vice-president of the country’s largest farm lobby.
“A lot of the farmers I’ve talked to say they are more worried about income than tax cuts and more interested in government investment,” said Ontario farm leader Ron Bonnett.
He said the Canadian Federation of Agriculture is planning a lobby campaign to convince finance minister Jim Flaherty to spend money on farm safety nets, agricultural research and transportation infrastructure when he unveils an expected pre-election budget in February or March.
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“Farmers have made a hell of a lot of sacrifices since (former finance minister Paul) Martin started making the cuts more than a decade ago,” said Bonnett. “We’ve never really recovered in research, in infrastructure, in many of the underpinnings of the farm economy.”
He said there is a particular need for the government to use some of its surplus billions to help livestock and horticulture sectors that are being hit hard by a high Canadian dollar and retail prices that are less than production costs.
“A meltdown is happening in some key sectors and the government can’t let that happen without help,” he said. “There needs to be a better balance between tax cuts and investment.”
On Oct. 30, Flaherty produced a “fiscal update” that reported higher-than-expected surpluses allowing the government to cut the goods and services tax by one percentage point to five percent and to lower both personal and corporate income taxes.
The income tax savings are retroactive to Jan. 1, 2007. The lower GST takes effect Jan. 1, 2008.
“The $60 billion tax relief package announced today brings the federal tax burden to its lowest level in nearly half a century,” said the finance minister.
Bonnett said the Conservative emphasis on tax cuts misses the needs in agriculture where infrastructure, regulatory costs and income are greater concerns.
The GST cut, worth more than $5 billion, will do little for farmers because their major business purchases either are exempt or the tax paid is rebated.
“For farmers it is more of an in and out issue, more administration than anything,” he said. “Farmers will benefit to the same small extent as most Canadians but not more because they spend more on inputs.”
Meanwhile, Liberal agriculture critic Wayne Easter called on the government to use some of its surplus to help a producer-owned federally inspected packing plant in Borden, P.E.I., survive.
The plant was created after the BSE crisis closed the American border in 2003 and it is the only federally inspected plant east of Montreal.
However, a steady stream of losses in the millions of dollars has put the plant on life support.
On Nov. 2, Easter demanded in the House of Commons that the Conservatives respond to demands from Atlantic governments and livestock groups for a federal investment.
“With a government swimming in cash, how can this minister do nothing for slaughter plants, for producers and for our national security?” demanded the P.E.I. politician. “Why is he failing our country?”
Easter received no commitments from the government other than a reminder that $80 million has been promised to help cover the cost of specified risk material removal and disposal.
