Agriculture spending | Quiet federal budget has no big announcements for rural Canada
Last week’s federal budget contained no new big ticket agricultural spending or policy plans, but agriculture minister Gerry Ritz said farmers should look beyond the obvious.
“Rural Canada depends on infrastructure, depends on jobs, depends on the economy bubbling along to allow people to buy their products,” Ritz said.
“That’s what this budget does.”
Farm lobby leaders reacting to the budget generally agreed, arguing that many of the non-farm specific promises will help the industry.
“From an agriculture perspective, I think overall this budget is pretty good,” said Canadian Federation of Agriculture president Ron Bonnett.
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There were two specific farm tax benefits in the budget:
- An increase in the one-time farm capital gains exemption to $800,000 from $750,000 with the amount indexed to inflation, saving farmers an estimated $20 million over the next two years.
- A doubling to $17,500 of the maximum amount of farm loss a part-time farmer can write off against off-farm income. Part-time and young farmers use the benefit to get into the business while working off farm to pay the bills and build equity.
The government estimates the tax benefit will be worth $10 million over the next two years. Farmers can write off the first $2,500 of loss and then half of the next $30,000, spreading it over 20 years if needed.
However, finance minister Jim Flaherty’s eighth budget was not a showcase for big farm announcements.
Major farm support spending and innovation programs have already been announced in last year’s Growing Forward 2 deal.
However, budget announcements of investments in infrastructure and research programs will help farmers, Ritz said.
A pledge to index municipal gas tax transfers from the federal government will provide stable and predictable funding for rural municipalities to invest in roads, bridges and infrastructure. The government is promising $70 billion over the next decade for municipal and federal infrastructure spending.
It is also promising $165 million to Genome Canada.
“This is a significant investment and that supports canola, the livestock sector, new variety research,” said Ritz. “There’s a good win there.”
He said money for job skills training can also help farmers.
As well, the budget stresses the government’s priority on new trade deals, many of which have significant agricultural stakes.
It also reaffirmed government commitments in the September Growing Forward deal to increase spending on innovation and adaptation, although it did not mention tougher farm support program rules that are expected to sharply cut farmer eligibility for funds under AgriStability and AgriInvest.
Ritz insisted the broad budget thrust is good for farmers and rural Canada.
“This budget is a win for farmers and rural because it isn’t just about the farm,” he said. “It’s also about infrastructure and getting products to market.”
The Canadian Cattlemen’s Association joined in the general chorus of industry praise.
“The CCA welcomes Budget 2013 and appreciates the federal government’s continued commitment to innovation, competitiveness, market development, regulatory co-operation and addressing labour shortages,” it said.
“These are the top priorities for our industry and for the CCA. “
