It turns out the federal government budget night commitment to spend $50 million “new dollars” over three years to expand slaughterhouse capacity in underserviced regions is less than what it seemed.
Instead of the matching grants industry thought it was being offered, the government is instead making loans available to investors who put up some of their own money.
“This is not what the industry thought it was getting or needs,” Liberal agriculture critic Wayne Easter said March 12 when details of the federal program were first revealed. “This is another budget promise broken.”
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Bloc Québécois agriculture critic André Bellavance used an agriculture committee hearing March 12 to ask the chair of the Québec Federation of Cattle Producers that owns the Colbex-Levinoff slaughter plant near Montreal if a loan was what it needs.
“That is not what we are asking for,” he replied.
Later in the House of Commons, Bellavance complained “that is not what producers are looking for, as they told us in committee this morning.”
But that, apparently, is what they will get.
“With respect to loan guarantees and subsidies, let me be very clear,” said Jean-Pierre Blackburn, revenue minister and minister of state for agriculture. “These are loans. We are trying to help by taking sensible action.”
The next day during a news conference from Washington, Ritz confirmed the nature of the program.
“It is a loan value,” he said. “It is a loan with low interest rates and a payback schedule of some 10 years after they become viable. That’s the nature of what we’re planning to do.”
And he confirmed that plants getting the help will have to put money up themselves.
“We are looking for industry to have some skin in the game and make sure that what is built is going to build the future of the industry, not just fill some narrow gap,” he said.
Jim Laws, executive director of the Canadian Meat Council representing more than 40 federally regulated packers, said he was surprised.
“The budget says the government will invest $50 million,” he said. “Usually, that type of word, and the words ‘contribution available to match private sector investment’ mean money. This seems contrary to what is written in the budget.”
Ron Bonnett, Canadian Federation of Agriculture first vice-president, said March 16 that it is not what industry understood was being offered.
“What I am hearing from the slaughter house sector is that it isn’t more debt they need but a cash injection,” he said.
On Jan. 27 in budget documents, the government said it would “invest” the money “to strengthen slaughter house capacity in various regions of the country to support the livestock sector.” And it promised “federal contributions to match private sector investments in sound business plans.”
As he sold the budget, Ritz never mentioned that Ottawa was offering credit.
“Our government is already delivering action on that file with $50 million new dollars to increase slaughter capacity across Canada,” the minister told the Canadian Federation of Agriculture annual meeting in late February.
“We have no intention of dumping that into the big three. This is to build capacity from coast to coast.”
There was speculation by some industry players that Ritz may have intended it as a matching contribution program but finance department officials convinced the government that it should be available only as loans.
