In the heat of last month’s federal-provincial agriculture ministers’ negotiation over farm safety nets, Ottawa threatened unilateral action unless a deal was struck.
Federal agriculture minister Lyle Vanclief said he feared the national safety net system was in danger of being dismantled because of political squabbling and the inability of the provinces to agree on how the money should be divided.
Vanclief told provincial ministers during the March 22-23 meeting that without a deal, Ottawa was prepared to announce a national plan that would have involved just the federal 60 percent share of the budget.
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“If you get into the situation where there might be a situation of the national safety net system falling apart, I reminded everyone that I realized the importance of that and they had expressed their realization of the importance of there being national safety net programs,” the federal minister said after an appearance at the House of Commons agriculture committee where he first mentioned his ultimatum to the provinces.
“I said to them there comes a time when we might get very, very close to losing that,” said Vanclief. “We cannot do that and we must not do that to the producers across the country.”
In the end, the ministers agreed to a new distribution formula for the basic safety net and agreed to move $65 million a year from disaster aid to the basic fund. Vanclief then sealed the bargain by promising to find an additional $40 million annually to make sure Saskatchewan and Manitoba did not lose money because of the new formula.
During the committee meeting, Vanclief fended off opposition criticism of the Agricultural Income Disaster Assistance program.
He insisted all the AIDA money will be sent to farmers despite critics’ predictions that because of the rules not all the money will be spent. “I can assure you every dollar will be spent,” said the minister.
By March 19, a total of $380.3 million had been paid out in 1998 claims, and 34 percent — $130.2 million — went to Saskatchewan. Ontario and Alberta were the next largest recipients at $94.4 million and $92.4 million.
In Saskatchewan, 61 percent of the 28,729 claims were rejected and at $11,676, the average payout in the province, was one of the lowest in the country.
Vanclief agreed that the average bureaucratic cost of processing AIDA applications was higher than normal at $652. He attributed it to the fact the program was new, changes in the rules were made along the way and new computers had to be purchased.
“Those costs will go down as we move into later years,” said Vanclief.
And he conceded there were some stumbles along the way as the program was designed in the middle of a farm crisis.
When New Democrat MP Dick Proctor noted that a significant part of Canada’s problem was that agricultural support has dropped dramatically since 1993 while competitor countries provide much more funding, the minister agreed.
But Vanclief said those domestic cuts were necessary because of the sorry state of finances that the Liberals inherited from the Conservatives in 1993.
“We could still have those spending levels (for farm supports) if we wanted to have a $42 billion deficit.”
The minister also argued the government has shown it is willing to reinvest as finances improve.
“The pain has been suffered,” he said. “We have put a lot of money back in.”
