Finance minister Bill Morneau is expected to present his first budget to Canadians March 22, but the Liberal government’s first official fiscal accounting comes at a price — an expected near $20 billon deficit.
The rookie minister made the announcement Feb. 22 during a news conference in Ottawa and reassured Canadians who might be worried about the economy.
Many people have been hard hit by a stunning slump in oil prices, hovering around $30 a barrel. The finance minister said March’s budget will be calculated based on oil prices averaging at $41 a barrel in 2016-17.
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Manufacturing has stalled and the economy continues to lose jobs.
While Canadian exporters have started to benefit from a weak loonie, rising food prices have pushed Canadian inflation to two percent, the highest since 2014.
The current economic climate, Morneau said, means the Liberals’ projected deficit will be nearly two times higher than the $10 billion promised on the campaign trail.
“There’s no question the times are tough right now for many Canadians across the country, and in that situation a less-ambitious government might see these conditions as a reason to hide, to make cuts or to be overly cautious,” Morneau said.
“But our government believes strongly that the economic downturn makes our plan to grow the economy even more relevant than it was a few short months ago.”
Word of the budget comes as the House of Commons finance committee holds marathon meetings with stakeholders over what they would like to see in the March budget. Morneau is scheduled to testify at committee on Feb. 23.
Among the agriculture stakeholders called to testify so far are the Canadian Cattlemen’s Association and the Canadian Agri-Food Trade Alliance.
At a hearing Feb. 16, Canadian Cattlemen’s Association executive vice-president Denis Laycraft called on the federal government to fully fund the Agriculture Market Access Secretariat “so it can carry out its important work in paving the way for Canadian agri-food exports.”
The Agriculture Market Access Secretariat was formed in 2009 by then agriculture minister Gerry Ritz. Its aim is to provide a single access point to federal resources aimed at reducing global trade barriers and improving Canadian trade opportunities.
Better funding for food inspection, research and environmental stewardship would also be welcomed, Laycraft said.
While much of the federal funding for agriculture is awarded in five-year increments via the various Growing Forward agreements, the Liberal election platform in-cluded a handful of agriculture specific funding commitments, some of which are likely to make it into the budget.
The Canadian Food Inspection Agency would be given $80 million over four years “for more food safety inspections of domestic and imported foods.”
The Liberals have also promised $160 million in funding over four years for an agri-food value-added fund. Few details have been given on the fund, what its purpose would be or how it would work.
The Liberals also have given no indication as to how they plan to handle ongoing labour problems, in which worker shortages have forced processors to cut back on value-added processing.
A $100 million investment over four years for agriculture research rounded out the Liberal agriculture platform.
But the pitfalls and funding shortfalls in Canada’s agriculture system go beyond the three promises made in the Liberals platform.
Investments in infrastructure — from replacing Canada’s aging grain hopper car fleet to expanding Canadian ports — are long overdue.
The Liberals have promised to spend an additional $60 billion on infrastructure over the next de-cade, of which $5.1 billion to be handed out during the coming fiscal year.
The government has promised to be flexible on how the money will be awarded, and said the money will be spread equally to public transit projects, green infrastructure like wastewater facilities, and social infrastructure like affordable housing.
Still, it’s unclear where rural or sector based infrastructure projects will fit.
Hopefully, all will become more clear in March.
