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Ag industry reacts to Freeland’s federal budget

Ag industry reacts to Freeland’s federal budget

The Canadian Federation of Agriculture is pleased with industry funding commitments

By Diego Flammini
Staff Writer

The Canadian ag sector is generally pleased with the federal government’s commitments to the industry laid out in Finance Minister Chrystia Freeland’s federal budget.

During her speech on Monday, Freeland highlighted ag among the sectors which will build the foundation of the country’s “new, resilient and sustainable economy.”

Industry reps were happy to hear that kind of recognition from the federal government.

“It was really exciting from our perspective to hear Minister Freeland identify agriculture as one of the pillars that were going to form the foundation of Canada’s new economy,” Chris van den Heuvel, second vice president of the Canadian Federation of Agriculture (CFA), told “That goes a long way to recognize what our industry can do and how it can help Canada in its post-COVID economic recovery.”

One important component of the budget is the federal government recognizing farmers can play a role in the fight against climate change.

The federal government pledged $200 million over two years to launch “immediate, on-farm climate action under the Agricultural Climate Solutions program.”

This 10-year program is designed to help develop and implement farming practices capable of tackling climate change.

“This funding is certainly going to unlock farmers’ potential as a net carbon sink while still allowing us to produce safe and healthy food for Canadians and people around the world,” van den Heuvel said.

Part of producing that food includes drying grain, a necessary cost for producers.

To help farmers acquire better equipment, the federal government is setting aside $50 million to help farmers buy more efficient grain dryers.

To use these dryers, producers must use either propane or natural gas. And with the government’s carbon tax in place, these costs have increased.

Ottawa has pledged to provide $100 million in payments from the price on pollution to Canadian farmers beginning in 2021-22. Payments are expected to increase over time as the price on pollution goes up in Canada.

“The carbon tax is a double-edged sword,” van den Heuvel said. “We want to do our part to help mitigate climate change, but the taxes make things very expensive. Anything we can do to mitigate costs and allows us to reinvest in our farms is welcomed.”

Other funding commitments to help the industry include:

  • $10 million over the next two years from the Agricultural Clean Technology Program to help power farms with clean energy,
  • An additional $1.5 billion to Canada’s Universal Broadband Fund to bring broadband to more communities faster,
  • $292.5 million over seven years for a Processor Investment Fund for dairy processors affected by CETA and CPTPP,
  • $57.6 million in 2021-22 to extend the Mandatory Isolation Support for Temporary Foreign Workers, and
  • $1.9 billion over four years to recapitalize the National Trade Corridors Fund.

This fund helps further projects designed to help move goods within Canada and to international customers.

With the federal government’s goal of increasing food exports to $75 billion by 2025, this investment is welcomed, van den Heuvel said.

“This funding doesn’t go into the ag budget, but it does have implications for farmers,” he said. “Whether it’s highway infrastructure or railway infrastructure, those projects help us get our products to market and help the government meet its targets in the next couple of years.”

Other groups voiced support for the budget as well.

The investments announced in the sector will help position Canadian ag as a pillar of the country’s economy after the pandemic, said Bob Lowe, president of the Canadian Cattlemen’s Association.

“CCA welcomes Budget 2021 as a starting place for economic recovery discussions. With enabling supports and strategic investments, the agri-food sector has the potential to come out of the pandemic stronger than ever and help Canada in its fight against climate change,” he said in a statement. “We encourage the Government of Canada to continue consulting with the agriculture sector, including the beef industry, as details of these new policies, programs and funding opportunities are finalized.”

Minister Freeland’s budget wasn’t a total win for the ag sector.

Certain items weren’t mentioned that the industry was looking for, van den Heuvel said.

“The CFA had introduced a Buy Canadian Campaign and we didn’t see any movement on that,” he said. “We were also looking for steps to change some of the income tax around intergenerational farm transfers. Often times it’s more difficult to transfer a farm inside of the family opposed to someone outside of the family. We’ll keep working on these items with the government to see what we can do.”

One industry organization was looking for the federal government to invest in the Pest Management Regulatory Agency.

Investing into the PMRA would help farmers access new and emerging crop protection technologies, said Andre Harpe, chair of Grain Growers of Canada.

“Our members will continue to advocate for increased resources in this area, as well as a commitment towards further public ag research funding,” he said in a statement. “A failure to invest in research and development puts our sector at a competitive disadvantage relative to other jurisdictions and risks limiting our growth potential.”

Members of the federal Conservative party feel parts of the budget will hurt farmers more than help them.

Producers often rely on buying used equipment which run on diesel fuel. Incentivizing the use of alternative fuels doesn’t meet farmers’ needs, said Liane Rood, the Conservative ag critic.

“Farm equipment powered by diesel-fuelled engines is necessary because of the need for high torque in pulling heavy equipment around thousands of acres of farmland. This underscores how out of touch this government really is,” she said in a statement.

Parliament still needs to vote on the federal budget.

Because they have a minority government, the Liberals will need support from at least one other party to pass its budget.

If all three parties voted against the budget, it could bring about an election.

But NDP Leader Jagmeet Singh has signaled he will support the budget.

“There’s no way I would ever trigger an election while we’re going through this third wave,” he told Your Morning.

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