Opinion: Minister buying time on business risk programs

Federal deficit and provincial agreement are barriers to change

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The federal government is buying time when it comes to making drastic improvements to AgriStability and other business risk management (BRM) programs.

Federal Minister of Agriculture Marie-Claude Bibeau recently announced minor, cost-free tweaks to AgriStability, during the same week the public was given an updated look at Canada’s fiscal situation.

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The recent fiscal update shows the Liberal government deficit has continued to grow. It is now billions of dollars more than what was expected when the budget was released in March — and the figures provided don’t account for the billions more in spending and tax cuts promised by the Liberals in the 2019 election.

The Liberals pledged to improve BRM programs during the campaign, and since her reappointment to cabinet, Bibeau has made a point of stating publicly that she wants to improve AgriStability.

That is why rather than making changes now Bibeau announced, alongside her provincial counterparts, a full review of BRM programs to be completed by April, and then addressed when the country’s agriculture ministers meet in July.

This suggests there won’t be a significant increase in funding in the budget when released (typically, this happens in March).

Bibeau knows BRM improvements are going to cost money (especially if there is to be a return to the long-called for 85 per cent reference price margin), telling reporters it was appropriate to do a review, to make sure, “that when we’re ready to put more money on the table, we would do it towards the right program.”

Her words combined with the overarching federal fiscal picture suggest the federal government isn’t ready to put more money on the table right now. Time will tell if it will be ready in July.

Farm groups are right to raise concern about significant improvements being ready for the 2020 season. They also have the right to be frustrated by slow or inadequate action.

Reviewing BRM programs before making changes is a necessary step, sure, but it’s not as if the problems with AgriStability are a mystery. The Liberals have noted some of the issues in their own recent reports.

They are aware that despite the number and value of AgriStability payments going down, the administrative cost of the program has stayed flat since 2013, when the program last experienced a major overhaul.

Administrative costs as a percentage of the payments to producers increased from 15 per cent in 2010-11 to 21 per cent in 2014-15, for example.

The Liberals know to address this issue, a major change in the program’s design is needed.

The government is aware participation rates in AgriStability have consistently declined, something the minor tweaks looked to address but won’t, according to groups like the Grain Growers of Canada.

And of course they know about the longstanding ask for the reference price margin to increase and complaints of it being a cumbersome, complicated program.

But improving upon all of that costs money. And while the Liberals have demonstrated a clear desire to spend, they clearly have not made improving BRM programs a priority.

If it was, Bibeau wouldn’t be buying time the way she is now.

About the author

Reporter

D.C. Fraser

D.C. Fraser is Glacier FarmMedia’s Ottawa-based reporter. Growing up mostly in Alberta, Fraser also lived in Saskatchewan for ten years where he covered politics, including a stint teaching at the University of Regina’s School of Journalism. He is an avid fan of the outdoors and a pretty good beer league hockey player. His passion for agriculture and agri-food policy comes naturally: Six consecutive generations of his family have worked in the industry.

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