Late March is when provincial governments release their yearly budgets, with the federal government following later in April.

Ontario tabled it’s $214 billion ‘Building a Better Ontario’ budget on March 26. The budget projects that Ontario’s deficit will more than triple, from $3 billion to $9.8 billion in 2024-2025, the highest budget deficit outside of the pandemic since Liberal premier Kathleen Wynne’s 2014 spending plan.

For agriculture, the budget is lacklustre at best with nary a penny pencilled in for agriculture unless as a beneficiary from non-agricultural industry funding.

It’s mentioned along with manufacturing, but nothing specific is outlined. The reference is more than likely related to food processing than primary production.

When searching the pdf file of the budget, the word agriculture is mentioned only seven times: three times in a title or line item, twice related to industry-adjacent funding, once associated with OMAFRA’s $95 million overspend and once in reference as an essential part of Ontario’s economy.

It seems to me that if it were ‘essential’, agriculture would have been given some more text.

In keeping with the provincial Conservative party mantra, much of the budget is focused on housing, roads, and public services without a significant tax increase.

“These investments and more are a signal to Ontarians of our commitment to keep building Ontario while retaining a prudent, targeted and a responsible approach to public finances,” said Finance Minister Peter Bethlenfalvy during a news conference.

“We’re not backing down from investing in what matters most and we are not going to increase costs on our people.”

But farmers have had to bear a larger burden of increased costs, particularly with respect to the carbon tax. On March 28 Ontario’s Minister of Agriculture, Food and Rural Affairs Lisa Thompson and Ontario’s agriculture commodity groups outlined how this tax burden was challenging for the food and agriculture sector, sending an open letter to the federal government asking it to pause the April 1 carbon tax increase.

Thompson and the groups said in the letter “Ontario’s ability to produce food for a growing population and meet export opportunities is consistently more challenging.

“Existing exemptions to the carbon tax for our farmers won’t be enough to alleviate cost pressures resulting from the carbon tax.”

Just a week prior, Premier Doug Ford was a surprise speaker at the Grain Farmers of Ontario’s March Classic event, telling the audience that he will continue to press the federal government to pass Bill C-234, which exempts grain drying and some barns from the federal price on carbon.

But he didn’t offer any other solution, and neither did his budget.

I do think the provincial government is willing to help farmers when necessary, and this is evident in the $95 million ‘overspend’ 2023-24 listed for OMAFRA in the recent budget.

The budget document said the deficit was due to a higher uptake for demand-driven business risk management programs. When asked for further comment on the programs, an OMAFRA spokesperson said in an April 3 email “In 2023, the ministry saw an increase of payments for demand-driven risk management programs such as production insurance.

“As the ministry is currently finalizing payments for the 2023 program year, more information will be provided in the following weeks.”

Since 2021-22, the demand-driven risk management and time-limited programs have seen a steady increase in costs, from $358 million to $502 million (2022-23) to $577 million (2023-24), with a projected $477.5 million for the 2024-25 budget.

In its pre-budget submission, the Ontario Federation of Agriculture (OFA) asked for increased funding for business risk management programs. Other provincial commodity groups did as well.

Hopefully there is some wiggle room in the budget to help farmers deal with unforeseen weather events or other costs, should the growing season or markets be more unpredictable than they have been the last few years.

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The Ontario government released its 2023 budget on March 23. Overall, public spending will increase a little over two per cent from last year, with significant increased investments made in health care, education and developing the province’s workforce. The Conference Board of Canada called it a “fiscally prudent” budget and there were some wins for agriculture.

Three commitments made in the province’s agri-food strategy, released last November, received funding. Although it announced a bump to the risk management programs for the agriculture sector last year, this was confirmed in the March 23 budget.

New announcements included funding to support increased veterinary capacity and improve soils.

Livestock groups in the province have been raising the alarm over lack of access to veterinary care, particularly in northern regions. A new initiative, the Veterinary Incentive Program will provide $900,000 over three years to assist 30 recent large animal veterinary graduates each year with student loans and costs to relocate to underserviced areas.

An additional 20 students per year will be enrolled in the Doctor of Veterinary Science program via a new collaboration between the University of Guelph and Lakehead University, which will add 80 more veterinary graduates in the province by 2028.

The biggest investment, $9.5 million, is allotted to improving soil health through analysis tools and digitizing the Ontario Agriculture Soil Information System.

As for direct agriculture investments, that was it.

Ontario farmers looking for relief on fertilizer costs were disappointed, as it doesn’t appear the province plans to increase the spend on its Fertilizer Accelerating Solutions & Technology Challenge, where it provided $2 million to Ontario companies working on projects or technologies to help farmers use fertilizer more efficiently. However, some of these companies may not have their technologies or products ready in time for this growing season.

Farmers looking for fertilizer cost assistance from the federal government were disappointed once again when it tabled its 2023 budget on March 28.

In a press release, farm organizations in Eastern Canada, including the Grain Farmers of Ontario, Ontario Bean Growers and the Christian Farmers Federation of Ontario said in a joint statement that the federal government “misses the mark” by failing to return tariffs on fertilizer imported from Russia paid by farmers. The groups had been actively lobbying for that since the tariff was implemented in March 2022.

Instead of returning tariff monies to the farmers who paid them, the federal government said the $34.1 million generated from the tariff would be reinvested into primary agriculture, through new funding to the On-Farm Climate Action Fund to support nitrogen management. 

Canadian Federation of Agriculture President Keith Currie said in a release that the CFA was pleased to see “clarity” on how the tariff fees would be spent, although he acknowledged “there will be some producers across Canada that would have liked to see those funds reinvested in a fashion that more directly responds to the financial challenges.”

In its statement, Eastern Canadian farm groups said “this budget represents a huge disappointment for farmers who incurred the costs of an ineffective and ill-advised tariff. Despite warnings from the United Nations, Canada was the only G7 country to ask its farmers to pay a tariff on imported fertilizer. 

“While the budget mentions the impact of the invasion in Ukraine on farmers, it does not provide a mechanism to get money back directly to farmers who paid the tariff.” 

They point to a disparity that the federal government seems to miss. Providing a fund that every farmer — even those that did not pay the tariff — can apply to for improving sustainable farming practices shouldn’t be funded in part by farmers that rely on fertilizer from overseas. And the majority of those farmers reside in Eastern Canada.

Is there a $34.1 million allotment in the federal fund that can only be accessed by those that paid the tariff? I doubt that was a consideration.

As Ontario farmers begin planting this season, it seems they will continue to pay more than many of their Canadian counterparts to grow their crops.

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Finance Minister Chrystia Freeland’s budget, released Tuesday, laid out a list of investments to “further strengthen Canada’s transportation systems and supply chain infrastructure.”

A non-financial line item in that envelope calls for the government to introduce amendments to the Canada Transportation Act for a “temporary extension, on a pilot basis” of the interswitching limit in the Prairie provinces, to “strengthen rail competition.”

Interswitching rules commit one rail carrier to pick up cars from a shipper, then deliver them to another railway for the line haul. Federal rules generally allow grain elevators and other shippers to use interswitching for up to a 30-km radius.

Expanding that maximum radius, the feds said Tuesday, “would support competition among rail carriers by enabling rail companies to access tracks owned by another rail provider within the limit, under rates regulated by the Canadian Transportation Agency.”

The previous Conservative government set up a temporary extension of the interswitching radius, to 160 km, in 2014, to the acclaim of several crop commodity groups — but that extension was sunsetted in 2016.

The Railway Association of Canada said Wednesday the 2014 extension was allowed to lapse “based on results from a previous pilot and recommendations contained in an independent study” — a reference to a 2015 review of the Canada Transportation Act.

The RAC, which represents almost 60 railways in Canada including Canadian National and Canadian Pacific railways (CN, CP), ripped the current Liberal government’s proposal as a resurrection of a “failed policy” that was “misguided and harmful to Canada’s supply chains.”

“This policy will cause Canadians to pay more for virtually everything that moves by rail,” RAC CEO Marc Brazeau said Wednesday in a release, warning the policy “will incentivize congestion in our supply chains while disincentivizing private investment.”

“This pilot has been done before,” the RAC said, listing the impacts of “switching cargo multiple times” as slowing the movement of goods by one to two days, adding to greenhouse gas emissions and adding costs.

“The measures announced today will not improve the efficiency, capacity or reliability of Canada’s supply chains. They will do the exact opposite, as we saw under extended regulated interswitching that was in place from 2014 to 2016,” Brazeau said.

However, supporters of the 2014 extension estimated in 2016 that about 150 grain elevators on the Prairies were able to make use of interswitching with the 160-km radius, up from just 14 elevators previously.

One such supporter, Pulse Canada, in 2016 said freight rates were reduced on some routings, and that grain shippers were afforded more leverage in getting rail car capacity where needed, both as a result of the extended interswitching radius.

Gordon Bacon, Pulse Canada’s then-CEO, speaking in favour of extended interswitching in 2016, said that “in cases where railways have lost business due to competition, they are actively campaigning to get it back by offering rate reductions and improved levels of service.”

‘Down payment’

The RAC on Wednesday also panned another non-financial proposal from Tuesday’s budget — namely, for legislation that would ban the use of temporary replacement workers in federally regulated workplaces affected by work stoppages.

The RAC said a ban on replacement workers would mean rail service “will be disrupted more frequently,” strikes “will be more common and will last longer” and federal back-to-work legislation “will be required more often.”

Tuesday’s budget also earmarks $27.2 million over five years starting in 2023-24 for Transport Canada to establish a “Transportation Supply Chain Office.”

That office, the budget said, would “work with industry and other orders of government to respond to disruptions and better co-ordinate action to increase the capacity, efficiency, and reliability of Canada’s transportation supply chain infrastructure.”

The budget noted the measures announced Tuesday “are a down payment on Canada’s National Supply Chain Strategy,” which the government said “will be released in the coming months and will be informed by the recommendations of the National Supply Chain Task Force report.” — Glacier FarmMedia Network

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Freeland’s 2023 federal budget, released Tuesday, includes $13 million in 2023-24 for Agriculture and Agri-Food Canada to temporarily increase the interest-free limit for loans under its Advance Payments Program (APP) to $350,000 for the 2023 program year.

The interest-free portion of an APP loan was previously capped at $100,000 but that level was temporarily raised last summer to $250,000 for the 2022 and 2023 program years.

The APP provides farmers with cash advances of up to $1 million, based on up to 50 per cent of the anticipated market value of a farm’s eligible production, whether it’s still to be produced or is already stored.

“Farm production costs have increased in Canada and around the world, including as a result Russia’s illegal invasion of Ukraine and global supply chain disruptions,” Tuesday’s budget documents said. “It is important that Canada’s agricultural producers have access to the cash flow they need to cover these costs until they sell their products.”

On that note, the budget also committed the feds to “consult with provincial and territorial counterparts to explore ways to extend help to small agricultural producers who demonstrate urgent financial need.”

Fertilizer funding

On the matter of input costs, the budget also notes Russia’s invasion of Ukraine “has resulted in higher prices for nitrogen fertilizers, which has had a notable impact on eastern Canadian farmers who rely heavily on imported fertilizer.”

To that end, the budget proposes a $34.1 million addition to the federal On-Farm Climate Action Fund over three years, specifically “to support adoption of nitrogen management practices by eastern Canadian farmers, that will help optimize the use and reduce the need for fertilizer.”

That $34.1 million figure roughly coincides with a recent estimate of the tariffs collected so far on imports of Russian fertilizer into Eastern Canada. Several grower groups in that region have called for an end to that tariff and for farmers to be directly reimbursed for tariffs already paid.

Dairy development

Among other longer-term investments, the budget proposes $333 million over 10 years to set up what it calls the Dairy Innovation and Investment Fund, starting in 2023-24, to back development of new dairy products based on solids non-fat (SNF), a dairy processing byproduct.

The dairy sector is up against “a growing surplus” of SNF, for which the limited processing capacity in Canada “results in lost opportunities for dairy processors and farmers,” the budget said.

The new fund would support “investments in research and development of new products based on SNF, market development for these products, and processing capacity for SNF-based products more broadly.”

Inoculation inventory

The budget also pledges $57.5 million over five years starting in 2023-24, and $5.6 million ongoing, for the Canadian Food Inspection Agency to set up a foot-and-mouth disease (FMD) vaccine bank for Canada and develop FMD response plans.

Recent outbreaks of FMD in livestock in Asia and Africa “have increased the risk of global spread,” the budget said, and if an FMD outbreak were to occur in Canada it “would cut off exports for all livestock sectors, with major economic implications.”

The impact of a potential FMD outbreak “would be significantly reduced with the early vaccination of livestock,” the budget said. For the vaccine bank, the feds plan to “seek a cost-sharing arrangement with provinces and territories.”

The Canadian Cattle Association on Tuesday hailed the vaccine bank announcement, describing a vaccine bank as a “critical” investment which “helps provide necessary insurance to protect Canada’s export markets.” Several livestock groups have called for such an investment in recent years.

“While we hope this vaccine bank is never needed, we are grateful for today’s investment and its establishment,” CCA president Nathan Phinney said in a separate release. “We appreciate the government listening to our concerns and understanding the critical need to put in place emergency preparedness plans to control the spread of the disease and protect our export markets for Canadian beef.”

Risk management

CCA also hailed a separate budget line item pledging $184 million over three years to boost the Species At Risk Act. That funding goes to the federal environment, parks, fisheries and natural resources departments “to continue monitoring, protecting and promoting the recovery of species at risk to help restore their populations.”

“We will be engaging with the government of Canada to ensure beef producers are at the table as key stewards of lands where species at risk live,” the CCA said.

On that matter, noting cattle producers’ stewardship work on endangered native grasslands, Phinney said the CCA calls on Ottawa “to include support for protecting Canada’s grasslands in the future.”

Liquor and cannabis

Among federal sin taxes, the feds propose to temporarily cap the inflation adjustment for excise duties on beer, spirits and wine at two per cent, for one year only, as of April 1. Alcohol excise duties are usually automatically indexed to total Consumer Price Index (CPI) inflation at the beginning of each fiscal year.

The feds also announced plans to allow all licensed Canadian cannabis producers to remit excise duties on a quarterly basis rather than a monthly basis, also starting April 1. That move expands on a measure put in place for “certain smaller” cannabis producers in the 2022 budget.

On that note, the budget said, “while significant progress has been made in eliminating criminal activity in the cannabis market, licensed cannabis producers are currently experiencing financial difficulties as they help to build a stable, legal cannabis industry in Canada.” — Glacier FarmMedia Network

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The $198.6 billion, 268-page budget didn’t have many surprises. Titled “Ontario’s Plan to Build,” it outlines major commitments previously announced, but with a bigger spend on large infrastructure projects. 

The ‘big build’ the party has in mind, and that it says will grow the province’s economy and employment numbers, involves spending on infrastructure that really only helps those living and working in the Greater Toronto Area (GTA).

The plan calls for $25.1 billion over 10 years on new highway construction and expansions to ease congestion (with some of the proposed roads going through the Greenbelt and agricultural lands) and $61.6 billion over 10 years for public transit, including a new subway transit plan for the GTA and transforming the GO Transit network into a modern, reliable and fully integrated rapid transit network.

Part of the plan is expanding mining development in the north to supply minerals needed for the batteries to power electric vehicles. Expanding EV production as well as trying to re-invigorate the auto manufacturing sector are key to the party’s election campaign. 

While hospitals, schools and long-term care homes will see a funding boost, there was little mention of what the province plans to do for the agriculture sector. 

The few agricultural items mentioned in the budget deal with enhancing and maintaining worker safety and supporting food processing labour shortages. 

These aren’t really ‘new’ investments, and they are tiny in comparison to the infrastructure projects. For example, the plan will provide $10 million in 2022–23 for ongoing support and expansion of the Enhanced Agri-Food Workplace Protection Program,
a plan that had already been announced. Another $10 million is earmarked in 2022–23 to establish a Food Security and Supply Chain Fund, which the plan says will “strengthen Ontario’s food supply, including addressing barriers to recruitment by attracting and retaining domestic workers, closing sector skill gaps, and supporting the well-being of workers.” 

To its credit, the Ontario government has acknowledged the lack of food processing capacity and labour, and recently announced a fund of $25 million to help address this. The budget maintains the financial support for Phase 2 of the Natural Gas Expansion plan and says it will begin consulting this fall on “how to best deliver Phase 3 of the program”, so there is hope that more rural communities will have access to natural gas in the coming years. 

But providing only $5 million in the plan in 2022–23 for emergency support initiatives to help livestock producers if emergency processing disruptions occur, without mention of any other business risk program funding for other agriculture sectors, shows the plan falls short and is obviously not in step with a sector that contributes $39.5 billion to the province’s GDP. 

When the budget was released, farmers were facing the greatest amount of uncertainty seen in decades, with geopolitical factors putting inputs in short supply and increasing costs almost daily. 

The need for better financial supports was highlighted by both the Grain Farmers of Ontario (GFO) and the Beef Farmers of Ontario (BFO) in their pre-election consultation submissions. 

The GFO said “grain farmers need to know the government has their back. Financial supports need to be explored as there is nothing within the current Business Risk Management suite that will provide the support that farmers may need if worst case scenarios are realized on prices for fertilizer and fuel.”

The BFO asked the government to raise the program cap from $150 million to $250 million annually in the Ontario Risk Management Program “to ensure our farms have the tools to manage today’s food production risks.”

The PC party says the budget will hold if they are elected. 

Where does agriculture fit into the ‘big build’? 

Appeasing voters in the GTA by reducing their commute time is all well and good but it is illogical if that expansion comes at the cost of farmland and the province’s ability to produce its own food. 

Agriculture can play a key role in the economic expansion and recovery of the province, but foresight and financial stability are needed to make that happen. 

Rural areas need roads and infrastructure, too – and farmers need assurance that they can make a living.

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The province said Wednesday in a budget release that a “number of clarifications” will be made to its Provincial Sales Tax (PST) Regulations effective April 1 relating to “farming and agriculture activities.”

Noting such lists are reviewed each year, a finance ministry spokesperson said Thursday the changes being made are “relatively small” in terms of reduced provincial tax revenue, at about $1 million per year.

The list of items and activities to be specifically included in the list of on-farm PST exemptions starting April 1 are expected to address concerns raised by producers over what they viewed as “PST creep.”

The province thus consulted with ag groups on what their members viewed to be “unfair or inconsistent” application of PST.

“While not significant in dollar value, these changes will clear up a number of issues included on these lists,” the ministry spokesperson said via email.

Items, services and activities to be specifically listed as PST-exempt for on-farm use starting April 1 include:

• corral slabs and windbreaker panels;
• insulators for electrified cattle fences;
• portable seed cleaning equipment, if used on-farm and not by for-profit operators of mobile custom seed cleaning services;
• certain chemical storage tanks and water storage tanks;
• crawler tractors, if to be used on-farm and not in the construction sector;
• on-farm digging of dugouts; and
• on-farm trenching for “certain irrigation and electrical purposes.”

The updates to the PST code will also further clarify the exemption for “certain farm equipment attached to a registered vehicle,” the ministry said.

The ministry said it also plans to start discussions with the goal of “modernizing” the agriculture and farming sections of the Provincial Sales Tax Act.

Those changes, the ministry said, may “potentially be considered by the government as part of the 2023-24 budget development cycle.” — Glacier FarmMedia Network

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Provincial Finance Minister Donna Harpauer on Wednesday released her 2022-23 budget with $17.6 billion in expenditures on $17.2 billion in revenues, for an expected deficit of $463 million, well down from the province’s forecast deficit of $2.185 billion for 2021-22.

The province said its budgetary appropriations and expenses for the agriculture ministry come in at $462.4 million, up 19.5 per cent from 2021-22, on “strong 2022-23 crop insurance program and record agriculture research funding.”

The 2022-23 budget’s broader agriculture-themed expenditures come in at $1.04 billion, up 18.3 per cent from the 2021-22 budget of $879.3 million, primarily due to “higher projected crop insurance indemnities as a result of higher crop prices, as well as higher reinsurance premiums.”

However, that estimate is well down from the province’s latest forecast for those 2021-22 ag-themed expenditures, at $3.19 billion, due mainly to last year’s drought-related crop insurance payouts and AgriRecovery program costs.

New line items relating to agriculture this year include $475,000 to set up a new Crown corporation, to be called the Saskatchewan Indigenous Investment Finance Corp.

The new Crown is expected to offer up to $75 million in loan guarantees on private-sector lending to Indigenous communities and organizations for investments into “natural resource and value-added agriculture projects,” the province said.

The province will also further backstop major value-added ag projects through “enhancement” of the Saskatchewan Value-added Agriculture Incentive (SVAI), a 15 per cent tax credit in place since 2018 on capital expenditures of at least $10 million toward newly constructed or expanded value-added ag facilities.

Retroactive to 2018, eligible projects will still get the 15 per cent rebate on the portion of a project’s expenditures up to $400 million, but could also get 30 per cent on the portion between $400 million and $600 million, and 40 per cent on the portion in excess of $600 million. The dollar value of the tax credit will be capped at $250 million.

Examples of qualifying projects include canola crush facilities, pea protein processors, oat milling operations, malt producing operations, and cannabis oil facilities, the province said.

The SVAI and other incentives are “key to Saskatchewan’s competitiveness, attracting private investment from global companies like BHP, Richardson International, Viterra, Ceres Global Ag, Cargill, Federated Co-operatives, AGT Foods, Paper Excellence and Red Leaf Pulp,” the province said Wednesday.

The province on Wednesday also noted that starting April 1 this year, certain “clarifications” will made to provincial sales tax (PST) related to farming and agriculture activities — for example, confirming a PST exemption for the “on-farm digging of dugouts.”

Revenues

On the taxation side of the ledger, the province announced Wednesday it will make “minor changes” to its education property tax (EPT) mill rates for this budget year, “asking residential (and) agricultural as well as commercial and resource property owners to pay slightly more EPT on average.”

For agricultural properties, that 2022 EPT mill rate will rise to 1.42 from 1.36, while residential property EPT mill rates will rise to 4.54 from 4.46.

Harpauer said Wednesday the province’s improved revenue forecast is based on increased revenue from taxes at $8.1 billion, up $850 million from 2021-22 — but also on non-renewable resource revenue at $2.9 billion, up by $1.6 billion from 2021-22.

That increased resource revenue, she said, is “largely due to higher potash and oil price forecasts, which is the result of stronger than expected global demand.”

While crude oil values have been on an upslope for months, they recently leaped higher following Russia’s invasion of Ukraine, as economic sanctions imposed by other countries limit Russia’s involvement in energy markets.

Potash prices have also climbed due to fresh sanctions limiting exports from both Russia and Belarus, the world’s No. 2 and 3 potash-producing countries behind Canada.

“It’s too soon to tell if oil prices will remain high for an extended period and what impact that could have on revenues,” Harpauer said, adding that “because resource prices are so volatile, our government has set a goal of reducing our reliance on resource revenues.” — Glacier FarmMedia Network

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Finance Minister Chrystia Freeland’s first budget, released April 19, included significant spending to help producers transition to a greener economy and cited agriculture as a foundational pillar of Canada’s future.

“CFA will be working closely with the federal government to ensure that these words are followed with impactful actions that truly leverage the potential in our sector,” said CFA president Mary Robinson in a statement.

Six investments in particular were highlighted by CFA as items in line with the pre-budget recommendations made by Canada’s largest general farm group.

A $1 billion commitment to rapidly roll out broadband projects, and additional money to assist farmers combat COVID-19 and climate change were included on that list, and in budget 2021.

CFA said it would have liked to see “targeted investments addressing the sector’s continued labour needs and leverage domestic market opportunities” but welcomed $1.9 billion in spending over four years to improve Canada’s trade corridors.

“Agriculture has the ability to become a natural climate solution with the continued adoption of technologies and techniques that improve carbon sequestration and capture” with the proper investments and infrastructure, Robinson said.

Bob Lowe, president of the Canadian Cattlemen’s Association, said the group sees the budget 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.”

The CCA said the beef cattle sector is already leading sustainability initiatives through its 2030 goals and “look(s) forward to being a partner of the government as policies and programs are developed.”

Farmers and ranchers to be part of these discussions, the CCA said, “to ensure there are not unintended consequences for the environment, such as grassland loss.

“We note the budget included land conservation efforts and it is important that grasslands, that are such a vital part of the working landscape, are included in these policies, particularly as other government policies may lead to the unintended consequence of further grassland conversion.”

Farmers For Climate Solutions offered up one of the most comprehensive pre-budget submissions to the federal government, and is claiming a win in budget 2021. Like the CFA, several of its pre-budget recommendations were directly addressed by Freeland.

A $200 million in new funding over two years to help producers reduce emissions through nitrogen management, cover cropping and rotational grazing scored high marks with the organization. So too did the $60 million set aside to protect wetlands and trees over the next two years.

As its name suggests, Farmers For Climate Solutions has focused its lobbying efforts on green investments for the sector as Canada aims to achieve its Paris Agreement targets by 2030.

Ian McCreary, a Saskatchewan grain and livestock farmer who helped develop the organization’s budget recommendations, said Canada’s customers want sustainably grown food.

“This investment will support farmers across the country to scale-up practices that are proven to reduce our sector’s emissions,” he said, “Climate change poses the single largest threat to our sector, and this investment is an imperative for our ongoing success.”

‘Points’

Agriculture Minister Marie-Claude Bibeau gave credit to the producers who continue to work to reduce emissions on their farms.

“More and more, farmers are the first ones to witness climate change,” she said, adding they are also the first ones that have to deal with changing weather.

“We have to make a much more significant shift.”

Leading up to the budget, the Liberals telegraphed several intentions and welcomed consultations.

While some groups were happy to see the government pay attention to consultations, not all stakeholders were congratulating the federal government for the 2021 budget.

The Western Canadian Wheat Growers Association (WCWG), for one, said it saw little that will benefit grain farmers in the budget and accused the government of failing to consult with the industry before announcing plans to limit nitrogen fertilizer use.

Its previously released climate plan noted direct emissions from synthetic nitrogen fertilizer applications had increased 60 per cent since 2005 and are projected to continue rising.

That plan committed to setting a “national emission reduction target of 30 per cent below 2020 levels from fertilizers and work with fertilizer manufacturers, farmers, provinces and territories, to develop an approach to meet it.”

A $50 million commitment to help retrofit grain dryers to be more environmentally friendly, as part of a $165.7 million investment, was also included in the budget.

“It is staggering to think that the federal government wants grain farmers to adopt commercially available clean technology by moving off diesel and assist with the purchase of more efficient grain dryers – this is an odd proposal and suggests that the farmers don’t already adopt the newest innovations that have proven benefits… which couldn’t be further from the truth,” Margaret Hansen, Saskatchewan’s director for the WCWG, said in a statement.

Despite Hansen’s assertion all farmers are already adopting commercially available clean technology, the federal government plans to help cover the cost of retrofitting about 1,400 grain dryers to be more environmentally friendly.

Asked about a lack of consultation, Bibeau pointed out she regularly ranks among the most lobbied federal politicians.

“I feel that’s all my life,” she said. “I spend my life on Zoom (with stakeholders).”

She said actions taken in this budget, and action items proposed ahead of it, were measured by their contributions to reaching Canada’s climate goals.

“The proposals that were bringing the best results in terms of reducing emissions would gain more points when it came to the final decision,” she said.

Grain Farmers of Ontario, meanwhile, said it “applauds” the government’s budget pledge to return a portion of the proceeds from carbon pricing directly to farmers.

GFO chair Brendan Byrne said the budget “recognizes that many farmers rely on natural gas and propane in their operations and that there are no ready substitutes.”

GFO was among several farm groups calling on Ottawa to exempt fuels used for grain drying from the pollution pricing system. Byrne said the group will “continue to call on the government to similarly rebate funds collected to date, and to ensure that rebates are delivered in a way that is equitable and administratively simple.”

The Canadian Horticulture Council (CHC) said it was “disappointed” in agriculture funding seen in the budget, “as it fails to adequately recognize our sector’s important role in a post-pandemic economic recovery.”

Jan VanderHout, CHC’s president and a vegetable grower in Ontario, said in a statement “we had hoped to receive more support from the federal budget.”

Horticulture producers had called for the creation of a financial protection mechanism for fruit and vegetable growers, pitching it as a no-cost solution for government that would save farm businesses.

“As Canadians continue to deal with the economic impacts of COVID-19, ensuring a stable and secure supply of fresh food remains critical,” said Rebecca Lee, CHC’s executive director.

“A greater consideration for cost certainty, through financial protection and stable business risk management programming, would go a long way to equipping our fruit and vegetable growers with the tools to survive and thrive.”

— D.C. Fraser reports for Glacier FarmMedia from Ottawa.

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Finance Minister Chrystia Freeland released the budget Monday, showing the majority of new spending will take place over three years and be largely focused on “green growth.”

“Budget 2021 announces the government’s intention to return a portion of the proceeds from the price on pollution directly to farmers in backstop jurisdictions (currently Alberta, Saskatchewan, Manitoba and Ontario), beginning in 2021-22,” Freeland’s budget documents said.

Farmers are expected to receive roughly $100 million in the first year, and “returns in future years will be based on proceeds from the price on pollution collected in the prior fiscal year, and are expected to increase as the price on pollution rises.”

Further details are expected to be released later this year. Some of the provinces currently subject to the federal backstop have recently signalled intent to design their own carbon pricing schemes, meaning producers in those provinces wouldn’t be eligible for the federal payments.

Budget 2021 also extends funding for the Agricultural Clean Technology Program. The $25-million, three-year investment launched in 2018 is to be replaced by a $165 million allocation as the program continues to expand.

According to the budget, $50 million is being prioritized for the purchase of more efficient grain dryers for farmers.

“These initiatives will help farmers transition to lower-carbon, more fuel-efficient ways of farming,” it said.

Freeland’s “green and clean” budget hails farmers as “major players in Canada’s fight against climate change.”

“The agricultural sector has the potential to scale up climate solutions, many of which are already underway across the country,” the budget said.

An additional $200 million over two years is being added to the Agricultural Climate Solutions program, which will “will target projects accelerating emission reductions by improving nitrogen management, increasing adoption of cover cropping, and normalizing rotational grazing.”

That funding will kick in during the 2021-22 fiscal year.

Ottawa also plans to allocate $60 million over the next two years from the Nature Smart Climate Solutions Fund to “target the protection of existing wetlands and trees on farms, including through a reverse auction pilot program.”

A consultation process for carbon border adjustments will also be announced in the coming weeks, Freeland announced.

“This consultation process will begin in the summer with targeted discussions, including with provinces and territories, importers, and exporters — especially those who deal in emissions-intensive goods. The broader public will be engaged this fall,” the budget said.

“Throughout this process, the government intends to continue its international engagement with like-minded partner.”

Because Canada’s Clean Fuel Standard is expected to reduce greenhouse gases by more than 20 megatonnes in 2030, the government is spending $67.2 million over seven years to implement and administer it.

“This standard creates new economic opportunities for Canada’s biofuel producers, including farmers and foresters, who are part of the diverse supply chain for low-carbon fuels. Making this investment now will secure Canada’s future competitiveness in the global transition to a low-carbon economy,” it said.

The government’s spending plans also account for $292.5 million over seven years in compensation to Canada’s supply managed sectors for the CETA and CPTPP trade deals.

The budget confirms a program supporting temporary foreign workers is being extended into 2021-22 to assist with costs associated with COVID-19 and mandatory isolations. It will then be slowly eliminated.

Another $57.6 million is being spent to extend the program, which offers up to $1,500 per worker in isolation until June 15 this year.

“If workers are required to quarantine at a government-approved facility, due to a lack of suitable facilities at their employers’ facilities, employers can receive up to $2,000 per worker for costs associated with mandatory isolation requirements,” the budget said.

After June 15, employers will be able to receive $750 per worker “until the wind-down of the program” on Aug. 31.

Following this, the government intends to phase out the program, but “will consult with employers on the transition to ensure that migrant workers are similarly compensated through their quarantine period by their employers.”

Over six years, the government plans to spend $1 billion on the Universal Broadband Fund “to support a more rapid rollout of broadband projects in collaboration with provinces and territories and other partners.”

— D.C. Fraser reports for Glacier FarmMedia from Ottawa.

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Finance Minister Scott Fielding’s budget, released Wednesday, calls for about $248 million in education tax rebates in 2021 alone for about 658,000 property owners.

Owners of Manitoba residential and farm properties in 2021 can expect a rebate of 25 per cent on education tax paid in 2021, while owners of other types of properties will get a 10 per cent rebate. In 2022, the rebate for residential and farm properties will be raised to 50 per cent.

The rebate is to be based on the school division special levy and community revitalization levy before the Education Property Tax Credit Advance, the province said.

Property owners eligible for the rebate will continue to pay education property taxes but will get their rebate cheques in the same month that municipal property taxes are due, or earlier, the province said. The province will send out the new rebate automatically, thus property owners will not need to apply to receive it.

The rebate will also mean a proportionate 25 per cent cut in Manitoba’s existing school tax offsets in 2021 — and that includes the current farmland school tax rebate, as well as the education property tax credit and advance, seniors’ school tax rebate and seniors’ education property tax credit.

Thus, the existing farmland school tax rebate — which in 2020 rebated eligible landowners up to 80 per cent of the school tax owing on their farmland, to a maximum of $5,000 — will instead rebate up to 60 per cent of school tax owing in 2021, to a maximum of $3,750.

In its budget documents, the province gave an example of a farm property with $5,600 owing from a school division special levy. In 2020, the province’s farmland school tax rebate would apply on $4,480 of that amount and the landowner would owe a net special levy of $1,120.

In 2021, the same landowner would get a rebate cheque for 25 per cent of the total levy, or $1,400, and he/she/they will still have to apply to receive the farmland school tax rebate, which would be proportionately cut by 25 per cent, to $3,360.

The landowner would thus owe a net special levy of $840 for 2021, down 25 per cent from its 2020 level.

The planned phase-out will also include a 2020 education property tax freeze, the province said Wednesday.

Residential properties eligible for the rebate will include single dwelling units, condos and multiple-unit dwellings, the province said. Property owners who get the new rebate on the community revitalization levy and also get a provincial tax increment financing grant will have their grant reduced by the amount of rebate.

Properties that are exempt from education property taxes, or that pay grants in lieu or payments in lieu of taxes, will not be eligible for the new rebate.

Owners of “other” properties, such as commercial, industrial, rail, pipeline or designated recreational land, will only get rebates at the 10 per cent level as they also can expect help from “significant” business tax measures in the 2021 budget, as well as pandemic-related business support programs, the province said. Also, the province noted, education property tax remains a tax-deductible expense for businesses.

The rebate announcement brings an early start to a 2019 campaign pledge from Premier Brian Pallister’s Progressive Conservatives. At the time, the party promised to phase out education taxes on property over 10 years, or sooner, starting in 2022.

In last October’s throne speech, the government said it would instead begin the phase-out process in 2021, but didn’t give details at the time.

Manitoba, the government said Wednesday, is “currently the only province that utilizes locally-determined municipal school property taxes to fund its education systems.”

Phasing out education property taxes, the province said, will “modernize Manitoba’s tax structure and put Manitobans on an equal footing with other provinces that fund education from general revenues.”

Funds, bonds, scholarships

Overall, the province’s 2021-22 budget projects $17.838 billion in revenue against $18.255 billion in spending, for a net budget deficit of $1.597 billion in the fiscal year.

New spending of interest to farmers in the budget also includes:

• increasing the Conservation and Climate Fund by $400,000, to $1 million, to fund projects that reduce greenhouse gas emissions;
• a new $1 million Organics Green Impact Bond to divert organic waste from landfills;
• raising Watershed Districts Program funding to nearly $6 million; and
• $1 million for a new 4-H Manitoba Scholarship Program, working with the Brandon Area Community Foundation and Manitoba 4-H Council to set up an endowment fund that’s expected to support $42,000 in scholarships per year, starting in 2021.

— Glacier FarmMedia Network

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