The Ontario government has balanced its budget for the first time in since 2008 — but Thursday’s budget contained little news for agriculture and rural Ontario.
Finance Minister Charles Sousa’s budget mostly highlighted agriculture programs that had already been announced, and maintains $100 million in funding for the provincial Risk Management Program, which helps offsets low commodity prices and rising production costs, mainly targeted at grains and oilseeds, horticulture and livestock producers.
“In this budget, we maintained our commitment to helping Ontario farmers manage risk,” Agriculture Minister Jeff Leal said Thursday. “That is why our government increased spending in business risk management programs to address the dry weather conditions experienced in several parts of the province in 2016.”
The 2017 budget increases funding for the provincial agriculture, food and rural affairs ministry by $33 million, to $949 million, versus the budget for 2016. The ministry spent $971 million in 2016, because of extra drought-related production insurance payouts.
The budget also announced plans to set up a framework giving municipalities flexibility to support on-farm processing and retail activities through lowering property taxes.
The goal is to encourage economic viability for such on-farm ventures, Leal said. Some farmers have been shocked by the increases in their property assessments for on-farm further processing or retail facilities.
Keith Currie, president of the Ontario Federation of Agriculture (OFA), said the on-farm value-adding tax flexibility is a good step, but it will only affect a small proportion of farms.
The OFA was looking for more investments in rural infrastructure in the budget.
“Overall we’re disappointed,” says Currie. “There’s a lack of investment in rural Ontario. It’s discouraging and we are looking to the government to make strategic investments in rural Ontario as a whole, not just the agriculture industry.”
Currie pointed to the recent federal budget, which highlighted agriculture and agri-food as one of the main engines for economic growth in the country.
“We were looking for a bit of a spinoff in this provincial budget recognizing the same thing. Unfortunately, that recognition isn’t there.”
The OFA has been lobbying for a long-term strategic investment in natural gas expansion in Ontario. Currie says that $75 million per year over 20 years would have a billion-dollar impact back to the provincial budget through increased economic growth and tax revenues.
Thursday’s budget includes a $100 million grant program to help municipalities, business and farms take advantage of natural gas.
The new grant program, the province said, “will support the building of infrastructure to expand access to natural gas to areas currently underserved, including rural, northern Ontario and First Nation communities.”
“We’ll take what we can get,” Currie said, but added that money will not get new gas trunk lines to new parts of the province.
The government also highlighted the already-announced reduction of 25 per cent in electricity rates for rural residents and Ontario farms, and its $19 million Greenhouse Competitiveness and Innovation Initiatives designed to help the greenhouse sector invest in energy efficient technologies.
Currie said the OFA appreciates initiatives like the reduction in electricity rates for those who pay more for distribution, but it doesn’t solve the long-term problems of expensive electricity in the province.
The province, in Thursday’s budget, said it’s also proposing to expand its Industrial Conservation Initiative (ICI) program, cutting the eligibility threshold from one megawatt (MW) down to 500 kilowatts (kW) for “targeted manufacturing and industrial sectors, including greenhouses.”
The ICI is meant to offer incentives to certain electricity users to shift consumption to off-peak hours.
The budget also proposes amendments to the provincial Fuel Tax Act regarding tax-exempt coloured fuel, which is restricted to use in certain unlicensed machinery such as farm, forestry, railway, marine and mining equipment and as heating fuel.
The amendments would add a new category of registered dyers who would be allowed to dye biodiesel that hasn’t been blended, mixed or combined with any other type or grade of fuel. To encourage biodiesel use, this new category of dyers would be exempt from the fuel transportation requirements imposed on all other registered dyers.
Other legislative amendments proposed in the budget include removing the provision in the definition of “microbrewer” that prevents a microbrewer from making beer for a beer manufacturer — but also clarifying that beer made by a microbrewer for a beer manufacturer is subject to the beer manufacturer’s tax rate.
The budget also proposes to amend the Corporations Act to allow Farm Mutual Re, Ontario’s farm mutual insurance network’s reinsurance company, to “expand and diversify its operations.”
The amendments, if passed, would allow Farm Mutual Re to insure individuals and businesses, along with its regular reinsurance business.
Ontario Premier Kathleen Wynne challenged the agriculture and agri-food sector in 2013 to create 120,000 new jobs by 2020. In its budget, the government claims 40,000 of those jobs have been created so far.
The budget billed Ontario as having “one of North America’s largest and most significant food and beverage processing sectors,” in which primary agriculture, food and beverage processing and services support over 800,000 workers and contribute over six per cent of gross domestic product.
Overall, the 2017-18 budget forecasts $141.7 billion in revenue, against $129.5 billion in program expenses and $11.6 billion in debt interest expenses, with a $600 million surplus going into reserve.
Program expenses include a new $464 million program for universal drug care for children and youth up to age 24, and a $7 billion increase in health care spending over the next three years.
Through the province’s Budget Talks initiative — which saw Ontario residents vote on funding for proposed new projects — the budget also pledged a one-time investment of $600,000 for a pilot Supermarket Recovery Program, to redistribute food to those in need and reduce food waste.
The pilot program will make grants available to food banks and “food rescue” organizations to expand their capacity to transport and store surplus perishables and prepared foods.
— John Greig is a field editor for Glacier FarmMedia based at Ailsa Craig, Ont. Follow him at @jgreig on Twitter. Includes files from AGCanada.com Network staff.