After enjoying headline status last year, the agri-food sector found itself once again on the back burner in the 2018 federal budget.
There was none of the bold talk of 2017, when the agri-food export target of $75 billion by 2025 was set.
Ron Bonnett, president of the Canadian Federation of Agriculture, said that while the new budget includes moderate investments that will support the agricultural sector, it doesn’t set the stage for meeting the government’s own professed goal of growing the sector.
“The government hasn’t directly followed up on the vision from last year’s budget, which set ambitious targets to grow the industry for the benefit of all Canadians,” said Bonnett.
CFA had proposed a range of strategic options to the government to expand the sector’s profitability and competitiveness but noted the sector received relatively few mentions in the minister’s speech and budget plan.
“We will continue to monitor the activities of Canada’s agri-food economic strategy table and other key initiatives launched in 2017 to ensure the $75-billion export target for agri-food and other growth targets are realized,” Bonnett said.
Jeff Nielsen, president of the Grain Growers of Canada, said it too was concerned about the lack of action on key priorities for farmers.
“Budget 2017 established an ambitious target to increase agri-food exports to $75 billion by 2025 but Budget 2018 did little to deliver on it and other priorities for the sector,” he said.
“Grain farmers welcome the budget’s commitments on trade, regulatory reform and tax changes. However, these commitments are baby steps at a time when a giant leap is needed.”
In a media release GGC said it looked forward to better understanding upcoming regulatory reforms, small-business tax changes, the Low Carbon Leadership Fund and the changes to the Canadian Food Inspection Agency. Nielsen added that grain farmers are waiting on Ottawa on several fronts.
“What farmers want to see are ratification of the Comprehensive and Progressive Trans-Pacific Partnership before Parliament breaks for summer, the launch of free trade negotiations with China and the passage of Bill C-49 to secure a rail transportation system that works,” he said.
GGC is also disappointed that $100 million earmarked for funding for Agriculture and Agri-Food Canada programs for 2018 will go unspent, he said. The organization “looks forward to more details on the impact this will have on farmers across Canada and on what opportunities may be missed to promote the growth of the rural economy.”
The Western Canadian Wheat Growers Association offered a blunter reaction. President Levi Wood said the WCWGA “was appalled that the 2018 federal budget contained nothing for agriculture. Grain growers alone contribute over $30 billion to the Canadian economy and the federal government has chosen to ignore this major contribution.
“Ignoring the farming community is something that farmers are used to but refuse to accept,” Wood said. “Canadian farmers are amongst the most competitive and efficient in the world. Farmers are productive and successful small businesses and the federal government hasn’t even recognized them in the 2018 budget.”
He added if the federal government really wanted to help farmers, it would remove trade barriers and ensure they can move products to market, rather than face transportation delays that cost them both time and income.
There could be a consolation prize in the budget’s support for science and innovation. Serge Buy, president of the Agriculture Institute of Canada, said some measures announced in the budget don’t directly mention agriculture “but they could have an impact.”
The science announcements included a $540-million increase in funding for the National Research Council and additional support for training of researchers, creation of a new tri-council fund to support research that is international, interdisciplinary, fast breaking and higher risk, a longtime AIC request.
The Canada Research Chair Program will receive an additional $210 million over five years, which could result in an additional 250 research chair positions for early-career researchers by 2020-21. The Canadian Foundation for Innovation will receive $763 million over five years to attract more researchers and students. The government will also fund construction of multi-purpose, collaborative, federal science and technology facilities to bring federal scientists and science facilities together including those of AAFC. Expansion of rural broadband is due to receive an additional $100 million during the next five years and Farm Credit Canada will offer lending programs aimed at women entrepreneurs in agriculture and agri-food.
Bonnett said CFA was pleased to see more access to capital for women entrepreneurs as well as commitments to modernize regulatory systems, recognize innovation and support the pursuit of new markets.
While the budget contained more information on small-business tax reforms and changes regarding passive investment incomes, “more time is needed to review the legislation with more scrutiny,” Bonnett said.
Two reviews of the budget by former cabinet ministers found it hadn’t focused on the fundamental issues facing Canada’s economy.
Perrin Beatty, president and CEO of the Canadian Chamber of Commerce and a minister in the former Mulroney government, said the budget came up short on dealing with Canada’s growing competitiveness gap, the need to attract more private sector investment and presenting a realistic plan to balance the government’s books.
“The cost of running a business in Canada is rising rapidly. Without a strong private sector, there’s no way to pay for all this spending, except by sending the bill to our kids,” he said.
John Manley, president and CEO of the Business Council of Canada and a minister in the Jean Chretien government, said the government “missed an opportunity to shore up Canada’s eroding competitiveness and improve the country’s ability to attract jobs and new investment.
“The budget’s title is ‘Equality + Growth,’ but on the growth side the government’s agenda is disappointingly thin,” he said. “Nowhere in the budget’s 367 pages is there even a passing acknowledgment of the fact that Canada faces an intense fight internationally for investment, jobs and talent.”
Over the last two months, business groups and a wide range of economic commentators have urged the government to respond to recent U.S. corporate tax reforms, which for the first time in many years have given the United States a significant competitive edge over Canada.
Yet the budget includes only a single brief mention of U.S. tax cuts, buried deep in an annex on the domestic and global economic outlook. It says that “over the coming months, Finance Canada will study the U.S. reforms to assess any potential impacts on Canada.”