Budget has modest investments in agriculture

March 23, 2016
Written by Canadian Federation of Agriculture
March 23, 2016, Ottawa — Although the federal budget contained modest investments for Canadian agriculture, the Canadian Federation of Agriculture (CFA) was pleased to see support for a number of initiatives that hold significant opportunities for Canada’s agriculture sector.

“While it should be noted that recommendations made on tax transfers and compensation for Canada’s supply managed sectors following trade agreements were absent, we are pleased that the investments made touch on key elements needed to further grow and strengthen the industry,” said CFA president Ron Bonnett.
 
As Budget 2016 indicates, “the Canadian agriculture and agri-food sector is a vital part of our economy that supports both rural and urban communities across the country. At its foundation are the farmers and ranchers that work hard to feed Canada and the world.”
 
RESEARCH GETS A BOOST

Investments outlined in the budget, including those in basic research capacity, agricultural genomics, federal research infrastructure, rural broadband deployment, and Canada’s food safety system will all help support the sector’s ability to continue to provide safe, quality foods at home and abroad and fosters the exploration of new innovative technologies and best practices.
 
In addition, ambitious investments into Canada’s response and adaptation to climate change hold potential to benefit Canada’s agriculture sector, and the CFA will continue to work with the Government to ensure Canadian farmers are a part of the solution and proper incentives and considerations are made that provide the most effective on-the-ground impacts. The budget also suggests that additional agricultural research funding will be made available, and CFA is already making contact with the relevant officials in the federal government to ensure industry informs those future plans.
 
CFA'S FARM TRANSFER RECOMMENDATIONS NOT INCLUDED

The CFA was disappointed, however, to see its tax policy recommendations targeting improved flexibility in intergenerational farm transfers were left out of the budget. Despite a recommendation from the Standing Committee on Finance to commit to a review of the tax treatment of family business transfers, this area was not addressed in the budget. The CFA will continue to work on having this recommendation adopted moving forward.
 
The CFA was additionally disappointed that loopholes within the Duty Deferral Program were not addressed. This program was not meant for food, yet importers are finding loopholes and reaping benefits at the cost of Canada’s dairy, among other food products. Despite agreement on the need to specify the exclusion of supply managed goods from the program, the budget failed to do so. Moreover, mention of TPP/CETA mitigation and compensation was absent from the budget.
 
“The CFA looks forward to working with the government in finding ways to address these remaining issues, and we will continue to work closely with the government to ensure that agriculture plays a key role in meeting its priorities,” Bonnett concluded.
 
The Canadian Federation of Agriculture is the country’s largest national general farm organization. Its members include provincial general farm organizations, national and inter-provincial commodity organizations – representing more than 200,000 Canadian farmers and farm families through its members. Founded in 1935 to provide Canada’s farmers with a single voice in Ottawa, the CFA works on behalf of Canada’s farmers to ensure the continued development of a viable and vibrant agriculture and agri-food industry in Canada.
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BACKGROUNDER
 
Agriculture considerations reflected in Budget 2016 include:
 
Research
Investments to primary research and the public sector’s science capacity included in the budget is a welcomed and renewed focus from the government. To support modern agricultural science in Canada, Budget 2016 proposes to provide $30 million over six years, to Agriculture and Agri-Food Canada in order to support advanced research in agricultural genomics.The government has also directed the Minister of Agriculture and Agri-Food to develop an approach for additional investments in agricultural science and research. The CFA believes this references the government’s election promise of $160 million over four years for an Agri-Food Value-Added Investment Fund and $100 million in research over the same four-year period.
 
Trade
While the budget did not comment in detail on trade matters specific to agriculture, the government did reiterate their continued commitment to swift ratification of the Canadian-European Union Comprehensive Economic Trade Agreement (CETA) and to consult with Canadians on the merits of ratifying the Trans-Pacific Partnership.
 
The budget also announced the government’s intention to launch public consultations on eliminating tariffs on food manufacturing ingredients other than supply-managed products. These ingredients are primarily used in the agri-food processing industry, Canada’s largest manufacturing employer and a substantial contributor to the country’s economy.
 
Labour
Although CFA pushed for significant changes to the Temporary Foreign Worker Program be included in the budget, the government has already announced its intention to review the program and recommendations this coming fall. CFA will be an active participant in this review in order to ensure the planned changes reflect the needs of Canadian producers.
 
Budget 2016 does allocate funds ($56 million) for increased processing and settlement of permanent residents, which reflects one of CFA’s asks in the pre-budget consultation, but does not specifically speak to agriculture’s role in this program. This indicates that the despite the additional investment, there is no relief from existing restrictions hindering access for lower-skilled agricultural workers. However, the budget did include a range of amendments to Employment Insurance, which should allow for improved access, increased funding for skills development and simplified job search requirements, providing assistance to producers who are looking to retain seasonal workers in some regions.
 
Food Safety
Modest investments were allocated to ensure the Canadian Food Inspection Agency (CFIA) has the means necessary to strengthen and modernize Canada’s food safety system. The CFIA will also enhance inspection activities abroad in order to mitigate food safety risks before they reach domestic markets, which reflects an ongoing ask of the CFA to have imported food to Canada held to the same standards as food produced domestically.
 
Climate Change
As was expected, climate change was a significant focus in this year’s budget. CFA was pleased to see the investment of $1 billion over four years across multiple industries for clean technologies, with agriculture noted as a likely key beneficiary. Details on the allocation of this funding will be provided in the coming months as part of the government’s Innovation Agenda and the CFA looks forward to learning of the potential benefits for the agriculture industry.

The budget also proposes $109.1 million over five years to advance the government’s domestic climate change objectives. CFA notes that any regulations developed must be done in partnership with the regulated industry in order to move towards achievable objectives.
 
To review CFA’s pre-budget consultation document, please click here.


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