News
The budget: more questions than answers

Jan. 30, 2009 — Crafting a budget to meet the needs and wishes of 30
million Canadians has to be an enormous undertaking. Based on the
comments reported by the media following the release of the 2009
federal budget, Finance Minister Jim Flaherty managed to satisfy about
as many as he disappointed.

Jan. 30, 2009 — Crafting a budget to meet the needs and wishes of 30 million Canadians has to be an enormous undertaking. Based on the comments reported by the media following the release of the 2009 federal budget, Finance Minister Jim Flaherty managed to satisfy about as many as he disappointed.

Some of the good news for farmers came in advance of the budget when the government announced it would extend the deadline to September 30, 2010, for the repayment of cash advances provided to beef and hog producers. Another positive part to that announcement was the news that the first $100,000 of each producer’s advance will continue to be interest free.

Pork producers will enjoy similar treatment – breathing room from repayment of cash advances from regular and emergency loans. This ‘Stay of Default’ covers more than $450 million to the Canadian livestock sector.

Because farmers rely heavily on all types of infrastructure to make their farming operations run smoothly, the budget announcement of millions of dollars of infrastructure funding will mean a lot for everything from telecommunications to transportation improvements. Unfortunately, the effectiveness of this initiative will depend on the abilities of local municipalities to provide matching dollars.

The OFA is pleased to see our efforts to get these extensions did not fall on deaf ears.

The budget announcement of a Business Development Agency for southern Ontario is expected to provide a real boost. As agriculture is the second largest industry and third largest employer, the mandate of the agency must include opportunities for food processing facilities and projects involving the production of on-farm renewable energy and bio products.

Agriculture has the capability to offer solutions to governments through such initiatives as fresh foods for the buy-local consumers, reduced energy costs, and a long list of environmental goods and services agriculture provides to society.

Proposed changes were announced to legislation covering farmers’ co-operatives that will make it more attractive for new and beginning farmers to get into the industry. This is something OFA has long sought from government to allow renewal in the ag industry.

However, it wasn’t all good news for agriculture.

Of the $500 million over five years mentioned for AgriFlex, only $190 million of that was new money with the balance to come from budget cuts to existing Agriculture and Agri-Food Canada programs. Also, the government missed the definition of the program that the OFA and CFA lobbied for. This money cannot be used for safety net programs.

The budget announcement of $50 million for meat processing projects is double-edged. While investment in meat processing is sorely needed and welcomed, the government expects local matching dollars to be invested before the government funds become available. This may prove to be an investment that cannot be realized.

Farmers across Canada were hopeful the budget would bring the news that two cents per litre was being dropped from the federal excise tax on diesel fuel used for farming – an election promise. This didn’t materialize, so that tax will continue to drain much needed resources from agriculture’s limited supply of cash.

A long list of burdensome regulations that impede a farmer’s ability to farm free of red tape was left in place – giving farm organizations like OFA and CFA a future agenda. We will also be seeking clarification to a number of issues prompted by this budget.