Minister clarifies RMP cap

Thursday, April 19, 2012

by SUSAN MANN

The provincial government’s spending on the risk management program for this crop year will depend on the demand for it, says Ontario Agriculture Minister Ted McMeekin.

“However the program has been set up, whatever unfolds we’ll meet that cost,” he says. McMeekin was responding in an interview to an open letter from Progressive Conservative agriculture critic Ernie Hardeman questioning if the risk management program is capped at a $100 million for the 2012 crop year.

No it is not, McMeekin says. The first year of the program-spending cap will be 2013.

McMeekin says he told Hardeman that in a private meeting last week. “I gave him the same answer that I would give him today. The plan as presented for 2012 remains intact.”

The agriculture minister says he thinks $100 million will be enough to cover program demand this year “but if it goes over we’ll cover that in 2012.”

For the 2011 production year, the first year of the permanent program, the payout was about $105 million, McMeekin’s press secretary Mark Cripps says by email. The program will run as designed for 2012 so the payout will be production driven, meaning it could be $80 million, $150 million or more.

Hardeman says in his letter the 2012 provincial budget released last month says that in the 2011 budget, about $100 million of taxpayer support was committed net of producer premiums. “The commitment remains to support the program up to a maximum of $100 million,” it says in the budget document.

Hardeman says he interprets the words “up to a maximum of $100 million” in the budget as a cap. “It seems to me quite clear that the Minister of Finance (Dwight Duncan) was capping the expenditure of the program in 2012 at a maximum of $100 million.”

Using the word ‘maximum’ means they won’t spend any more than that and that’s what a cap is, Hardeman says.

There’s no mention in that section of the budget of the cap starting in 2013, he adds.

The budget document also says given the province’s fiscal challenges the Ontario government will work with farmers to redesign these programs to focus on supporting productivity while capping the overall program at sustainable levels to manage taxpayers’ exposure and leverage federal dollars.

Cripps says in the addendum to the budget, under the section for the agriculture ministry titled “rethinking business risk management” there’s a dash under the 2012/13 column, “which means the program has no retraction” in that year.

Cripps says the redesigned program is supposed to be in place for the provincial government’s 2013/14 fiscal year and that’s when the $100 million cap will kick in. BF