National business organization casts critical eye on 2015 Ontario budget

Friday, April 24, 2015

by SUSAN MANN

Ontario’s Liberal government may claim the 2015 budget builds the province up, but all it’s really doing is throwing roadblocks in the way of agri-businesses’ growth, says a Canadian Federation of Independent Business spokesperson.

Mandy D’Autremont, Canadian federation senior policy analyst, was using a play on words as the budget delivered Thursday by Finance Minister Charles Sousa at Queen’s Park in Toronto is called ‘Building Ontario Up.’ It includes spending of $130 billion over 10 years on public infrastructure, such as public transit along with construction of roads, bridges, water systems, hospitals and schools.

 “I would rename this budget all about building Ontario’s roadblocks,” she says.

The biggest roadblock announced in the budget is the government’s continued pursuit to establish an Ontario pension plan with mandatory contributions from businesses and employees, she says. The plan is to be in place by Jan. 1, 2017.

photo: Jeff Leal

The criticism surprises Ontario Agriculture Minister Jeff Leal. During a telephone interview from Hong Kong, Leal says people with adequate incomes in retirement are purchasing the goods and services produced by the federation’s members.

D’Autremont says the business federation’s members have discouraged the government from implementing the mandatory plan, with 86 per cent of small business owners surveyed by the federation opposed to it. The mandatory pension “payroll tax hike” is disguised as a “pension premium. Ultimately this is a job-killing tax that will affect agriculture and agri-food,” she says.

Instead of the mandatory payroll tax, the federation, in its pre-budget submission, requested the government look at ways to enable Ontarians to save for retirement on their own.

The federation represents small businesses with 109,000 members across Canada, including 42,000 in Ontario. It has almost 3,000 agri-business members from Ontario and 7,200 across Canada.

D’Autremont was deeply critical of the budget, saying the provincial government “missed an opportunity in this budget to instill confidence in Ontario’s job creators, including agriculture and agri-food, by completely ignoring the fear that business owners have over a devastating tax hike like this.”

But ironically, she says, there was continued mention of Premier Kathleen Wynne’s challenge to the agri-food industry to double its growth rate and create 120,000 jobs by 2020. “If farmers and other agri-business owners are planning to grow their business as the premier is challenging them to do, after (Thursday’s) budget it’ll be even more difficult for them to achieve these goals of growth,” she notes.

A federation survey of its members found the Ontario pension plan proposal would force 70 per cent of small businesses to freeze or cut staff salaries and about half to reduce employee numbers. “This would drive up Ontario’s unemployment by about 0.5 per cent,” she says.

Some other roadblocks to agri-business growth include rising regulatory burdens, continually increasing energy costs and minimum wage hikes, she says. There was mixed reaction from other agricultural industry representatives with several making similar statements to D’Autremont that “farmers were ignored throughout the document for the most part.”

photo: Don McCabe

Ontario Federation of Agriculture president Don McCabe says it was a “stand pat budget because most of the announcements have already been made.” The provincial agriculture ministry’s budget for 2015/16 is projected to be about $1 billion. That’s close to the ministry’s interim budget for 2014/15 of $924.9 million.

The agriculture federation wanted to see a reinstatement of some type of rural electricity rate program. But “I did not see a lot of relief in the budget in areas of energy for agriculture,” he says. “The natural gas assistance was just essentially a reannouncement and that program details would be worked on further.”

McCabe says he was pleased to see an additional $200 million in the budget added to the Jobs and Prosperity Fund.

photo: Karen Eatwell

National Farmers Union – Ontario president and Region 3 coordinator Karen Eatwell says the government continually emphasizes the agri-food industry’s major economic contribution to Ontario but it seems like the industry is an “after thought” in the budget. “I don’t see too much in there for agriculture.”

Progressive Conservative agriculture critic Toby Barrett agrees. The Haldimand-Norfolk MPP is currently in the middle of a tour of northern Ontario. “What concerns me with budget planning year-by-year is we never get anything laid out specifically with respect to the importance of wealth creation” by sectors such as agri-business. “This government is not there for those industries,” he notes, referring to agriculture, mining, forestry and the steel industry.

He’s also concerned about the government’s plan to move regulatory responsibility for the horse-racing sector to the Alcohol and Gaming Commission of Ontario. Currently the provincial agriculture ministry has responsibility for the sector.

“My concern with that transfer is what is that going to do for the horse industry and the hay industry?” he asks.

Leal says it makes sense to move the regulatory responsibility for horse racing to the commission because it’s responsible for gaming.

Christian Farmers Federation of Ontario president Lorne Small says “agriculture doesn’t have a very high priority right now and that’s not a surprise.”

The provincial government is planning to review agriculture programs, he notes. “I expect most of our cherished farm programs are going to get a very close look” to determine if they’re still meeting objectives needed today. But he sees the review as a positive thing.

Leal says the only program they’re reviewing is the rural economic development program.

Small also predicts the government’s plan of no wage increases for public sector workers will likely lead to labour disruptions this year and that may include provincial meat inspectors. “I also expect the government to hold firm (on no wage increases) because they haven’t got the money. The budget is pretty clear that pay raises are not in the cards.”

Grain Farmers of Ontario chair Mark Brock says the Ontario business risk management program remains in place and that’s good news. But the organization along with other farm groups have been requesting the government raise the $100 million a year cap on the program to $175 million a year with the increase taking place over three years at $25 million a year.

Grain Farmers wasn’t sure if the government was going to cut the program in this year’s budget. “There’s always concern when we get into these fiscal restraints, but with the way the budget has been released today there’s been no changes to the program,” he says.

As for increasing the cap, “we understood the fiscal restraint the government had this year” and Grain Farmers didn’t ask for the cap increase this year, he says, adding they’re requesting for next year the government consider starting to raise the cap. BF