Ontario budget leaves RMP program commitment as-is

Friday, February 26, 2016

by SUSAN MANN

The provincial government has declined to increase the Ontario business risk management program cap in its 2016 budget as requested by commodity groups, but Ontario Agriculture Minister Jeff Leal says there’s an opportunity to get federal funding for the program.

The Ontario Agriculture Sustainability Coalition (OASC), whose representatives include Grain Farmers of Ontario, Beef Farmers of Ontario, Ontario Pork, the Ontario Sheep Marketing Agency and Veal Farmers of Ontario, had requested in its pre-budget submission the government raise the $100 million annual cap by $25 million a year over three years. The coalition wanted the first increase to kick in this year.

The coalition was formed in 2009 to develop and implement the Ontario risk management program with the provincial government.

Mark Brock, chair of Grain Farmers of Ontario, says they’re happy to see the program still get support in the budget. “I think we’re disappointed we didn’t see the additional $25 million that we were asking for. We had put a lot of effort into it (requesting the increase) over the past little while in meetings with elected officials and the bureaucracy to talk about the value of the program.”

Brock says OASC isn’t giving up and plans to request the increase as part of the next budget.

Other government risk management programs, such as AgriStability, AgriInvest and production insurance, are funded through a cost-sharing agreement between the federal and provincial governments, with Canada paying 60 per cent and the province paying 40 per cent. The Ontario business risk management program only gets a 40 per cent contribution from the provincial government. The Conservative federal government, in place before the 2015 election when the Liberals won a majority, had declined to contribute any funds to it.

But that could change, Leal says. He notes he’s very pleased “that within my budget we’ll retain the $100 million for the risk management program.”

Leal says he met with federal Agriculture and Agri-Food Minister Lawrence MacAulay in Ottawa in November. “We believe there’s an opportunity with Growing Forward 3, with negotiations commencing this calendar year, to finally bring the federal government on board to make it a whole program for Ontario farmers and the federal government contributing their 60 per cent share.”

Leal says they will “continue to press this and we believe we have a great window of opportunity with the new minister.”

Brock says “we’re all encouraged to see discussions around business risk management programs in the agricultural policy framework.” However the federal government is still fairly new, and he says farm leaders just don’t know yet what its “appetite is to delve into the realm safety net programs.”

Growing Forward is Canada’s national policy framework for the agricultural sector. The current set of programs under Growing Forward 2 began in 2013 and run until 2018 so it could be two years before Ontario farmers get any federal funding under the business risk management program, if the federal government agrees to fund it.

The $100 million annual cap on the Ontario business risk management program has been in place since 2013. The coalition has argued the existing funding levels don’t adequately meet the program’s needs.

The risk management program for grains and oilseeds began as a pilot in 2007 and was turned into a permanent program in 2011 when the permanent programs for beef, hogs, sheep and veal and the self-directed risk management program for edible horticulture were launched. Developed by the commodity groups, the risk management programs work like insurance to help farmers offset losses caused by low commodity prices and rising production costs. Participants pay premiums based on their annual anticipated sales and chosen coverage levels.

For self-directed risk management there aren’t any premiums. Farmers deposit funds into an account with Agricorp and that money is matched by government up to a maximum based on farm sales. The program helps growers cover various farm risks.

Conservative agriculture critic Toby Barrett, the MPP for Haldimand-Norfolk, was critical of the government for failing to raise the risk management program cap, introducing a 4.3 cents a litre gasoline tax as part of its cap and trade system on greenhouse gas emissions, failing to bring in a electricity rate for farm businesses and continuing with its commitment to introduce the Ontario Retirement Pension Fund. Incorporated farm businesses and their employees will be required to make payments as part of the fund and “that’s a four per cent hit,” he says.

Barrett says he’s heard from many farmers and small business owners who find the proposed pension plan and soaring electricity rates burdensome and are ready to call it quits.

Barrett also lambasted the government for ignoring agriculture in the budget, something it has done, he says, year after year.

Leal disagreed agriculture was ignored in the budget. He says he’s been an MPP for almost 13 years and this is the first time that he can recall, “agriculture had multiple mentions within the budget document.”

Barrett also says the Ontario Ministry of Agriculture, Food and Rural Affairs budget was cut to $916 million from $943 million. However, Leal says “the way to look at this is to look at the results that we’re getting from our investments. When you look at Ontario’s agriculture sector, we’re helping to lead the way in jobs and growth and allowing my colleague, (Finance Minister Charles Sousa) to reach his deficit targets. That’s good news for Ontario.”

In a Thursday news release that followed the budget announcement, Barrett criticized the decision not to renew the Local Food Fund. A ministry spokesperson has previously indicated there were no plans to renew the three-year $10 million fund that was launched in 2013.

Asked if there were any program cuts within OMAFRA because of the budget cut, Leal says, “we’ll continue with our full suite of programs.”

About expanding natural gas infrastructure in rural Ontario, something the Ontario Federation of Agriculture has requested, Leal says “we put in the budget the timeframe for moving ahead with the natural gas initiative in Ontario.” The expansion of the natural gas infrastructure in rural Ontario “will be moving forward in this calendar year.”

The government also made a commitment to review the tax treatment for on-farm value-added activities. “This is a great leap forward in terms of property taxation for our farmers in Ontario,” he says.

Leal notes the government is spending $3 million over the next four years in the bio-economy through the Investment in the Bio-Industry Innovation Canada program.

One major announcement of interest to the agricultural industry is the introduction of a regulation to implement a cap and trade system on greenhouse gas emissions. The system will operate under the Western Climate Initiative with Quebec and California, says a spokesperson for Clean Energy Canada, a climate and energy think tank.

Don McCabe, Ontario Federation of Agriculture, and Clarence Nywening, Christian Farmers Federation of Ontario president, couldn’t be reached for comment. BF