Federal ag R+D funding booked in lame-duck budget

Farmer groups are largely positive on proposed spending for agricultural research and innovation in a federal budget that’s expected to die and send Canada into a spring election.

Federal Finance Minister Jim Flaherty’s budget, released Tuesday in the House of Commons, calls for $25 million in additional spending in each of the next two fiscal years on what’s dubbed the Agricultural Innovation Initiative.

The new program is meant “to support knowledge creation and transfer and increased commercialization of agricultural innovations” and “to ensure that Canadian producers remain on the cutting edge of science and technology,” the budget papers said.

“A sector that fails to innovate not only fails to grow, but it loses ground as competitors exploit emerging new opportunities and capture market share.”

“The benefit of research and innovation to the Canadian cattle industry cannot be overstated,” Canadian Cattlemen’s Association president Travis Toews said in a CCA release Tuesday.

Programs such as the CCA’s Beef InfoXchange System (BIXS) are an example of the kind of innovation that will lead to enhanced trade and market access opportunities, the association said.

“Farmers from across Canada have lobbied aggressively for the government to invest in this area, and they have heard us,” Grain Growers of Canada executive director Richard Phillips said in a separate release.

That said, Phillips added, “we still have a long way to go to get research funding up to a competitive level in the global market. As the fiscal situation improves and the world demand for food increases, now is not the time to neglect research.”

The Canadian Federation of Agriculture, meanwhile, agreed it’s “positive that some money is being put back into agricultural research” but added “it does not compensate for the neglect agricultural research has received over the past several years.”

Agriculture and Agri-Food Canada “has seen their total funding cut 42 per cent from an average of $4.5 billion between 2004 and 2008 to $2.57 billion for 2011-12,” CFA president Ron Bonnett said in a separate release.

“If even a fraction of this savings was reinvested into agricultural research and innovation — as has been suggested by numerous groups, including the CFA — Canadian agriculture would be well situated for another 20 years of growth.”

“Program options”

Among the other line items highlighted for agriculture in Flaherty’s budget are:

  • an extra $100 million over five years on a cash basis to the Canadian Food Inspection Agency to improve food inspection capacity by way of “targeted investments in inspector training, additional science capacity, and electronic tools to support the work of front-line inspectors;”
  • $17 million over the next five years toward a management and monitoring strategy to contain and prevent the spread of plum pox virus, a yield-robbing, fruit-damaging disease of peach, plum, apricot and nectarine trees;
  • $24 million over two years to extend the existing Initiative for the Control of Diseases in the Hog Industry, for the Canadian Swine Health Board to complete initiatives directed at national biosecurity standards and best management practices and help the industry manage diseases such as circovirus; and
  • eating a $5 million reduction in federal revenues in 2011-12 (and $1 million in 2012-13) as Quebec, starting this year, rolls out an “Agri-Quebec” program to supplement the federal/provincial AgriInvest program. Agri-Quebec, for the 2011 and subsequent tax years, is to get the same income tax treatment now provided to AgriInvest.

Federal and provincial governments also plan to seek input from the ag sector and from Canadians to help “set priorities and develop program options” for the next agricultural policy framework, Growing Forward 2, to be launched in 2013–14.

“The government will assess program options to ensure they provide effective support to the sector while remaining affordable,” the budget noted.

The GGC and CCA also hailed the budget’s commitments to continue pressing for market access for Canadian ag exports.

“It appears the government continues its strong commitment to opening markets for Canadian exports, and with our abundance of land and resources we are ready to act quickly on opportunities,” GGC president Stephen Vandervalk said in the group’s release. “In addition to India, talks are starting with Japan and should be finishing with the European Union. These are some of the largest markets in the world.”

Completion of the negotiations for a Canada-EU economic trade agreement this year is specifically noted in the budget, the CCA said, noting its support for an EU trade deal.

“Europe represents a high-value market for Canadian beef that is currently accessible by a very small quota,” the association said.

Items aimed at Canadian rural development in Flaherty’s budget, meanwhile, include:

  • extending the accelerated capital cost allowance rate for investment in manufacturing or processing machinery and equipment for another two years;
  • aiming to attract more physicians, nurses and nurse practitioners to “under-served” rural and remote communities by forgiving up to $40,000 of the federal component of Canada Student Loans for new family physicians, and up to $20,000 for nurse practitioners and nurses;
  • a $3,000 volunteer firefighter tax credit, for volunteer firefighters who perform at least 200 hours of service in their communities;
  • making all occupational, trade and professional examination fees eligible for tax relief, for trades including agricultural equipment technicians, heavy-duty equipment technicians, machinists and welders;
  • providing Environment Canada with $27 million over two years to “improve Canada’s weather services;” and
  • funding of $20.9 million to continue to waive licence renewal fees for all classes of firearms from May 2011 until May 2012.

Flaherty’s budget, according to media reports Tuesday, has been panned by all three federal opposition parties, who have indicated they’re prepared to vote against the minority Conservative government on its passage and thus force a federal election, expected sometime in early May.

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