Newfoundland, in cost-cutting mode, scraps agrifood fund

Confederation Building, St. John’s, N.L. (

A fund meant to support large-scale agrifood projects in Newfoundland and Labrador is a victim of spending cuts in the province’s latest budget.

Finance Minister Cathy Bennett on Thursday mapped out an overall $8.48 billion provincial budget for 2016-17, with an expected deficit of $1.8 billion and a list of “measures to reduce spending.”

For the province’s ag sector — where public program spending is overseen by the Forestry and Agrifoods Agency, an arm of the fisheries and aquaculture ministry — those cuts will include the elimination of the Agriculture and Agrifoods Development Fund (AADF).

The AADF was set up in the 2006 budget, during Danny Williams’ Progressive Conservative administration, “to support large-scale agriculture and agrifoods projects throughout our province” in either primary or secondary processing.

The fund was to put priority on support for projects that “enhance competitive capability, support commercialization, expand market opportunities and create economic growth and employment in the agriculture and agrifoods industry.”

Ending the AADF, the province said Thursday, is a reflection of “low uptake for services (and/or) low demand for programming.”

Bennett’s budget calls for the AADF to be eliminated and its funding phased out over four years. The fund, which had been budgeted for $4 million in its first year, had $2.55 million earmarked for 2015-16.

Wrapping up the AADF is expected to save the province $1.05 million in 2016-17 and up to $2.55 million per year once the phase-out is complete, the province said.

The Forestry and Agrifoods Agency, which was budgeted for $62.65 million in 2015-16, will see $4.44 million in “line-by-line” cuts and “other operational savings” in 2016-17. The agency cuts planned Thursday are expected to save $4.065 million per year in future budgets.

New spending for the ag sector in Bennett’s budget includes $60,000 to hire a “funding co-ordinator” for the Newfoundland and Labrador Federation of Agriculture.

The budget also commits the province to develop a new “food security and agriculture growth strategy.”

Pesticide vendors and applicators will also see the fees hiked for their five-year licenses, starting June 1, including commercial pesticide operators (to $750, up from $500), commercial pesticide vendors (to $375, up from $250) and domestic pesticide vendors ($250, previously free).

Among other tax hikes, the harmonized sales tax (HST) will rise to 15 per cent, up from 13, effective July 1, and gasoline and diesel taxes will rise 16.5 and five cents per litre respectively, effective June 2. The gasoline tax hike was described as temporary and subject to review ahead of the province’s supplemental budget this fall.

Also, a new rebate of 10 cents per litre will be provided on gasoline used in the Labrador border zones (Labrador West, Southern Labrador) effective June 2.

Among income taxes, personal income tax rates will rise effective July 1; the general corporate income tax rate is 15 per cent, up one per cent, retroactive to Jan. 1; and a “temporary deficit reduction levy” based on taxable income, will be imposed effective July 1. — Network

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