The good, the bad and the ugly of Budget 2024
Federal Budget 2024 may contain limited new direct spending on agriculture, but it does note areas of “key ongoing action.”
This includes the $3.5 billion Sustainable Canadian Agricultural Partnership and the $323 million Protein Industries Cluster.
A substantial $2.4 billion injection into the development and adoption of artificial intelligence in part targets the sector. Agricultural research will also benefit from a general five-year, $1.8 billion boost to research funding grants and $825 million over five years to increase university scholarships and fellowships.
The budget commits to work on lowering costs for farmers and to protect them from climate change related expenses. Among its efforts to create “lower costs and fairer treatment for farmers,” is the allocation of $64 million for Agriculture and Agri-Food Canada “to support a $250,000 interest-free limit on Advance Payments Program loans for the 2024 program year.”
Grain Exchange spoke with three industry representatives about the pros and cons of Budget 2024. The following has been edited for length.
We asked these questions to John Barlow, Foothills MP, CPC Shadow Minister for Agriculture, Agri-Food and Food Security:
Grain Exchange: How would you describe the agricultural component of budget 2024?
John Barlow: Overall, pretty disappointing for Canadian farmers. Agriculture has been a low priority for this government. Rarely do they do sufficient consultation before they come up with policies and legislation [that] impact agriculture.
We wanted them to pass Bill C 234 in its original form, to provide financial relief to farmers and expand the exemption on farm fuels to include propane and natural gas. That was not in the budget. The changing of the capital gains tax is going to have significant impact on farm succession and retirement planning.
Overall, when you have a $1.3 trillion debt—$53 billion just to pay the interest on that debt—this is driving up interest rates or maintaining inflation. That has profound impacts on input costs for farmers, on maintaining debt payments.
GE: Are these positives for agriculture in the budget?
JB: Increasing the lifetime capital gains exemption from $1 million to $1.25 million per person, is a good start. But when you change that inclusion rate from 50 per cent, to basically 67 per cent, you give with one hand and take with the other.
GE: How could the budget have better served farmers and the ag sector?
JB: The carbon tax is a pillar of liberal policy, but you could have easily frozen the carbon tax increase. They increased it 23 per cent on April 1. Just freeze that at the $60 a tonne, not increase it to $80. That would have given some relief on input costs, especially as farmers are buying fuel, fertilizer, feed and seed [in spring].
We asked these questions to Kyle Larkin, executive director, Grain Growers of Canada:
GE: GGC has been critical of elements it says are missing from Budget 2024. Which do you believe are most pressing?
Kyle Larkin: They’re all equally pressing, but #1 would be trade-enabling infrastructure and the challenges Canada is having delivering grain products to our international customers. We’ve had significant labour disruptions at our ports and railways, which has impacted Canada’s place in the world as a predictable partner and supplier of high-quality grain. And we know a lot of our infrastructure [such as bridges, tunnels and ports] is aging. #2, Canada is falling behind internationally in plant breeding innovation as it relates to investment in research and development. That’s the main way our farmers can remain competitive but lower their environmental footprint.
GE: What positives would you note?
KL: The government committed $500 million through their clean fuel regulations for biofuel production. It sounds like good news, but the devil will be in the details.
We asked these questions to Shannon Sereda, Alberta Grains director, government relations, policy and markets:
GE: How would you describe the agricultural component of that budget?
Shannon Sereda: A lot of measures are not directed towards agriculture, but agriculture has a secondary benefit. And it doesn’t address some of the key things the industry has asked for. We wanted the interest switching provision to be included, relief on the current carbon tax for farm fuel and resources for the Pest Management Regulatory Agency.
GE: What is especially notable or surprising?
SS: This was a big opportunity to address the fact that we have a massive labour and ownership transitions upon us. They introduce a capital gains tax increase, which has a detrimental impact on farm succession planning. It’s a barrier that will shift the burden onto a generation trying to capitalize their retirement, or onto the next generation that will take on this additional tax burden.
GE: What aspects are encouraging?
SS: The government has directed funding toward solving labour issues at the ports. As an advanced payment program administrator we’re encouraged that they’ve landed at the median of $250,000, which fairly reflects the economic situation in which farmers are operating with increased input costs and inflation. But it would have been nice to see a multi-year commitment, so we could plan and improve our operations.