The Federal Budget Cuts the Agriculture Budget by $300 Million

The Federal Government released its budget yesterday and agriculture definitely had to buck up its fair share of budget cuts.  According to Ag-Minister Gerry Ritz on Global Regina this morning, AgCanada has been cut $300 million in budget.  Farmer organizations seem to be playing a wait and see approach as more details develop.  Ritz stated on Global this morning that this budget focuses on innovation and jobs so below is a summary

Following is a very brief summary on first review of the 2012 Federal budget

  • Increase funding for research and development by small and medium-sized companies.
    • $500 million over five years, starting in 2014–15, to the Canada Foundation for Innovation to support advanced research infrastructure.
    • $12 million per year to make the Business-Led Networks of Centres of Excellence program permanent.
  • Promote linkages and collaborations, including funding internships and connecting private sector innovators to procurement opportunities in the federal government.
    • $24 million over two years and $12 million per year thereafter to make the Business-Led Networks of Centres of Excellence program permanent.
  • Refocus the National Research Council on research that helps Canadian businesses develop innovative products and services.
    • $67 million in 2012–13 as the National Research Council refocuses on business-led, industry-relevant research.
  • Enhance access to venture capital financing by high-growth companies so that they have the capital they need to create jobs and grow.
    • $400 million to help increase private sector investments in early-stage risk capital, and to support the creation of large-scale venture capital funds led by the private sector.
  • Streamline and improve the Scientific Research and Experimental Development tax incentive program, including shifting from indirect tax incentives to more direct support for innovative private sector businesses.
    • This is not good news for the tax incentive proposal.   The budget says ” Canada has an over-reliance on tax incentives in the mix of federal support for business research and development compared to direct expenditures that support innovative firms and public-private research collaborations.    The budget promises to phase out a number of tax credits in the natural resources, mining and oil and gas sectors
    • Instead the government is committing $1.1 billion over five years for direct research and development support and making available $500 million for venture capital.
    • Specific to the Scientific Research and Experimental Design (SR&ED Tax Credit):
      • The SR&ED tax incentive program will be substantially changed by removing capital from the expenditure base
      • The administrative policies that are currently contained in about 70 documents pertaining to the SR&ED tax incentive will be consolidated and clarified by December, 2012. Support research, education and training with new funding for universities, granting councils and leading research institutions, such as Genome Canada.
  • $60 million for Genome Canada to launch a new applied research competition in the area of human health, and to sustain the Science and Technology Centres until 2014–15.
  • There will be a focus on direct funding for research chairs and the improvement and expansion of university and academic institution research infrastructure
  • $44 million over two years to transition the Canadian Grain Commission to a sustainable funding model
  • The Government will bring forward legislation to implement system-wide improvements to achieve the goal of “one project, one review” in a clearly defined time period.
  • $51.2 million over the next two years for the Canadian Food Inspection Agency, the Public Health Agency of Canada and Health Canada to enhance surveillance and early detection and improve response capabilities to food-borne illness. The Government is also pursuing complementary activities to strengthen Canada’s food safety system, including plans to streamline and accelerate the process by which foods are regulated.

Responsible Spending

Departmental Savings will be achieved by:

  • Streamlining and consolidating administrative functions
  • Eliminating red tape
  • Eliminating programs that can be delivered in other ways
 

Shaun Haney

Shaun grew up on a family seed farm in Southern Alberta. Haney Farms produces, conditions and retails wheat, barley, canola and corn seed. Shaun Haney is the founder of RealAgriculture.com. @shaunhaney

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One Comment

Beverly Dahl

Hello, Shaun,
I enjoy reading your posts. Today a farmer called me to ask who owns the PFRA pastures, as he understands the federal government plans to cease operating the pastures and sell the land. Can you comment on whether this is a valid interpretation?

Crown Land administered by the province and leased to the PFRA could continue as community pasture operated by a provincial body, was my reply. However, disposing of the Crown Land by selling to private purchasers, was the concern this person expressed.

I’m employed by a Saskatchewan municipality.

Beverly Dahl

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