Climate and COVID-relief programs headline agriculture spending in federal budget


Billions of dollars for childcare, COVID relief programs, and new climate initiatives headlined the federal government’s first budget in more than two years, read by Deputy Prime Minister Chrystia Freeland in the House of Commons on Monday.

The 739-page document outlines the Liberal government’s many spending priorities as it expects to rack up an unprecedented $354 billion deficit in 2020-21 and a $155 billion deficit in 2021-22.

The list of big ticket spending pledges includes $30 billion for childcare over the next five years, which is supposed to lower average childcare costs for parents across Canada to $10/day by 2025.

Employers will have access to a new $595 million Canada Recovery Hiring program to bring back workers this summer and fall, while existing COVID relief programs, such as the wage and rent subsidies, have been extended. The budget also includes a $15/hr minimum wage for federally-regulated industries.

On the climate front, Freeland promised billions of dollars for programs aimed at helping the federal government reach its greenhouse gas emissions reduction targets, including the launch of new “green” bonds, a $5 billion net zero accelerator fund, and $4.4 billion for an interest-free loan program to help Canadians retrofit their homes to be more energy efficient. Consultations will also be launched in the coming weeks on implementing carbon border adjustments, said Freeland.

Speaking of GHG emissions reductions, the government took the opportunity to announce a new, more ambitious emissions reduction target of 36 per cent below 2005 levels, up from 30 per cent previously.

Most of the references to agriculture in the budget were in the context of climate policy and the pandemic recovery. The following list covers the main points:

  • Grain drying carbon tax returns — the government says it intends to return “a portion of the proceeds from the price on pollution” directly to farmers in jurisdictions where the federal carbon tax backstop is in place (currently Alberta, Saskatchewan, Manitoba, and Ontario), beginning in 2021-22. The budget does not say what percentage will be refunded, but the government says it estimates farmers would receive a total of $100 million in the first year. “Returns in future years will be based on proceeds from the price on pollution collected in the prior fiscal year, and are expected to increase as the price on pollution rises,” says the budget. Further details will apparently be announced later in 2021 by the finance minister.
  • $50 million in the previously-announced-and-expanded $165.5 million Agricultural Clean Technology Program will be prioritized to help farmers buy “more efficient” grain dryers.
  • $200 million over two years starting in 2021-22 to launch immediate, on-farm climate action under the Agricultural Climate Solutions Program. This will target projects accelerating emission reductions by improving nitrogen management, increasing adoption of cover cropping, and normalizing rotational grazing.
  • $60 million over two years, from the Nature Smart Climate Solutions Fund to target the protection of existing wetlands and trees on farms, including through a reverse auction pilot program.
  • $10 million over the next two years, from the Agricultural Clean Technology Program, toward powering farms with clean energy and reducing the use of diesel on farms.
  • Clean Fuel Standard implementation — $67.2 million over seven years to implement and administer the Clean Fuel Standard, starting in 2021-22.
  • The government intends to launch a consultation process on carbon border adjustments in the coming weeks, with public consultations to be held this fall.
  • Not an agriculture-specific measure, but the budget outlines a temporary “immediate expensing” measure for certain capital purchases by Canadian-controlled private corporations, up to $1.5 million per year. More details are needed to determine how this may impact farm capital purchases, and whether it will apply to machinery and grain bins.
  • $101 million over two years starting in 2022-23 to have Agriculture and Agri-Food Canada implement a program for the wine sector that will support wineries in adapting to ongoing and emerging challenges, in line with Canada’s trade obligations.
  • $292.5 million over seven years, starting in 2021-22, to help processors of all supply-managed agricultural products adapt to the CETA and CPTPP trade deals. (Previously-announced compensation was directed toward producers.)
  • Another $1 billion over six years for the Universal Broadband Fund, to support access to high-speed internet by Canadians in rural and remote communities, which the government says will put it on track to achieve its 98-per-cent high-speed coverage initiative by 2026.
  • $21 million over three years, starting in 2021-22, to boost internal trade between provinces, including enhancing the capacity of the Internal Trade Secretariat.
  • $1.9 billion over four years, starting in 2021-22, to recapitalize the National Trade Corridors Fund — money that could potentially go to ports and other infrastructure used for agricultural exports.
  • $38.2 million over five years, starting in 2021–22, and $7.9 million per year ongoing, to Global Affairs Canada, to boost support for Canada’s trade controls regime.
  • Canada Water Agency development — $17.4 million over two years, starting in 2021-22, to Environment and Climate Change Canada to develop the Canada Water Agency, to work with the provinces, territories, Indigenous peoples, and key stakeholders on the scope of the agency’s mandate, including identifying opportunities to build and support more resilient water and irrigation infrastructure.
  • $57.6 million in 2021-22 to extend the Mandatory Isolation Support for Temporary Foreign Workers Program to help employers offset costs associated with temporary foreign workers fulfilling isolation requirements upon entering Canada.
  • Several other programs to to assist employers of temporary foreign workers, including $49.5 million over three years, starting in 2021-22, to support community-based organizations offering migrant worker-centric programs and services, such as on-arrival orientation services and assistance in emergency and at-risk situations, through the new Migrant Worker Support Program.
  • Hundreds of millions of dollars for several programs to encourage youth and student employment, including $239.8 million in the Student Work Placement Program in 2021-22 to support work-integrated learning opportunities for post-secondary students and $371.8 million in new funding for the Canada Summer Jobs program in 2022-23 to support approximately 75,000 new job placements in the summer of 2022.
  • $20M in 2021-22 to retain Canadian Food Inspection Agency inspectors hired in response to COVID-19 related inspection backlogs while pandemic-related risks in food processing facilities persist.
  • $28.6 million over five years, beginning in 2021-22, with $5.7 million per year ongoing, to the Public Health Agency of Canada, Health Canada, and the Canadian Food Inspection Agency, to help address antimicrobial resistance.

Overall, the government is projecting a $155 billion deficit over the next year, with no plan to return to balanced budgets through 2025-26. (For context, the 2019-20 deficit was around $39 billion.) Federal debt is predicted to rise to 51.2 per cent of GDP in 2021-22 and decline slightly to 49.2 per cent of GDP by 2025-26.

Check out Monday’s RealAg LIVE coverage of the 2021 budget, featuring guests from the Canadian Federation of Agriculture, Canadian Cattlemen’s Association, and Pulse Canada:

Editor’s note: this story has been updated several times to reflect new information.

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