Binkley on agrifood and federal budget

The Binkley Report

Alex Binkley is a foremost political and economic analyst, whose website is Readers will be aware that his columns in True North Perspective have foreseen political and economic developments in Canada. In this edition ...

Agrifood receives plenty of attention in the federal budget

By Alex Binkley
True North Perspective

The moment Ron Bonnett read in the federal budget that the government wants to boost agrifood exports to $75 billion by 2025, he knew his sector was finally about to receive some serious attention in Ottawa.

“It told me the door was open to talking to government departments about the factors holding back our sector’s growth,” says the President of the Canadian Federation of Agriculture. They include labour shortages, government regulation and more support for innovation.

“The Finance Minister identified agrifood as a key to boosting the economy,” Bonnett said. One area that needs plenty of attention to hit the $75 billion target is value-added food processing.

“By 2050, global demand for food is expected to rise significantly,” Morneau told the Commons in his budget speech. “We will help farmers, producers and processors build their businesses globally, and do so sustainably. In recent years, industry growth has been strong, with farm revenues, annual exports and farm incomes all reaching record highs.”

Canadian agrifood exports reached $55.5 billion in 2015. “Despite this strong performance, there is still room for further growth — growth that can be achieved through innovation and the development of value-added products.”

While Morneau referred to the praise for the agrifood sector’s potential in a recent report by the Advisory Council on Economic Growth, he didn’t entirely embrace its proposals to make it a pilot project for assisting seven sectors with high growth potential. Nor did he provide many details about various policies announced in the budget.

As well, a number of key files for the sector such as reducing the roadblocks to foreign workers when Canadians aren’t available was mostly left for further discussion.

Grain Growers of Canada (GGC) noted the budget mentioned agrifood 29 times and agriculture 14. Not bad for a sector that usually gets mentioned in passing on budget day.

Fiona Cook, GGC Executive Director, said, “The recognition and highlighting of the agriculture sector as a strategic asset is a welcome change and redirection for this government. It sets us up well for our advocacy over the upcoming year.”

The budget also touched on five key areas of interest for crop producers, she said.  An additional $70 million over six years in science research on adapting to climate change and protecting soil and water resources is a positive move. The sector will also be able to tap into clean growth funding.

Consultations on carbon pricing are welcome. An additional $149.3 million for the Canadian Food Inspection Agency’s inspection service will help boost confidence in Canadian products is also welcome. A proposed trade and corridors fund to address transportation bottlenecks will help boost food exports.

Food processors are also enthusiastic about the budget’s provisions. Food & Consumer Products of Canada (FCPC) welcomed the identification of agrifood as one of three industries in Canada with "great potential for growth and job creation.

“We are very pleased with the government's bold strategy to grow the agri-food sector,” said CEO Michael Graydon. The budget “reflects FCPC’s efforts over the years with the federal government to highlight the sector's importance and proactively position the industry as a partner in driving innovation and inclusive growth.

“We also support the investment of up to $950 million over five years, to drive business-led innovation superclusters, in industries such as agri-food that have potential to accelerate economic growth,” he said. “We are pleased to see the government addressing trade issues by announcing an ambitious target to grow Canada's agri-food exports and recognizing room for further growth that can be achieved with the development of value-added products.”

Christopher White, President and CEO of the Canadian Meat Council (CMC), welcomed the additional funding for CFIA. “Food safety and the integrity of the system is paramount and we look for ways to continue to work with CFIA to deliver on their mandate.

“Canada is the world's fifth largest agrifood exporter,” he said. “CMC is always looking to see our export markets grow in an increasingly competitive global market, and there are elements within the budget that will enable us to do so."

Soy Canada (SC) Executive Director Jim Everson said the budget made “positive steps towards unleashing the growth potential of the Canadian agriculture sector. Soy Canada looks forward to working closely with the federal government and other partners at ensuring they are provided with the essential tools and resources necessary to achieve the targets outlined in the budget and promote Canada as an agriculture powerhouse around the world.”

Levi Wood, President of the Western Canadian Wheat Growers said, “it was great to see some priority spending focusing on critical infrastructure, such as the announced National Trade Corridors Fund, and we hope to see some of those funds dedicated to enhancing capacity in our essential grain handling and transportation system in western Canada.

“It’s also positive to see work on ‘advancing regulatory alignment’ in agriculture with our trading partners,” he said. Additional funding for improvement of the grain handling and transportation system is also positive.

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