New provincial budget mirrors pre-election spending plans

Tuesday, July 15, 2014

by SUSAN MANN

Funding to expand natural gas infrastructure in rural Ontario and money for agri-food processors to upgrade or located their businesses in the province both made a comeback in Monday’s provincial budget but not everyone applauds the government’s decision to reintroduce its spending plan without alterations.

Ontario Agriculture, Food and Rural Affairs Minister Jeff Leal says Monday’s budget is the same one the government introduced in May. That budget was defeated by the opposition parties and triggered the June 12 provincial election leading to the Liberal majority.

But Haldimand-Norfolk MPP Toby Barrett, the Progressive Conservative agriculture critic, says the government is making a mistake by not adjusting its spending plan after Moody’s Investor Services downgraded its fiscal outlook of the province to ‘negative’ from ‘stable’. Moody’s didn’t change the province’s credit rating.

Ontario pays $11 billion annually to service its debt and Barrett says Conservatives are concerned about that and will vote against the budget as in May.

Barrett says the government should have reshaped its budget plan after the credit rating service released its new outlook. “You have to do that if you’re running a farm. If the weather changes or you can’t get certain crops in or your bank is telling you that you lost money for the past two years, you have to downsize or sell some assets or cut back a bit. You change your plan.”

But Barrett says rather than heeding Moody’s warning, the budget shows the government intends to “spend recklessly and wastefully.”

Similar to the May budget, Monday’s version includes the $40 million annually over the next 10 years earmarked for food processors as part of the $2.5 billion jobs and prosperity fund. Leal says the money for food processors will be used for “initiatives, such as new opportunities and new companies that are coming into the field and other companies that want to renew or expand their operations.”

The jobs and prosperity fund will work a lot like the Southwestern Ontario Economic Development Fund but “in this case this is $40 million targeted directly at the agri-food business,” he says. “We see this as a real growth sector in the years to come.”

Another reintroduced proposal agriculture can tap into is the $130 billion over 10 years infrastructure fund, which includes money to expand natural gas infrastructure in rural Ontario. Leal says he’s working very closely with Ontario Federation of Agriculture president Mark Wales “to look at ways that we can replace the use of electricity, propane and fuel oil in many rural communities throughout Ontario.”

Leal adds the government’s natural gas infrastructure plans are similar to its rural broadband project and is “crucial to future growth in Ontario.”

Neil Currie, Ontario Federation of Agriculture general manager, says there wasn’t any detail about the natural gas infrastructure expansion in the budget but during the election the Liberals announced there would be a fund of $30 million available for grants and a loan program to municipalities of $200 million.

“That’s a little short of what we were looking for,” Currie says, adding the federation’s proposal was a five-year pilot project of $55 million annually in public investment to “achieve 55,000 new customers per year.”

The federation and its county federations plan to work with the provincial government and municipalities “on what the priorities are in their areas and making sure they get their fair share,” he explains.

Leal says the $100 million annually for infrastructure funding for small, rural and northern Ontario has been made into a permanent fund. The funding helps to pay for new or rebuilding projects, such as roads, bridges and drainage projects, and is targeted “towards small communities in rural Ontario that often don’t have the assessment bases to do this work on their own.”

Currie says they’re happy to see the infrastructure funding in the budget. “It’s a great start on the infrastructure side of things. It is a big part of what we were looking for helping to grow Ontario.”

The one thing agriculture is keeping a very close eye on is the proposed Ontario pension plan. Currie says there’s no detail on it. But some questions the industry needs answers on include whether it will apply to workers in the Seasonal Agricultural Workers Program along with owner-operators as a payroll deduction and whether employers will be required to contribute.

Leal says the government plans to work closely with the agricultural sector. “We’ll do extensive consultation before any Ontario pension plan is going to be introduced.”

About Barrett’s concern the tax credit for farmers who donate to food banks is absent from the budget, Leal says it is included. “We’re finishing working out details with the Canada Revenue Agency and we’ll be pursing our work with them as quickly as we can.”

As for the absence of a mention of agriculture and rural Ontario in Finance Minister Charles Sousa’s budget speech, Leal says the government’s commitments to both the industry and rural Ontario was included in the budget documents. “That’s clearly highlighted in the budget documents.”

Leal says he met last Thursday with 28 farm and agri-food leaders in Guelph and “they were certainly complimenting us on a number of the initiatives they knew were going to be reintroduced again with this budget.” BF