2011 pre-budget consultations

january is always a busy time for pre-budget consultations and hearings across the province and the country.  This year, we participated in two provincial pre-budget hearings, several consultations with Ontario MPs in addition to our appearance before the federal Standing Committee on Finance last fall. 

Provincially, as part of the Ontario Grains & Oilseeds Safety Net Committee, two GFO directors, Leo Guilbeault and Jeff Davis presented to the Ontario pre-budget hearings to emphasize the need for a permanent Risk Management Program. 

The message to Ontario’s MPPs reiterated that in the three years of the pilot project, grain farmers have paid $48 million in RMP premiums and the government has paid out $66 million.  The total cost to the government in those three years was about $18 million.  We made the case for the strength of the program by pointing out that farmers have signed up and paid their premiums to RMP in spite of the fact that commodity prices are high and we have no assurances that the program will exist next year.

A similar message about the importance of a Risk Management Program was given to the federal Standing Committee on Finance by Guilbeault and Quebec grain farmer, William Van Tassel in October 2010.  At that meeting, our Ontario-Quebec Grain Farmers’ Coalition urged the government to implement a regional flexibility program in the Growing Forward policy framework as administered by Agriculture Canada that includes funding for provincial business risk management.

Provincially, GFO director Mark Huston appeared before the pre-budget hearings to draw attention to the need for a greater investment in extension, a seed tax credit for certified seed and a minimum two percent biodiesel mandate for the province. 

In terms of provincial investment in extension work, GFO asked that the work the OMAFRA crop specialists do in the field be strongly supported in this year’s budget through increased allocations to the extension program.  This will ensure this program continues to be a valuable resource that has the most direct benefit to Ontario’s grain farm profitability and as a result, contributes to a thriving rural economy in Ontario.

The idea of a seed tax credit for wheat, which originated from the Canadian Seed Trade Association, was introduced to the hearing to decrease the burden of certified seed advancement costs from the smaller seed companies doing the majority of the new variety development work.  Over the five years between 2001 and 2006, Ontario winter wheat yield increased by 10.41 bushels per acre.  Wheat production almost doubled in that time and the value of the winter wheat crop more than doubled.  The increase in production and the introduction of new quality attributes have spurred an increase in milling and baking and other food processing in Ontario, creating jobs and wealth for the entire province.  GFO requested a maximum investment of
$10 million annually in a program that would save farmers 50 percent of their certified seed costs through a reduction in provincial income tax.

GFO also presented the need for a minimum two percent biodiesel mandate in the province to match the federal mandate announced earlier this year.  In a recent third party study, Canadian ethanol was found to reduce green house gases by 62 percent per year compared with fossil fuels and biodiesel was found to generate a remarkable 99 percent reduction.  Ontario has an ethanol mandate of five percent in all gasoline but there is currently no biodiesel mandate.  A two percent national biodiesel mandate set for implementation by 2012 will create demand for 500 million litres per year of biodiesel.  This will create opportunities for new plants and decisions are being made right now that will determine the future of this opportunity.  A new plant is currently under development in Alberta that will produce 225 million litres per year beginning in April.  We are concerned Ontario will be left out of this opportunity without a biodiesel mandate.

In the federal consultations with MPs, GFO has not only reiterated the need for a national and regionally flexible business risk management program, but we have made the request for increased research funding and the need for a resolution on GM and tariff issues with crops exported to Europe. 

Grain farmers across Canada are requesting the Canadian government re-build A-Base funding levels by $26 million a year for next 10 years to ensure a solid foundation of capital for crop breeding infrastructure, agronomic research, pest management and grain quality enhancements. 

Nationally, farm groups including GFO are also necessitating the establishment of a low level presence for GM crops imported by the European Union to reduce the risk of rejected loads of grain exported from Canada.  Canadian organizations are also requesting an elimination of the EU’s tariff on imported low-to-medium quality wheat over our country’s 38,853 tonne annual quota and the removal of the wheat import duty of 12 Euros per tonne.

Grain Farmers of Ontario will continue to follow up on these issues and update our members when the federal and provincial budgets for 2011 are announced and as the year unfolds. •