Opinion: The feds came with cash for AgriStability, but Prairie provinces are holdouts

Provinces expressing disappointment with the federal government for not putting its share of AgriStability funding on the table are being disingenuous and failing to take their share of responsibility for reform talks that failed largely due to their tight pockets.

The AgriStability saga between Prairie provinces and the federal government continues, despite the two sides agreeing on a major reform. 

After more than a year of back and forth negotiations, provinces agreed in March with Ottawa to remove the reference margin limit from AgriStability, but the prospect of further short-term changes remains dim.

Removing the reference margin makes the program easier to access and comes at an additional cost to AgriStability, which is cost-shared at a 60-40 level between the provinces and feds. The cost-sharing is baked into the broader Canadian Agricultural Partnership agreement.

And while all involved should be happy, an additional change that would have seen producers receive more money from the program was shut down by the Prairie provinces, who argued it would cost them too much money. 

Alberta Minister of Agriculture and Forestry Devin Dreeshen said on social media he was “disappointed that the federal government chose to withhold $75 million out of the $170 million they publicly communicated, especially when you consider that Alberta net transfers more than $20B to Ottawa annually.”

What he failed to mention is that 40 per cent of that $75 million figure would traditionally come from the provinces, but that didn’t happen this time because Prairie governments failed to commit to put up their share of the funding. 

He told an Alberta radio station he was “a little disappointed, I guess, by the federal government to not actually come to the table with their extra funding when it came to AgriStability.”

Such criticism is misleading, and wrongly places the blame on Ottawa for failing to increase compensation funding. 

Federal Minister of Agriculture Marie-Claude Bibeau says the federal money “remains on the table for the increase of the compensation rate” but that the Prairie provinces aren’t willing to take this step. 

Basically, the federal government is willing to unlock $45 million to increase compensation rates to farmers, so long as the provinces agree to collectively contribute $30 million.

For context, consider the Alberta government was willing to spend $30 million a year in 2019 to fund a so-called “energy war room” tasked with promoting the oil and gas industry. The budget has since been reduced to $12 million a year, which is roughly the equivalent of the share Alberta would be paying to increase compensation rates, according to Dreeshen. Twelve million dollars represents 0.02 per cent of Alberta’s forecasted spending for 2021-2022 fiscal.

While Prairie provinces have complained about the costs for months, Bibeau has been clear her government is committed to removing the reference margin limit and increasing compensation rates, provided the provinces continued to accept the long-agreed upon 60-40 cost-split.

Even before making a specific proposal late last year, Bibeau wasn’t shy about telling producers and the provinces her Liberal government was willing to spend money to improve the program, provided that was the most efficient way to do so.

Dreeshen and his Prairie colleagues have criticized AgriStability’s effectiveness and touted the merits of alternative business risk management programs, but have been reluctant to make any commitments that would involve spending more money. 

Ultimately, it is the responsibility of Bibeau to manage relationships with the provinces and ensure cordiality — that’s the burden she carries as the federal minister. 

But she made a good point when recently asked about the role province’s play in these negotiations. 

“Agriculture is a shared responsibility. We have all signed together an agreement on business risk management programs, and there are rules to follow,” she said. “I still believe that 60-40 is a fair cost share, and that the provinces have the responsibility to contribute and choose to support their farmers.”

Source: Farmtario.com