It is the biggest cut in government spending since the days of Ralph Klein — but Alberta’s agriculture minister calls it ‘trimming’ and farm groups are not raising a hue and cry.
“We’ve trimmed our spending this year by nine per cent by going through every program that we’ve had within the ministry to find efficiencies,” Devin Dreeshen said in a breakfast speech at Agri-Trade.
“That’s what we’ve been tasked to do — run government like a business. And that’s what we’re committed to do for the next 3-1/2 years of our term.”
The United Conservative Party government will cut overall spending by $1.3 billion — 2.8 per cent — over four years. But the Agriculture and Forestry Ministry will see its budget reduced by 15 per cent over that four-year period as spending falls to $822 million by 2022-23 from the current $967 million.
But Dreeshen played down the impact of such deep cuts, saying a department-wide effort to reduce costs produced tens of millions in savings.
“Governments being governments, there are always efficiencies to find, especially after the last four years where there was a lot of spending and there wasn’t a focus on red tape reduction or running the department like a business,” he said.
“Of the nine per cent cuts that we’re doing this year, it’s mostly just finding efficiencies — if we were to run it like a business, could we get the same outcome but with less spending?
“It took us a long time to find those efficiencies, but I was happy to work with the team and the department to be able to find those efficiencies.”
The department’s head count will fall by 51 positions, with current vacancies going unfilled and the possibility of further staffing reductions in the years ahead, he said.
‘Live within our means’
The spending reduction wasn’t unexpected, said Tom Steve, general manager of Alberta Wheat and Barley.
“It’s not something that we celebrate, but we understand the reasons behind it,” he said.
“Any time you have a government that signals that they’re going into a period of restraint, you’re going to expect some adjustments — a reset, if you will — in the provincial budget across all departments and across all ministries. Agriculture is no different.
“Overall, there was nothing that was really a tremendous surprise.”
Alberta Canola chair John Guelly said his organization appreciates that the government has been working with farm groups, and farmers themselves, to determine priorities.
“Budget cuts are never an easy thing to take, but we have to live within our means,” said Guelly, who farms near Westlock.
“The minister has been great as far as getting together and collaborating before a lot of these decisions are made. So generally speaking, I think things are going as well as can be expected.”
“We would be more concerned if there were significant program cuts but really, the core areas of programming in the Agriculture Ministry are related to business risk management programs,” he said. “We don’t see any real change in those, so that’s encouraging to us.”
The focus was on funding the right things at the right levels, said Dreeshen.
“We are trying to live within our means,” he told producers at Agri-Trade. “But we’re also funding in very important ways.
“Whether it’s farmer safety nets, whether it’s research, whether it’s irrigation districts or ag societies, we want to make sure that government is actually funding important priorities for our agriculture communities.”
The budget allocates $19.5 million to areas such as the Rural Gas and Electric programs, the Remote Area Heating Allowance, and the Agricultural Society Grant program, as well as youth development programs like 4-H.
There was good news for ag societies, which will have their $11.5 million a year in funding maintained over the next four years.
“That predictability will be locked in for ag societies,” said Dreeshen. “It just shows the importance the government has for ag societies across the province.”
The province will also put $14 million this year into the Irrigation Rehabilitation Program, a cost-shared initiative that helps Alberta’s 13 irrigation districts improve infrastructure and management techniques. Another $10 million will be allocated next year and then $12 million in each of the two following years, for a total of $48 million.
“I think there are lots of key rural infrastructure investments that we’re making, especially in agriculture and forestry,” said Dreeshen.
But some of the other cuts in the provincial budget could have a ripple effect on farmers and other rural Albertans.
The $1.3 billion in savings the government is targeting over the next four years include cuts to education, health care, social programs, and infrastructure — and those cuts won’t be exclusive to urban centres.
That means some rural Albertans could face higher municipal taxes, higher school fees, longer wait times at rural hospitals, and other trickle-down effects from the provincial cost cutting.
“Margins are tight, markets are uncertain, and our prices are lower, so we certainly don’t need our inputs to increase any more than they have already,” said Guelly, citing trade issues as an ongoing challenge.
“There aren’t a lot of farm dollars left when you start talking about these trade issues. All of this has the potential to add to that, so we really hope it’s minimized.”
And while the province scrapped Alberta’s carbon tax in the wake of the election — which Dreeshen called “the largest tax cut in provincial history,” — the $20-a-tonne federal carbon tax will come into effect in Alberta on Jan. 1. The government has also introduced a new tax on large industrial emitters, through the Technology Innovation and Emissions Reduction (TIER) program.
In some cases, those costs could get passed down to farmers, said Guelly, adding this approach is still preferable to the federal tax.
“Whenever you talk carbon tax, we all end up paying for it,” he said. “Farmers are always transporting stuff, and as soon as you talk transportation, you see nothing but carbon tax dollars going out. Whatever we can do to minimize that is certainly in the best interest of farmers.”
Dreeshen said he expects fiscal restraint by government will create a stronger Alberta economy — one with agriculture playing a central role.
“There are a lot of changes we have to make in the province to get our fiscal house in order,” he said. “At the end of the day, we got elected as a government to increase economic activity and jobs.
“When we see and hear all the negativity that’s happening in our energy sector, agriculture is a bright spot that we have here in the province of Alberta. We want to do everything possible to help our ag sector grow.”