Barrett speaks of budget impact on business and agriculture

March 21, 2016

QUEEN’S PARK – The impacts of the provincial government’s financial policies are hurting rural Ontario, and this will only be magnified in the recent provincial budget, Haldimand-Norfolk MPP Toby Barrett told the Ontario Legislature.

In the riding last week, Barrett visited a number of businesses and heard increasing input costs are impacting the bottom line.

During his speech in the House, Barrett blasted the impact of the $28 million cut to the Ministry of Agriculture, Food and Rural Affairs budget. There are already rumours of the Rural Economic Development Fund being eliminated, and the Local Food Fund being eliminated.

In response to ag critic Barrett’s previous question in the House, the ag minister told him he was moving the Local Food Fund to the Greenbelt Fund.

“I’m not sure how that helps Windsor or Thunder Bay or Essex County,” Barrett said in his speech. “My riding is not in the Greenbelt. Sault Ste. Marie, Huron County, Leeds–Grenville—there is so much of the province of Ontario that is outside of the Greenbelt.”

Barrett also addressed the impact of the cuts on Ontario’s food and beverage sector, which is the second largest in North America.

“That’s something to celebrate, something to be proud of—but again, how can we continue to maintain that given the fiscal decisions that are being made within this province and most specifically and recently with the budget that’s before us now for debate,” he said with respect to Ontario’s food and beverage business. “

Barrett concluded his speech by asking, “In the light of all this, where did the decision come from to cut the ag budget by $28 million? What ag minister would stand up and be proud of the fact that he just cut his own budget by $28 million?”


For more information, contact MPP Toby Barrett at 519-428-0446 or [email protected]


Monday, March 21, 2016

Mr. Toby Barrett: I always welcome the opportunity to say a few words about Ontario’s fiscal situation and the state of our economy and, more specifically, budgetary measures that are before this Legislature.
There is concern out there, I would say across the province. I can certainly speak for my riding. We’ve just come back from constituency week, so I had an opportunity to do some main streeting—quite a bit of main streeting, actually—and a lot of visiting in various towns in my riding. People are worried. A lot of it seemed to revolve around money. Now, granted, I was going in and out of businesses. ??There was a lot of concern. I think of a real estate broker who had been sitting in his office all day—not much business that day. But he still had to pay for his electricity.
Talking with steel fabricating—and I was in and out of a couple of welding and fabricating businesses. They have a very good reputation. The stuff they do is amazing. The one shop had laid off a large percentage of their staff. The other shop is very small, family-run—both of them are family-run—would bring young people in, but they didn’t have the skills. They had the schooling, had the training, but they didn’t seem to be up to speed and didn’t seem to have the interest. In fact, he indicated that some of them were a safety concern. Again, that was hindering that particular shop from expanding right now.
So, over to Caledonia, Simcoe several times—a larger town in my riding—and down to Dunnville—doing a lot of visiting. There is concern out there. There’s anger. The anger is directed towards this government, by and large. I will say—and this is no surprise to many people; perhaps this is the nature when you have a party that’s been in government for a large number of years, like the present government—that much of the anger was very specifically directed towards the Premier.
I raised issues of what’s going on here and raised issues of the budget that was presented a number of weeks ago. People didn’t really have a lot of information about that, but they had a lot of information about their family, their neighbourhood, their town and the small businesses. I did explain to people that, for whatever reason, this budget was brought down two months earlier. Maybe I’m not plugged in. I’m still not sure why it was brought down two months earlier. I really have no idea. Maybe during the two-minute responses we will hear the reason. But it was brought down two months earlier than normal for whatever reason. The federal budget’s coming down tomorrow. I find it unusual that a provincial, let alone a municipal, which you would never see, would bring down a budget before they knew what they were getting or the partnerships that were being negotiated at the provincial or the federal levels. It’s very, very unusual and maybe we’ll find out the reason why?
The result of bringing it down two months earlier—a lot of the numbers are missing. A lot of answers are not there. The program details, even though we’ve got a budget book—I don’t have one at hand—with hundreds of pages, details are missing. I personally feel that, at minimum, this budget should have waited at least until after the recommendations and the feedback from pre-budget hearings had come in. Why do we have pre-budget hearings? This really flies in the face of any concept of citizen participation or public involvement in the affairs of the treasury. Why was this budget brought down before the report came in, the feedback came in?
I sit on the finance committee, Speaker. We heard from hundreds of deputations—Hamilton, Windsor, Thunder Bay, Sault Ste. Marie, Ottawa, Toronto. People came into those cities from so many areas across the province at their expense, presented written briefs as well and put a lot of work into their presentations, but before our committee could report on what they said, the budget came down. The cart was before the horse.
My constituency office down in Simcoe in the Haldimand–Norfolk riding after the budget—even before the budget—received a fair number of calls. People who are interested in the programs want to know when they start. We would contact the various ministries—as you would know, an MPP would have access to the liaison people—but we couldn’t get answers from the ministries. We were told, “Well, there’s no details yet or certainly no timelines yet.” Now, whether that relates to bringing down a budget at least two months before you should have, I don’t know.
I represent a farm riding, an agricultural riding. Half my residents don’t live in town. They don’t live in a village. Farmers, small businesses—I think the reality is sinking in that there’s a $28-million cut to the budget for the Ontario Ministry of Agriculture, Food and Rural Affairs. To me, this does not bode well for rural Ontario, small-town Ontario, parts of our economy, including much of the city of Toronto that has an economy dependent on agri-business and food.
There’s no doubt that we’re going to see further details on these program cuts. Very recently, we came to realize that the Rural Economic Development Fund—the RED Fund—is on the chopping block. I forget the terminology that’s being used—it’s being transferred; it’s being yanked out of agriculture anyway.
I do recall, a number of years ago, as a former government member, that I sat on the Premier’s Task Force on Rural Economic Renewal. We travelled the province; we conducted our own hearings for months and months. We travelled elsewhere—Saskatchewan, the states of Iowa and Illinois—taking a look at some of the best practices. We got out to Sydney, Nova Scotia, an area that, at that time, was just losing its coal and steel industry—a devastating effect. It was explained to us that in Sydney, Nova Scotia, everybody pulled together to try and deal with this devastating hit to a rural economy.
So as far as the OMAFRA budget: Again, questions are being asked by farmers. What is getting the knife specifically?
I’d like to quote the CEO of Food and Beverage Ontario, Norm Beal:
“The lower Canadian dollar has had an impact on our ability to generate jobs over the last few years, and we’re expecting that to accelerate… We are launching a major campaign called Taste Your Future because there aren’t enough people trained in our industry to take these jobs. We need young people and new Canadians interested in our sector for jobs ranging from millwrights to food scientists and marketing people.”
Last week, I did hear thus the concern of wanting to hire young people, wanting to expand a bit but not being able to find the skills or the kind of training that would be suitable for their place of employment, whether it was a very small steel fabricating shop or a very large steel industry.
Just going back to Beal’s numbers: He indicated the food and beverage sector has 132,000 direct jobs and another 172,000 indirect, full-time positions. He puts it out as the largest manufacturing sector in Ontario—larger than auto—a sector that generates $40.7 billion in revenue.
Again, a ministry like the Ministry of Agriculture, Food and Rural Affairs is a very important ministry, not only for farming, but for the food and beverage sector. I’ve just explained the significance of that sector in our economy, and the concern is with the cuts to the ag budget, a ministry that is of one of the smallest ministries in the province of Ontario. So there is concern on that front.
Okay, the recession in 2008: Ontario was hit, obviously, partly because of our dependence on auto. But at that time, the food and beverage sector continued to grow, and it grew 11% from 2007 to 2012. During these continued dismal times in the province of Ontario, and in spite of that, the ag sector—the food sector—continues to essentially operate in not only a steady state but to grow, and this is positive. I would think that’s something we could capitalize on. I know, to get into that debate of winners and losers, that this government does pick and choose, company by company, which is a bad idea, rather than sector by sector. Sometimes they pick winners; sometimes they pick losers. At the end of the day, we’re just not sure how effective those kinds of company-by-company grants are and what is the positive impact, if any.
City of Toronto: Second only to Chicago as a food processing hub in North America. But we’ve also got close to the highest electricity rates in North America.
… a food processing hub in North America. But we’ve also got close to the highest electricity rates in North America. We have the highest debt load of any sub-sovereign jurisdiction on this planet, the highest subnational debt in the world. Fraser Institute put out figures that Ontario has the second highest combined provincial and federal personal income tax rates in the G7.
So, just in the context: a province with the second-largest food and beverage manufacturing sector on the continent. That’s something to celebrate, something to be proud of—but again, how can we continue to maintain that given the fiscal decisions that are being made within this province and most specifically and recently with the budget that’s before us now for debate.
In the light of all this, where did the decision come from to cut the ag budget by $28 million? What ag minister would stand up and be proud of the fact that he just cut his own budget by $28 million? Maybe the decision did not lie with the present Minister of Agriculture. The rumors are out there: the cut, the transfer, the elimination of the RED fund, the Rural Economic Development fund. Again, why would we do this? Is there not confidence in our food and our beverage sector, our agribusiness sector? The food sector alone purchases 65% of food-related farm production from growers in the province.
Just to reiterate, the ag budget is dropping to $916 million from $943 million. It is one of the smallest ministries. How do you measure that? Well, one measure is the elimination of the Local Food Fund. We heard so much about local food from the government members across the way. The Local Food Fund is being wrapped up. I raised this in question period. I was told, “Well, it’s kind of being transferred—I assume what’s left of it, if there is any money left, it’s being transferred to the Greenbelt Fund.” I’m not sure how that helps Windsor or Thunder Bay or Essex county. My riding is not in the Greenbelt. Sault Ste. Marie, Huron county, Leeds–Grenville—there is so much of the province of Ontario that is outside of the Greenbelt. No money for them but this Local Food Fund.
On the environmental front, OMAFRA won’t be seeing any of the Green Investment Fund initiatives in this budget. Five or six other ministries will be. I remain firmly convinced in the recognition that the climate is changing, that agriculture does have the answer, one of the significant answers for the sequestration of carbon dioxide. I’m not worried about carbon; people talk about carbon taxes. It’s carbon dioxide, let’s talk about it. Forestry: Tremendous potential within our forestry industry to sequester carbon dioxide.
There’s another sore point that I did come across in my travels last week. The Ontario pension farm operations—just to stay with the ag line here—those that incorporated will have to pay both the employer and the employee portion of this proposed Ontario pension. It’s a payroll tax that’s nearly 4%.
Certainly people across the north, across rural Ontario, farmers in particular, will be hit by the climate change cap-and-trade fuel taxes. We already have carbon taxes, essentially, on fuel now. They’re called excise taxes, they’re called road taxes, they’re called the HST. When you put a gallon or a litre of gas in your car, of the price you pay, 41% of that price is tax. That’s like a sin tax, in a sense. Now, it’s not as high
… the price you pay, 41% of that price is tax. That’s like a sin tax in a sense. Now, it’s not as high as tobacco, that’s close to 80%—although a very large percentage of people do not pay that tax, they go into the black market.
Again, 41% tax on fuel already and really no bone thrown to agri-business. Fuel is a significant cost of not only putting in a crop, working up ground, but also harvesting, trucking and getting it to market. Natural gas: Again no mention of assistance for a request for rural, small-town natural gas expansion, other than expanding the tax on natural gas.
I did hear about the concern from small business. It’s a combination of electricity prices and increases in payroll taxes—in this case for the Ontario pension—and by extension was told they’re just not sure, especially the smaller ones, how long they could continue. Will we see more doors close, more job losses? These are the people that are here now running the business. What about those industries that might take a look at Ontario or in this case maybe they’re taking a second look and then if they take a third look, they realize the “made in Ontario” cost of doing business, they see the climbing costs—electricity alone—I hear this on the shop floor.
Going back to that Ontario pension, of course, helping people save for retirement is a noble goal, but like everything this government gets involved in, they just don’t seem to be able to get it right. The Ontario Chamber of Commerce would concur with that and 150 member businesses remain concerned that the Ontario pension payroll tax will erode the competitiveness of business. It will reduce the take-home pay of workers and in their estimate eliminate something like 54,000 jobs a year. Couple that with the high price of electricity—again, there is a subsidy grant for those people who are willing to run their car with electricity but there’s no grant for those people who can barely afford to run their house on electricity, let alone heat their house on electricity.