Research November 2016 - CFIB · taxation and regulation, business risk management programs (BRM), market access, research and development, innovation, labour, and education. The

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Research November 2016

Growing Ag Competitiveness and Innovation CFIB agri-business members want a focus on red tape reduction in the next policy framework

Marilyn Braun-Pollon, Vice-President, Agri-business Mandy D'Autremont, Director, Agri-business

Federal, provincial and territorial (FPT) governments are currently developing the next agricultural policy framework (NPF), which will come into effect on April 1, 2018. Only three per cent of CFIB agri-business members say the current agricultural policy framework

(Growing Forward 2) is very effective and 24 per cent say it is somewhat effective at improving the competitiveness for their businesses - there is clearly room for improvement. FPT governments released the Calgary Statement – a list of planned priorities for the NPF. While farmers will identify with many of the priorities addressed, their top priority, tackling red tape at the farm-gate, is missing from this list.

The Canadian Federation of Independent Business (CFIB) urges FPT governments to include agri-business owners’ top priority in the NPF in order to make meaningful improvements that will increase the effectiveness of the framework for farmers. Addressing the competitive challenges identified by those in the agriculture sector will help deliver bottom-line results on the farm and ensure the success of the sector for decades to come.

Agri-business owners’ top priorities for the next policy framework: 1. RED TAPE REDUCTION – 75% 2. MARKET ACCESS & DEVELOPMENT – 46% 3. RESEARCH & INNOVATION – 44% 4. BUSINESS RISK MANAGEMENT – 38% 5. PUBLIC TRUST – 34%

Growing Ag Competitiveness and Innovation

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Introduction The strength and resilience of the agriculture sector is due to the commitment and performance of Canadian farmers and other agri-businesses. Government policies have the ability to encourage their success by fostering a competitive landscape. While CFIB recognizes there is little the federal, provincial and territorial governments can do to solve many of the global market issues facing farmers, it can certainly take steps to improve the policy environment in which agri-businesses operate. Government policies impacting agri-businesses range from municipal, provincial and federal taxation and regulation, business risk management programs (BRM), market access, research and development, innovation, labour, and education.

The primary policy framework setting the direction for Canadian agriculture over a five-year period is the federal, provincial, territorial (FPT) agriculture policy framework. With the current framework, Growing Forward 2 (GF2), set to expire in March 2018, FPT agriculture ministers are consulting on the next policy framework (NPF). On July 22, 2016, FPT agriculture ministers presented their key priorities for the NPF in a document called the Calgary Statement - Towards the Next Agriculture Policy Framework1

.

CFIB’s research indicates that there is one major policy area that has been overlooked in the Calgary Statement. To ensure the farmers’ voice and other agri-business owners’ views are considered in the development of the NPF, this paper will present the priorities of agri-business owners, based on their responses to a recent CFIB survey (see Methodology for CFIB’s 2016 National Agriculture Survey on page 20). Findings from this survey demonstrate that Canada’s agri-business owners have a clear vision of what they would like to see in the NPF. CFIB urges governments to consider the recommendations in this submission to ensure the NPF will be a success and that Canada’s agriculture sector grows and prospers in the decades to come.

1 http://www.agr.gc.ca/eng/about-us/key-departmental-initiatives/developing-the-next-agricultural-policy-framework/calgary-statement-towards-the-next-policy-framework/?id=1468864509649

The Calgary Statement’s six overarching priority areas for the NPF:

1. Markets and Trade: Expanding domestic and international markets and trading opportunities for the sector;

2. Science, Research & Innovation: Enhancing competitiveness and strengthening competitive advantages by advancing science and innovation capacity and encouraging the adoption of products, practices and processes;

3. Risk Management: Anticipating, mitigating and responding to risks in a manner that supports the sustainable growth of the sector;

4. Environmental Sustainability & Climate Change: Supporting the resiliency and environmental sustainability of the sector to ensure long term adaptation and growth;

5. Value-Added Agriculture and Agri-Food Processing: Improving the growth of the value-added agriculture and agri-food processing sector; and

6. Public Trust: Securing and growing public trust in the sector.

http://www.agr.gc.ca/eng/about-us/key-departmental-initiatives/developing-the-next-agricultural-policy-framework/calgary-statement-towards-the-next-policy-framework/?id=1468864509649�

http://www.agr.gc.ca/eng/about-us/key-departmental-initiatives/developing-the-next-agricultural-policy-framework/calgary-statement-towards-the-next-policy-framework/?id=1468864509649�


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State of Agriculture

Confidence in the Future of Canadian Agriculture

Canadian agriculture and agri-food contributes over $100 billion to the Canadian economy, representing nearly seven per cent of the country’s GDP2

The NPF is an opportunity for governments to ensure the policy environment reflects the realities of farming, fosters optimism, and improves the overall competitiveness of the sector. In doing so, policymakers can demonstrate their understanding of the sector. Currently, agri-business owners are not confident that policymakers are creating agricultural policies with a true understanding of the practical realities of farming. Only twelve per cent of agri-business owners agree that policymakers understand the realities of farming (see Figure 2). The majority, 84 per cent of agri-business owners disagree that policymakers understand the realities of farming.

. Agri-business owners are largely confident in the future of Canadian agriculture. Sixty-nine per cent of agri-business owners agree that the future of Canadian agriculture is strong; nearly a third (29%) of agri-business owners disagree (see Figure 1). While the outlook for those operating in the sector is by and large optimistic, there are ongoing challenges that impact the outlook for the sector, particularly market access challenges, extreme weather, market pressures, input and operating costs, and regulatory burden.

This report is a tool for policymakers to understand CFIB’s agri-business members’ views on the NPF, and can help in developing a more effective framework that takes into account the voice of Canadian agri-businesses.

2 http://www.agr.gc.ca/eng/about-us/publications/we-grow-a-lot-more-than-you-may-think/?id=1251899760841

Figure 1 To what extent do you agree or disagree with the following [statement]? (% response)

The future of Canadian agriculture is strong.

Total: 69% agree; 29% disagree

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47

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Strongly agree

Somewhat agree

Somewhat disagree

Strongly disagree

Don't know

Not applicable


Policymakers understand the realities of farming.


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33 51

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Strongly agree Somewhat agree Somewhat disagree Strongly disagree Don't know Not applicable

http://www.agr.gc.ca/eng/about-us/publications/we-grow-a-lot-more-than-you-may-think/?id=1251899760841�


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Policy Priorities

Effectiveness of Growing Forward 2 Policy Framework

The current agriculture policy framework, GF2, focuses on research, innovation and market development and included some changes to business risk management programs. The aim of the program is to enhance the long-term competitiveness of agriculture. Our agri-business members’ views on GF2 show that there are significant improvements needed to the NPF in order to ensure a competitive landscape for Canada’s agri-business owners. One-in-four (27%) agri-business owners say GF2 has been effective at improving the competitiveness of their agri-business, but it is notable that only three per cent say it has been very effective (see Figure 3). Conversely, 46 per cent say GF2 has not been very effective/is not at all effective.

The NPF needs to be much more effective at enhancing competitiveness and also needs to be better communicated to producers (27 per cent do not know how effective GF2 has been).

Agri-business Priorities for the NPF

In order to make the NPF more effective, reflecting agri-business owners’ priorities is essential. The top priority agri-business owners would like to see government focus on in the NPF is red tape reduction (75%), followed by market access & development (46%), research & innovation (44%), business risk management (BRM) (38%), and social licence/public trust (34%). Other areas include food processing (25%), and environment & climate change (15%) (see Figure 4). While red tape reduction did not make it onto the list for the Calgary Statement, policymakers should recognize agri-business owners’ priorities and ensure red tape reduction is reflected and is a priority for the NPF. Reflecting these views is crucial to fostering innovation in the sector and ensuring farmers are competitive on the world stage.

Figure 3 How effective has GF2 been at improving the competitiveness of your agri-business? (% response)

Total: 27% effective; 46% not effective

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24 26 20

27

Very effective Somewhat effective

Not very effective

Not at all effective

Don't know

Figure 4 Which of the following areas should federal and provincial governments focus on in the next agriculture policy framework to help your agri-business succeed? (% response)

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Red tape reduction

Market access and development

Research and innovation

Business risk management

Social license/public trust

Food processing

Environment and climate change

Other

None of the above


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CFIB recognizes the federal government has highlighted stakeholders’ feedback on concerns about red tape in the What We Heard Report3

(see Reference 1). Given this issue has been raised throughout the consultations for the NPF and is a top priority for agri-businesses, regulatory reform should move into the list of focus areas in the NPF.

Priority #1 – Red Tape Reduction – Supporting Innovation

Defining Red Tape

Food safety is a goal all farmers share and they understand regulation is important to protect human health and the environment. In fact, 96 per cent of agri-business owners say that producing safe and healthy food is important to them, the remainder say that producing safe food is not applicable to their business (4%) (see Figure 5). None disagree that producing safe and healthy food is important to them.

In discussing red tape reduction it is important to differentiate the conversation about rules needed to ensure safe food from rules that do not help support a safe food system. Rules needed for this purpose are necessary regulation, while ‘red tape’ is the unnecessary rules, duplicated paperwork, and bad customer service from government agencies. In fact, in past research reported by CFIB (Fostering Ag Competitiveness Report, 2012), agri-business owners indicated that improvements to the regulatory environment included simplifying existing regulations, eliminating unnecessary regulations, clearly communicating regulations, improving government customer service, and providing examples of what constitutes compliance. Regulatory reform is not about deregulating, but about making the regulatory environment more user-friendly and improving the ease of working with government. Please see Agri-business Member Comments 1 for specific examples from Canadian producers identifying regulatory burdens facing their businesses and the impact of red tape on their businesses. More member comments can be found in Appendix A.

3 http://www.agr.gc.ca/eng/?id=1476470856238


Producing safe and healthy food is important to me.


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Strongly agree

Somewhat agree

Somewhat disagree

Strongly disagree

Don't know

Not applicable

Reference 1: “Outdated regulations and a slow regulatory modernization process are seen as barriers to innovation. Stakeholders felt that Canada’s regulatory framework is too complex and difficult to navigate and has a lack of alignment between federal and provincial regulations.”

http://www.agr.gc.ca/eng/?id=1476470856238�


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Red Tape Holding Back Innovation

Improving the regulatory environment and experience for agri-business owners is a priority for good reason – CFIB agri-business members have told us over-regulation and red tape stifles innovation. Nearly three-in-four (73%) agri-business owners say red tape holds their business back from innovating (see Figure 6). Eleven per cent of agri-business owners say red tape does not hold their business back from innovating, at all. Sixteen per cent say they do not know the impact of red tape on their ability to innovate.

With red tape affecting innovation in agriculture, this is an issue that has far-reaching repercussions to the sector and its competitiveness in global markets. Prioritizing red tape reduction and focusing on regulatory reform is a low cost way for governments to drive productivity and innovation. Removing burdensome regulations will also help support the future of agriculture by preventing barriers to entry and attracting new entrepreneurs to the sector. See Agri-business Member Comments 2 for specific examples from producers illustrating regulatory burdens that hold back innovation in their agri-business (more examples in Appendix A).

Figure 6 To what extent does government red tape hold your business back from innovating (e.g. creating or improving products, services or processes)? (% response)

Total impacted: 73% significantly/somewhat

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16 Significantly

Somewhat

Not at all

Don't know

Agri-business Member Comments 1: CFIB agri-business members highlight their frustrations and the impact of red tape on their business

“The process to approve new seed varieties is far too cumbersome. It needs to be streamlined.” - Alberta, Field

Crop

“We are so busy dealing with government and marketing boards it takes away from time managing our business.” – Ontario, Food processing

“Untrained staff that set their own rules or guidelines.” – Manitoba, Field Crop

“All the forms are too difficult to fill out and you cannot get answers from civil servants.” – Ontario, Fruit,

vegetable, horticulture

“We have had three payroll audits in 18 months with no infractions. The time and effort to accommodate these audits, not to mention the numerous Stats Canada surveys, is very taxing.” – Ontario, Food processing

“Our business is held back by having all kinds of rules that are more restrictive than our #1 competition - our big neighbour, the USA - and then we try to compete with them and try to sell our products to them and the rest of the world. We can't be competitive if we don't have the same tools in our tool box!” – Alberta, Livestock

“The myriad of rules and record keeping requirements for on-farm manufacturing is a deterrent.” – Ontario, Livestock


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Progress on red tape, but prioritization still needed

Over the last 10 years, there have been a variety of steps taken by governments to stem business owners’ concerns about red tape. CFIB was pleased to see the federal government take its first step in better managing red tape on an on-going basis by announcing the implementation of the "one-for-one" rule as of April 1, 2012, which requires regulators to offset an administrative burden of equal value each time they impose a new one.

The one-for-one rule is an important first step, but by itself will not be enough to reduce the regulatory burden felt by small businesses in this country, particularly agri-businesses. CFIB would like to see a commitment from FPT governments to measure red tape specifically in the agriculture sector, implement regular tracking and reporting, as well as setting goals for reduction to the total burden.

The following are examples of other initiatives taken by federal government agencies to improve the regulatory environment.

Canadian Revenue Agency (CRA)

CFIB welcomes the Industry Campaign Approach4

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at the Canadian Revenue Agency (CRA), which is a new initiative to proactively communicate with businesses about common errors on tax returns and how to avoid them, with the aim to promote compliance, including a focus on those in the livestock and dairy industries. This approach is a good step to fostering a more customer service-centric approach to improving the regulatory landscape. Another significant step that improves service was the introduction of My Business Account on April 17, 2012, which is a secure online portal on the CRA

http://www.cra-arc.gc.ca/gncy/cmplnc/ndstrycmpgns/menu-eng.html

Agri-business Member Comments 2: CFIB agri-business members highlight the impact of red tape on innovation

“Expanding our dairy operation. It took two years for approval of the permit. Consequences: The bank we were dealing with withdrew their financial support.” - Alberta, Livestock

“I spend so much time looking after government stuff I have no energy left to be innovative. The paper work is horrendous, and as soon as you are finished that you will have an inspector here to make sure you are doing it correctly. Absolutely ridiculous.” – Ontario, Field crop

“We have not registered with CFIA because of the amount of red tape involved. Thus our sales are limited to direct to consumer instead of including wholesale.” – Alberta, Livestock

“Very slow approval of new weed control chemicals for minor crops (e.g. canary seed).” – Saskatchewan, Field crop

“As we are going to expand our currently existing greenhouse operation we ran into all kinds of requirements from our local and regional and federal governments. Different departments give different answers and they are definitely not always giving the same information. This is very time-consuming and costly…” – Ontario, Fruit, vegetable, horticulture

“Rules and regulations regarding Milk Tank design. The United States have upright milk tanks which are more efficient to cool and clean, as well as faster to empty (less pumping time for milk trucks). They are not allowed in Alberta as of yet. Rules and regulations regarding new building permits are very slowly processed which hold back efficiency, which in turn delay innovation.” – Alberta, Livestock

“Timeline for registration approval of products and labeling by CFIA - Canadian Food Inspection Agency. Timeline ranges from 24-36 months compared to 3-6 months for the FDA in the US. It is a huge impediment to introducing new agricultural feed and fertilizer products in Canada.” – Ontario, Wholesale and supply for agriculture

http://www.cra-arc.gc.ca/gncy/cmplnc/ndstrycmpgns/menu-eng.html�


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website to allow businesses to access their account information online and perform certain transactions, including asking questions and receiving responses electronically. CRA will honor their response even if it is later found to be incorrect as long as business owners have provided CRA with all the information required. CFIB views this is a major customer service improvement for small business owners in Canada and an example for other governments and agencies to follow.

Canadian Food Inspection Agency (CFIA)

Over the last several years, CFIB has been working collaboratively with the CFIA, pushing for better service as well as fairness, transparency and accountability in the way the Agency interacts with its stakeholders. CFIB was very pleased the CFIA launched a Statement of Rights and Service in 2012, which outlines producers’ rights to transparency, fair treatment and quality service without jeopardizing food safety. In the same year, CFIB also welcomed news of a Complaints and Appeals Office so that farmers and small business owners can register complaints and appeals on regulatory decisions and service quality. CFIB’s subsequent 2nd CFIA Report Card, released in 2014, indicated there was some improvement to CFIA’s customer service, but still more work has to be done.

Among the biggest frustrations our agri-business members report are inconsistent rulings and not having a clear path to ask questions and get responses from CFIA to clarify what compliance looks like. Accordingly, in the 2nd CFIA Report Card, two of CFIB’s major recommendations were to develop a one-stop online portal for businesses to communicate with the CFIA, similar to My Business Account at CRA, and to provide answers to compliance questions in writing.

CFIB is pleased that, this year, the CFIA has taken another big step to improving their service with the introduction of a one-stop online portal, Ask CFIA. This portal is for business owners to ask questions and communicate with the CFIA through email and get responses in writing. This tool will also build accountability and improve communications at the CFIA.

Customer service is an ongoing effort and there is still a lot of work to be done, but we look forward to monitoring the effectiveness of Ask CFIA and continuing to work with the Agency to find practical solutions for improving the regulatory and service landscape.

Canada Border Services Agency (CBSA)

While Canada continues to secure a greater number of international trade agreements, Canada and the United States are each other’s greatest trading partners. Canadian small-and medium-sized enterprises (SMEs) are at the centre of cross-border trade and their experience at the border is critical to the health of our import and export markets, particularly in agriculture.

Navigating through government websites can be challenging, especially if most of the information is aimed at larger businesses and not relevant to SMEs. An SME focused page previously existed, but was removed, leaving business owners without access to government trade-related information tailored to small importers, including the specific call centre number they had for SMEs, to assist them when doing business across the border.

CFIB pushed for small businesses to have access to clear, plain-language information on importing and exporting that was aimed specifically at SMEs. CFIB’s 2016 report, Beyond the Big Border5

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, was especially helpful at informing government officials about the challenges SMEs face when trying to import or export, especially to the United States. CBSA responded by creating an SME section on their new website, which provides information specifically targeted at small businesses. The webpage also provides links and videos to guide SMEs through the importing and exporting process. CFIB continues

http://cfib.ca/a8010e

http://cfib.ca/a8010e�


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to work with the Agency and encourages CBSA officials to improve their customer service and reduce red tape that will make a difference for SMEs at the border.

Clearly there are some steps and actions that agencies are already taking, but given the importance of this policy issue, a comprehensive approach to red tape is needed for the agriculture sector. CFIB is disappointed that red tape reduction is not a priority in the Calgary Statement, but hopeful that this concern will be remedied in the final framework.

Priority #2 – Market Access & Development

CFIB strongly commends a focus on improving market access as a priority in the Calgary Statement and recognition of emerging opportunities in the What We Heard Report (see Reference 2). Agri-businesses benefit from access to international markets and, for many, their businesses depend on it. Given this, nearly half (46%) of agri-business owners list market access as a top priority for the NPF (see Figure 4).

Our farm members have an appetite for more work to be done to continue opening global markets to Canadian agricultural products. One key opportunity to improve market access for Canadian products is through the Canadian-European Union Comprehensive Economic and Trade Agreement (CETA). CFIB has been pleased to see the governments’ efforts to ensure this deal continues to move forward and hopes it will increase trade and economic activity between Canada and Europe, providing new export business opportunities and greater labour mobility.

As Canada inches toward ratifying this free trade agreement with Europe, CFIB is hopeful that other trade deals like the Trans-Pacific Partnership (TPP) will be ratified and the freedom of trade resulting from the North American Free Trade Agreement (NAFTA) is maintained. Canadian agri-businesses benefit greatly from trade with the United States – trading $47 billion in agriculture and agri-food products6

To effectively articulate the importance of market access, the following section outlines agri-businesses’ operational plans, which are impacted by access to international markets.

. The importance of market access with the United States cannot be overstated.

Expansion Plans

Canadian agri-business owners are actively looking for ways to create opportunities for the future. In fact, the watchwords for the sector are growth and innovation – 44 per cent of agri-businesses plan to adopt new innovative technologies and practices, and 42 per cent plan to expand their operations (see Figure 7). Along with these growth plans, it is no surprise that 26 per cent plan to adopt value-added initiatives, 24 per cent plan to hire more employees, 23 per cent plan to diversify into other commodities, 12 per cent will be specializing their operations and 10 per cent plan to sell products internationally.

6 http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/agriculture-and-food-market-information-by-region/united-states-and-mexico/canada-united-states-bilateral-trade/the-united-states-and-canada-a-strong-partnership-in-agriculture/?id=1386858939266

Reference 2 – What We Heard Report: “The ability to access new and emerging markets while expanding existing markets remains a tremendous growth opportunity for the agriculture sector and must remain a priority. It was noted that the NPF should reflect a focus on growing exports and addressing barriers to trade and regulatory issues.”

http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/agriculture-and-food-market-information-by-region/united-states-and-mexico/canada-united-states-bilateral-trade/the-united-states-and-canada-a-strong-partnership-in-agriculture/?id=1386858939266�




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Agri-business owners’ plans for growth will be dependent on strong and reliable market access. These results show our members’ desire to achieve higher productivity and economic growth. With our farmers committed to growing the Canadian agricultural industry – it is important governments pursue policies that encourage the growth and expansion for Canadian products on the global market. Succession In addition to implementing policies that reflect agri-businesses’ growth plans, there are also those who are looking to transfer their business ownership or reduce the size of their operation. Ten per cent of agri-business owners are planning to downsize their operation, seven per cent plan to reduce their number of employees (see Figure 7). Twenty-two per cent plan to transfer their business to a family member in the next three years, while eight per cent plan to transfer their business to a non-family member in the next three years. These findings relate to market access because with a significant transfer of ownership we must ensure the sector is one that is attractive to the next generation of entrepreneurs and not made less attractive due to trade barriers.

Figure 7: What are your overall plans for your agri-business during the next 3 years? (% response)

Priority #3 – Research & Innovation

Research and innovation fuel agri-business productivity and create greater wealth and economic prosperity in Canada. With 44 per cent of agri-business owners indicating they plan to adopt new innovative technologies and practices (see Figure 7), they will be pleased that innovation is featured as one of the key priorities for the NPF in the Calgary Statement, which states that there will be a greater focus on transferring knowledge within agriculture and disseminating technology faster. While ensuring new technology and research can be shared and used more quickly, there are also ways to foster innovation that originates within Canadian agri-businesses.

Creating an environment that encourages innovation does not always mean that the government has to create costly new financing grants and programs. Instead, when it comes to fostering innovation on the farm, it would be more effective to address the barriers to innovation, like unnecessary government red tape. In fact, agri-business owners say the top ways to help their business innovate the most are reducing government red tape (67%), lowering the total tax burden (67%), reintroducing the accelerated Capital Cost Allowance (CCA) (55%), tax credits for innovation investments (44%), and accelerated approval processes for new products and technologies (31%) (see Figure 8). These are all

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Adopting new innovative technologies and practices

Expanding size of operation

Adopting value-added initiatives

Hiring more employees

Diversifying into other commodities

Transferring business to family member

Specializing operations (e.g. organic)

Downsizing operation

Selling products internationally

Transferring business to non-family member

Reducing number of employees

Other

None of the above


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actions that agri-businesses can take advantage of directly in their business to adopt more innovative technologies and practices. These top solutions should also be reflected in the NFP.

Figure 8: Which of the following would help your agri-business innovate (create or improve products, services, or processes) the most? (% response)

The two government actions that garner the least interest among agri-business owners are, interestingly, the primary focus for innovation policy in the Calgary Statement NPF plans. Thirty per cent of agri-business owners say increased government grants to fund industry association initiatives will help their business innovate and 23 per cent say that government funded R&D programs to develop new product varieties/inputs will help their business innovate.

In fact, when comparing grants and tax credits head-to-head, the model preferred by agri-business owners are tax credits for business innovation over grants – 68 per cent to 19 per cent (see Figure 9). There are likely several reasons why agri-business owners prefer tax credits – namely, because grants create a situation where only certain businesses receive funding. Agri-business owners must make significant investments in equipment to stay competitive. Tax credits can be very helpful in making innovative technologies more affordable for farmers. With more intensive farming practices and higher acreages, farmers must rely on cutting edge technology to remain profitable. As a result, there is growing interest in having Capital Cost Allowance (CCA) rates for agricultural equipment increased so that they more closely resemble depreciation rates in the United States. Reintroducing the Accelerated Capital Cost Allowance and increasing CCA on Class 8 and Class 10 Agricultural Equipment would both be good steps on this front.

CFIB is disappointed that the Calgary Statement does not address taxation policies in its plans for fostering innovation and competitiveness in agriculture. We therefore urge the NPF ensure a competitive tax environment for agri-business owners. In particular, a competitive tax environment with the United States is particularly important, given Canada’s agri-businesses are competing in the

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Reduce government red tape

Lower the total tax burden

Reintroduce the accelerated Capital Cost Allowance (CCA)

Tax credits for innovation investments

Accelerate approval process for new products and technologies

Increase gov't grants to fund industry association initiatives

Gov't funded R&D programs to dev' new product varieties/inputs

Other

None of the above


Tax credits for business innovation would be more helpful than grants.


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Strongly agree

Somewhat agree

Somewhat disagree

Strongly disagree

Don't know

Not applicable


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same market for their products as their American counterparts. A favourable tax environment in the United States sets up their farmers better for success, compared to our own agricultural community. Removing excessive taxation and regulatory burden would foster competitiveness and help agri-business owners increase investment in innovation and boost productivity growth.

Priority #4 – Business Risk Management

Business Risk Management (BRM) tools are a last resort, but when producers need them they have to work. CFIB agri-business members have consistently called for more responsive, transparent, accessible, predictable, and timely BRM programs.

In the current GF2, federal, provincial, and territorial governments are investing 86%, on average, into business risk management programs (BRM) and 14% into strategic initiatives (i.e. programs focused on agriculture innovation, farm business management, the environment, food safety, etc.). Consultations and negotiations around the NPF may result in changes to this investment split and there appears to be some appetite among agri-business owners toward more investment in strategic initiatives. Forty-two per cent of agri-business owners would like to see an increased investment in strategic initiatives, 39 per cent are satisfied with the status quo and the balance (19%) would like to see increased investment in BRM programs (see Figure 10). These findings show that there is some desire to see more investment into strategic initiatives than has been done in the past. CFIB recommends that the government maintain or increase the amount allocated toward strategic initiatives, while ensuring the BRM programs continue to work for producers, when needed.

Of the BRM programs, AgriInvest has the largest user base with two-thirds (69%) of producers reporting that they use the program. Comparably, 53 per cent of farmers report using AgriStability and 42 per cent say they use AgriInsurance (see Figure 11). The Western Livestock Price Insurance Program (WLPIP), which is only offered in Western Canada, has 12 per cent of producers reporting usage in that region.

Figure 11: Which of the following business risk management programs have you used in the last two years? (% response among Primary Producers)

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53

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AgriInvest

AgriStability

AgriInsurance Program (Crop Insurance)

Western Livestock Price Insurance Program (WLPIP) (Western Canada respondents only)

None of the above

Figure 10 Which of the following best reflects your preferred investment split for the next agriculture policy framework (Growing Forward 3 – to be introduced in 2018)? (% response)

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39

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Increase investment on BRM programs

Status Quo

Increase investment on strategic initiatives


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Satisfaction with the programs is positive overall, but there is room for improvements. Of the suite of BRM programs, AgriInvest receives the highest levels of satisfaction among users (85% satisfied, versus 13% dissatisfied) (see Figure 12). AgriInsurance also has more satisfied with the program than dissatisfied (75% satisfied, versus 23% dissatisfied). For Western producers, the WLPIP appears to be a relative success, as well (84% satisfied, versus 16% dissatisfied). Still, there is clearly room to improve satisfaction levels.

Figure 12: What is your level of satisfaction with the following business risk management programs, that you have used? (% response among Program Users)

*Note: Small base size.

We see the lowest satisfaction level with AgriStability (54% satisfied, versus 44% dissatisfied). What is happening with AgriStability that it is causing it to receive poorer satisfaction levels among users?

CFIB agri-business members have raised specific concerns with AgriStability, including timeliness of the program, tax implications, too-low reference margins, complicated applications, qualification issues, and concerns the system does not work for diversified operations (see Agri-business Member Comments 3 and Appendix B). CFIB encourages FPT governments to include solutions to these problems in the NPF, so that the updated version of AgriStability will more effectively address market fluctuations for agri-business owners and ensure the program works for producers.

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AgriInvest

AgriInsurance Program (Crop Insurance)

Western Livestock Price Insurance Program*

AgriStability

Very satsified Somewhat satisfied Somewhat dissatisfied Very dissatisfied Don't know

Agri-business Member Comments 3: Concerns with AgriStability

Timeliness: “It takes a long time to get paid. Nobody understands how [AgriStability] works! They must have a big wheel to spin to decide who gets what and then if it pays out it results in a long wait time.” – PEI, Livestock

Taxation Liabilities: “When we got a payout with AgriStability, we got the money in a year that we did not need it. So the net result was that it was taxed away in the profitable year. Money paid out for the poor year should count for the poor year too.” – Manitoba, Fruit, vegetable, horticulture

Low Reference Margin: “It is very complicated to fill out and it penalizes diversity. 70% coverage is just too low. We will be opting out next year.” - Ontario, Field crop

Concerns for Diversified Operations: “Doesn’t work for diversified operations: AgriStability is no longer effective, especially to farms with multiple commodities - triggering payment is almost impossible.” – Ontario, Livestock

Qualifying Criteria: “I am forced to buy crop insurance when I would rather have option to be in or out and still qualify for AgriStability.” - Manitoba, Field crop

Complicated Paperwork: “First, I don't think the programs will actually trigger any money for our business. Second, the programs are very complicated- it takes a professional to understand them (we use MNP). Third, if payments do come, they are very slow (years after). Fourth, why not just get government out of the picture altogether and simply lower our taxes and reduce red tape.” – B.C. Fruit, vegetable, horitculture


14 14

Some additional insight into ways to improve AgriStability can be gleaned from producers who choose not to use the program. Producers who are not using the program indicate that the top reason they do not use it is that they do not see benefits or value in the program (42%), others indicate that they are not eligible (32%), complexity of the program is too high (27%), unpredictable benefits (22%) and fees are too high (15%) (see Figure 13). Lack of awareness of the program is also a barrier to usage of the program (12%). Other concerns with the program that prevent usage are infrequent and untimely payments (10%), recent changes to eligibility of the program (8%), access to other programs that cover most of the risk (5%), and that some owners are exiting farming/retiring (3%).

Figure 13: You indicated that you do not use AgriStability, please select the reasons why you did not use the program. (% response among those who do not use AgriStability and are Primary Producers)

While AgriInsurance has a higher satisfaction rating among agri-business owners, there are some areas for improvement. Agri-business members mention that the program is cost prohibitive, and issues with adjusters (see Agri-business Member Comment 4 and Appendix B).

For AgriInvest, agri-business members highlight that they would like the investment limit raised, that the application criteria is too restrictive and the process is too burdensome (see Agri-business Member Comments 5 and Appendix B).

42 32

27 22

15 12

10 8

5 3

9 5

No benefits/value for me My business is not eligible

Program is too complex (might require an accountant) Benefits are unpredictable

Fees are too high Not aware of the program

Payments are too infrequent/not timely Recent changes to eligibility for AgriStability program

Other programs cover most of the risks Getting out of farming/retirement

Other Don’t know

Agri-business Member Comments 4: Concerns with AgriInsurance

“Crop insurance in Manitoba is based on the whole farm. We can lose a quarter, but the whole farm did too well for any payment.” – Manitoba, Fruit, vegetable, horticulture

“AFSC Crop Insurance: Cost is too expensive to acquire enough coverage for risk of cost of production. Yield claim levels are too low for producers to qualify for a claim of any significance, in a loss year.” Alberta, Field crop

“I’m not happy with Crop Insurance because the rates are too high for the amount of coverage you get. It’s like no one has any idea how much it costs to grow a crop.” – Saskatchewan, Field crop

Agri-business Member Comments 5: Concerns with AgriInvest

“I have a small farm business, but AgriInvest has extremely low caps on account balances based on your production levels. I was allowed to deposit $88 last year and it was matched by the government. Approximately 5 years after opening and maxing out account balances and matching contributions and not taking any money out I have $1885. This will hardly advance our farm business or provide a retirement prospect.” – Ontario, Fruit, vegetable, horticulture

”Criteria for applications are too restrictive and time lines for approvals too long.” Ontario, Field crop

“AgriInvest limit is much too low. Also, we have three family partners in our farm; if we operated as three farms we could triple our AgriInvest. This places us at competitive disadvantage.” - B.C., Fruit, vegetable, horticulture


15 15

It is CFIB’s hope that FPT governments are serious about making some improvements to BRM programs that address agri-business owners’ concerns and thereby produce meaningful results.

Priority #5 – Public Trust

Social licence is a new addition to the list of priorities for a national agriculture policy framework. This concept has been building on the heels of increased customer awareness, changing preferences, and interest in information about food production. Alongside these customer demands is increased attention from non-agricultural agents that can negatively threaten the industry through misinformation on social media and other online platforms. One-in-three (34%) agri-business owners believe a focus on this issue in the NPF will help their business succeed (see Figure 4). Farmers care about the sector and about providing safe and healthy food (see Figure 5), and it’s important this is understood beyond those in the agricultural community.

While Canada has one of the most reputable agriculture sectors, several misconceptions about the Canadian agriculture sector were identified in a study commissioned by the Agriculture and Agri-Food Canada (AAFC). A qualitative study was conducted by the Strategic Counsel on behalf of AAFC, consisting of 18 focus groups, completed across the country in December 20137

Misconception 1 - Agriculture is not innovative and modern.

. These misconceptions included:

Misconception 2 - The agriculture sector is shrinking.

Misconception 3 – Farming is unsustainable and potentially environmentally harmful.

Misconception 4 – Farming is moving away from family businesses toward corporate operations.

Given these findings, it is not surprising that dialogue within the agricultural community and among policymakers has been increasing to ensure the agriculture sector is positioned to build awareness and confidence in Canadian farming and agri-food production. Such collaboration will ensure the true face of farming is seen and heard.

In fact, CFIB’s report Realities of Agriculture in Canada busted these misconceptions by providing the farmers’ voice that the Canadian agriculture sector is innovative, farmers do protect the environment, they have plans for growth and farms are staying in the family.

In the What We Heard Report (see Reference 3), the government highlighted that managing an accurate and positive view of Canadian agriculture is important. Governments can help with communications on this front.

7Modern Agriculture and Agricultural Awareness Focus Groups: Final Report. The Strategic Council. Agriculture and Agri-Food Canada. http://epe.lac-bac.gc.ca/100/200/301/pwgsc-tpsgc/por-ef/agriculture_agri-food/2014/040-13/index.html

Reference 3 – What We Heard Report: “Consumer education and awareness activities are critical to building public trust and programming should be reflective of this important need... this can combat misinformation being spread through social media and will reinforce to Canadians and consumers worldwide that Canada has one of the best regulated food systems in the world, which can help reinforce public confidence in Canada’s food production systems.”


16 16

CFIB is concerned, at times, that in the face of uninformed public pressure or interest groups, governments make decisions that are based on pressure or impressions rather than facts. The resulting policies and communications can contradict the realities of agriculture. On this front, science-based decisions are necessary when it comes to making informed agricultural policy decisions, and sharing facts around these decisions are an important part of building public trust. Eighty-one per cent of agri-business owners agree that governments should make science-based decisions in areas impacting agriculture; 13 per cent disagree (see Figure 14).

In the Calgary Statement the government outlines that “in order to respond to growing consumer concerns about the food they eat and how it's produced, the agriculture and agri-food sector must work together to earn and maintain the public's trust, which it needs to stay competitive. By communicating proactively the sector can build on its reputation for doing the right thing... It's more important than ever for the agriculture and agri-food industry to find innovative ways to build a trusting relationship with their customers.” Further on in the document, the federal government sees their role in this area primarily as a regulatory one (see Reference 4).

The government has also committed to supporting industry-led communications and marketing initiatives to help maintain public trust. This is clearly an area that governments will need to be involved in a greater capacity than by simply regulating the sector. They should also play a role in championing the sector, raising awareness, and ensuring trend-based policies do not usurp science-based decision making. Some examples of successful communications strategies on this front include Agriculture Awareness Month and the Ag More Than Ever initiatives that are supported by a number of governments, including Saskatchewan, Manitoba and New Brunswick.


Governments should make science-based decisions in areas impacting agriculture

Total 81% agree; 13% disagree

49

32

8

5 4 2 Strongly agree

Somewhat agree Somewhat disagree Strongly disagree Don't know Not applicable

Reference 4– from the Calgary Statement: Government’s plans for public trust:

• Maintaining a strong regulatory system to ensure Canada has one of the world's safest food supplies,

• Supporting Value Chain Roundtables to ensure government and industry cooperate to improve processes and practices,

• Helping industry develop and update animal care codes of practice,

• Researching and supporting innovation and new technologies,

• Supporting the development of new tools to measure the sustainability performance of Canadian agriculture.

http://www.agr.gc.ca/eng/about-us/publications/agri-info-newsletter/agri-info-newsletter-november-2016/?id=1385758087741�


17 17

Other Policy Areas

Food Processing

Food processing is a significant industry under the agriculture and agri-food umbrella - producing shipments worth $106.5 billion in 20158

• Support targeted actions that leverage industry investments to increase productivity and competitiveness;

, which represents two per cent of the national Gross Domestic Product (GDP). Food processors are an important part of Canada’s agriculture sector, purchasing 39 per cent of Canada’s agricultural products. Food processing has not traditionally received as much attention under the national agriculture policy framework, but the Calgary Statement proposes amplifying the focus in this area through the following actions:

• Continuing to support the development and adoption of assurance systems;

• Enhancing public and private innovation capacity to increase the industry’s development and adoption of new technologies, processes and products to improve sustainability and efficiency and meet evolving global consumer demand; and

• Providing market access and development support for companies pursuing domestic and export markets and new growth areas.

While this is not one of our agri-business members’ top priorities for the framework, it is understandably more important to those in the food processing sector than the agriculture sector at large. That said, initiatives to support agri-businesses here should benefit the sector as a whole, and not represent a trade-off from primary producers benefitting from the framework.

Environment

Also included in the Calgary Statement is a focus on the environment and adapting to the federal government’s environmental agenda (see Reference 5):

Environmental issues are a concern for many Canadians, small business owners included – particularly agri-businesses. They feel strongly about environmental stewardship, and support engaging in conservation efforts, but also want to grow the economy and help create jobs. Some sectors have been particularly innovative in their environmental stewardship, especially those reliant on environmental conditions, including agriculture. Being environmentally friendly is important to the survival of their business.

Nearly all, 93 per cent of agri-business owners agree that their agri-business looks for ways to protect and preserve the environment (see Figure 15). Only four per cent disagree and three per cent say it is not applicable to their business. Clearly, there are strong sentiments toward environmental stewardship within the agriculture sector.

8 http://www.agr.gc.ca/eng/industry-markets-and-trade/value-chain-roundtables/food-processing/?id=1385742632592

Reference 5 – the Calgary Statement: “Support for environmental sustainability initiatives under the NPF will help the sector to address agriculture’s impacts on Canada’s natural resources, reduce greenhouse gas emissions, and mitigate and adapt to the anticipated impacts of climate change…”


18 18

As discussed in the Public Trust section of this report, there are many misconceptions about agriculture, including that farmers do not care about the environment. Farmers do care about protecting the environment and it is important that their efforts be recognized by governments.

Furthermore, in total, 93 per cent of agri-business owners have taken some action to protect the environment (see Figure 16). Top actions include reducing electricity usage (56%), investing in equipment, machinery, or vehicles that are more energy-efficient/environmentally friendly (54%), improving management of hazardous products (46%), making changes to buildings (44%), protecting water sources and waterways (43%). Other ways agri-business owners are helping is by protecting forest/trees/green-spaces/pastures (35%), used more environmentally friendly products (33%), reduced usage of fossil fuels (27%), sold or produced environmentally friendly products (22%), protected endangered species/wildlife habitat (20%), used green-energy technology, like bio-fuel, wind or solar (11%). Only seven per cent did not take on any of these actions.

Figure 16: Which of the following actions has your agri-business taken to help protect the environment? (% response*)

Total: 93% took action; 7% ‘None of the above’

*Note: This sample includes all agri-businesses and therefore differs from the Realities of Ag Report, which only

looked at primary producers in 2014.

56

54

46

44

43

35

33

27

22

20

11

3

7

Reduced electricity usage (e.g. energy efficient lighting)

Invested in equipment, machinery, or vehicles that are more energy-efficient/ environmentally friendly

Improved management of hazardous products

Made changes to buildings (e.g. insulation, windows, doors)

Protected water sources or waterways

Preserved forests, trees, green-spaces, pasture, etc.

Used more environmentally friendly products

Reduced usage of fossil fuels

Sold or produced environmentally friendly products

Protected endangered species/wildlife habitat

Used green-energy tech (e.g. bio-fuel, wind or solar power)

Other

None of the above


My agri-business looks for ways to protect and preserve the environment.

Total 93% agree; 4% disagree

45

48

4 3 Strongly agree Somewhat agree Somewhat disagree Strongly disagree Don't know Not applicable


19 19

Solutions

Governments should recognize the efforts agri-businesses are already taking to protect the environment. As a sector of price-takers who are heavily dependent on inputs, like gasoline, financially incentivizing new greener technologies can help farmers do even more. CFIB encourages governments to consult and take a partnership role with farmers when it comes to approaching climate change. Farmers are closer to the land and care more about it than anyone else.

The aim should be to strike a balance between policies that protect the environment and policies that foster competitiveness and help grow the sector. Introducing measures that significantly increase costs for agri-businesses can prevent many from being able to innovate and implement environmentally friendly measures in their business that could help to reduce their environmental footprint.

In particular, agri-businesses could disproportionately feel the impacts of a price on carbon, despite the significant steps they have already take to reduce their environmental footprint. The best way to support agri-businesses in reducing their environmental footprint is to ensure they have the necessary tools and capital to remain productive, create jobs, and innovate. To that end, CFIB urges the federal government to reconsider the introduction of a carbon price. Further to this, the federal government must carefully consider the costs to the small business community, particularly the Canadian agriculture sector, that would come from imposing additional taxes or adding to the regulatory burden.

Additionally, CFIB recommends tax credits, reintroducing the Accelerated Capital Cost Allowance so farmers can write-off equipment more quickly and continue updating their technology with more environmental options as they arise.

Conclusions and Policy Recommendations A competitive landscape is key to the future of Canadian agriculture. Policies that encourage innovation and drive productivity are needed in order for agri-businesses to take advantages of growth opportunities. As federal and provincial agriculture ministers work to develop the NPF, CFIB urges them to address the agriculture sector’s competitive challenges and focus on farmers’ top priorities, particularly red tape reduction. Governments must develop a solid plan to support the future of agriculture that will deliver bottom-line results at the farm-gate.

FPT governments have a significant amount of work to do to ensure the NPF is relevant and useful to the agriculture sector, particularly the primary producer. The agriculture industry in Canada is a large, diverse industry with many players. However, it is important to note the foundation of the industry pyramid is the farmer. Governments must address the views of the farmer to create a solid base for this sector.

CFIB offers the following recommendations for the development of the NPF:

Make regulatory reform and red tape reduction a priority in the NPF. Cutting red tape to improve the ease of working with government is a critically important way governments can remove unnecessary barriers, support innovation and increase productivity in agriculture. Policymakers can show they are listening to farmers by including their top priority in the NPF. CFIB would like to see a commitment to measure red tape in the agriculture sector, implement regular tracking and reporting, as well as setting goals for reduction to the total burden. We believe provinces should follow British Columbia’s lead in passing a law requiring government to report annually on regulation. This policy is a first in Canada and is welcomed by agri-businesses.


20 20

Reduce the overall tax burden on Canadian agri-business. Focus on tax reductions that would be most helpful to agri-businesses, especially payroll taxes and property taxes. Consider other tax measures such as increasing the CCA for agricultural equipment to more closely resemble depreciation rates in the United States. These tax reductions will improve the competitive landscape and also allow farmers to invest more into growth and innovation.

Other ways to address the total tax burden on agri-businesses, include:

o Implement the planned reductions to nine per cent for the Small Business Deduction, which would help business owners reinvest in their businesses and their employees; and,

o Put in place a permanent lower EI rate for smaller companies, including agri-businesses, or an EI holiday for youth hires.

Work diligently to improve market access for Canadian agricultural products. Expanding market opportunities will support a strong agriculture sector; securing and maintaining trade deals with our major trading partners and emerging markets will be key to achieving growth for the sector in the coming years. We hope governments continue to explore new opportunities to improve market access and deepen our trade with long-standing trading partners like the United States and Mexico and in other major markets in Asia and Europe.

Increase focus on industry R&D, and innovation. Encourage agri-business owners to increase investment in innovation and boost their productivity growth by removing excessive taxation and regulatory burden.

Design more responsive business risk management programs to ensure they are simplified and more predictable, transparent, timely and accessible.

Assist Canadian agri-business owners with public trust by not just regulating the sector, but by championing it and debunking the public’s misconceptions about the sector.

Methodology CFIB is a non-partisan organization exclusively representing the interests of 109,000 small-and medium-sized businesses in Canada, of which 7,200 are agri-business owners. The majority of our agri-business members are primary producers. CFIB is entirely funded by our members and takes direction from them through regular surveys on a variety of issues. The Federation believes farmers, in their capacity as entrepreneurs, require strong advocacy with respect to the business-related issues of farming.

CFIB’s research capacity is second-to-none because the Federation is able to gather timely and concrete information from agri-business members about business issues that affect their day-to-day operation and bottom line. In this capacity, CFIB is an excellent source of up-to-date information for governments to consider when developing policies for Canada’s agricultural community.

This paper presents findings from a new online survey, completed by 798 CFIB agri-business members between October 21 and November 8, 2016. The survey has a margin of error of ±4.5 per cent, 19 times out of 20. The respondents are balanced between three primary production sectors and three agriculture-related sectors:

• Livestock (30%),

• Field crop (24%),

• Fruit, vegetable and horticulture (16%),

• Food wholesale and supply for agriculture (14%)

• Ag services (10%)

• Food processing (6%)

www.cfib.ca

Appendix A November 2016

Agri-business members’ comments Please outline a specific example(s) of a government regulation that holds back innovation in your agri-business and how it has impacted your business. British Columbia Livestock

We are spending time battling useless inspection regulations, while government is allowing essentially uninspected products to enter our market; somehow we are supposed to be able to compete? For example: we are a provincially inspected processor; we sell poultry products to a distributor in Vancouver; that distributor moved the product interprovincialy; CFIA has charged us with contravening the meat inspection act! This is a fully inspected product! Meanwhile, the CFIA have approved imports of poultry products from Hungary based strictly on a document review to determine "equivalency in food safety standards", but have not confirmed if said food safety standards are being enforced. All they do is inspect the first 10 loads that enter Canada and then spot checks thereafter. If it’s good enough for foreign plants to have this luxury, why isn't it good enough for Canadians? (BTW - CFIA's own Manual of Procedures requires them to do on-site reviews of all foreign plants that want access to our markets)

New BC Water Act, it's costing us more to operate as well as making the government way too top heavy! They won't give us clear answers on what is required and we continue to get mixed messages.

The foreign worker shut down stopped our business from bringing in highly trained food processors, technicians are not available in Canada nor are we able to get training support to train three people for years to raise the level of skills to our standard. Cost $100,000's in lost sales.

Fruit, Vegetable and Horticulture

We are restricted from bringing certain varieties of trees into BC from elsewhere due to a quarantine, even though our location is subject to the same quarantine, thus no new or better varieties. We should be treated like every other quarantine area so we can move plants as they do.

Workers’ compensation is now so powerful. We need to engineer things that are simple farm equipment.

Ag Services

As a retail store there is a lot of regulation of products such as tracking feed, pesticides and other burdensome paperwork.

It takes a long time to get a license for a new winery and even longer to get a license to grow medical cannabis.

Agri-business Member Comments on Government Regulations

2 2

British Columbia (cont.) Ag Services

The fertilizer registration process is becoming more expensive, less effective (they got rid of the need to prove efficacy (not good) and kept the need for proof of safety (good) and to meet labeling standards (good) but they have not improved service. It's still slow and onerous. They keep trying to change their processes to improve speed of registration and it still takes too long to get a new registration or a major label change. By removing the need to prove efficacy (the industry was not asking for this) they removed the remaining important barrier to entry that helped keep out the 'bad' players, so they actually have encouraged the cheaters to keep on doing that and because the CFIA doesn't have staff to enforce much anymore the cheaters can get away with just about anything, yet we still have a slow, cumbersome system. Does this impact innovation? Yes it does. Does it make one think twice about investing capital to improve one’s business? Yes it does.

My teenage children cannot use equipment in shop. They are a part of the business and because of Bill 6 they are not able to participate in the R&D of our pollen production.

Food Wholesale and Supply for Agriculture

The time to do deal with regulated items.

Alberta Livestock

Time for forms for tracking average production.

The introduction of the new carbon tax will seriously impair almost all agricultural innovation. Innovation and the movement into environmentally friendly usage of such products on any level requires funds which will now be put into tax that will be spent in other countries.

Trying to access the Growing Forward 2 program and the criteria always needs to be adjusted in the wording just to be accepted.

Expanding our dairy operation. It took two years for approval of the permit. Consequences: The bank we were dealing with withdrew their financial support.

Give dairy farmers the opportunity to sell raw milk. When the carbon tax goes through it will be a disaster.

We have not registered with CFIA because of the amount of red tape involved. Thus our sales are limited to direct to consumer instead of including wholesale.

Bill 6 and the acts it represents have brought considerable uncertainty to what is expected in our operation. Without a clear direction, we run considerable risk of being offside with the rules. Further, it makes any longer term investment more risky; as we don't know if our industry can thrive in the new work (this comment includes Bill 6, CO2 tax and the looming increase in electricity prices (shutting down coal power for green power).

Government red tape has kept a new slaughter facility from opening in Calgary.

The National Energy Board, and the Alberta Energy Regulators are impacting us in terms of losing carbon sequestering of our soils from disturbance of soil structure, and heat generation from insufficiently burying the pipe under the determined frost line of 2 meters in this area. Also these companies have not fully adopted a proper Biosecurity plan to mitigate any crop or soil born diseases. So far we are only seeing basic Clubroot protocol for canola, and that is not being policed, nor is there a provision for landowners to protect their own lands and crops from evasive weeds, and diseases introduced by these energy companies.

Our business is held back by having all kinds of rules that are more restrictive than our #1 competition our big neighbour the USA and then we try to compete with them and try to sell our products to them and the rest of the world. We can't be competitive if we don't have the same tools in our tool box!


3 3

Alberta (cont.) Livestock

The amount of time required getting approvals for manure management and building applications due to NRCB regulations have been a hindrance. The level of excessive and over scrupulous regulations from individuals that don't understand the true environmental impact, but rather run on perception rather than reality has created a significant slowdown of innovation in building and investing in innovation.

Workers’ Compensation program.

Rules and regulations regarding Milk Tank design. The United States have upright milk tanks which are more efficient to cool and clean, as well as faster to empty (less pumping time for milk trucks). They are not allowed in Alberta as of yet. Rules and regulations regarding new building permits are very slowly processed which hold back efficiency, which in turn delay innovation.

Innovative approaches to water treatment, Carbon tax will apply to natural gas heating and food production and is counterproductive to investment. Some tax applications are actually counter to energy efficiency.

Slow approval process for new chemical registration.

The procedure of permits and time and money involved has made us decide to push back some projects.

Access to the use of foreign labour.

Field Crop

I have applied for a government grant to purchase sectional control for our new air drill back in July. The new drill is coming in January and we still have not heard a thing as to approval or not. This is a $22,000 option to better the environment and may not be viable without the extra assistance. How long does it take? It is so frustrating when they have these programs in place, we apply, and they can't give us any feedback as to what is going on. The drill will be in my yard before they get their act together.

Carbon tax that is looming, the WCB for all farm workers, the overtime that is coming for farm workers, all these things make people scared to spend money which in turn hurts many businesses that live off the agriculture industry.

Provincial mark ups on value-added products are higher than other provinces. Government distribution systems are too expensive. Government grants too difficult to obtain; lack of assistance from government departments. These lower our profit margins and leave us less than we need for marketing/innovation.

Environmental assessment on private property, which is currently cultivated. Any low laying land that has had water in it for a two week period, would be classified a wet land. In this case, a road project between two urban centres is halted because of the recent wet weather. Leaving sloughs that were previously seeded. Under the current legislation, there now needs to be an assessment. In which any land deemed a wet land where the highway goes through now has to be traded. This means that Alberta transportation now has to pay ducks unlimited $17,000/acre to replace the wet land they are about to go through. The problem is, it is on private property which is cultivated. And it isn't a wet land at all. The project is halted for at least 6 weeks. Which means no work will get finished till spring.

The process to approve new seed varieties and chemicals is far too cumbersome. It needs to be streamlined.


4 4

Alberta (cont.) Field Crop

We are very concerned as to how Bill 6 is going to affect our being able to do our work as agriculture is very based on getting good quality products and weather, timing is everything.

Permit process for developing water sources for livestock.

Bill 6 is an extreme example of hindering productivity in family farm operation and progress.

Bill 6, the threat of union infiltrating our relationship with our workforce. Everybody is talking about how to reduce red tape and paperwork and every year we get to do more! This is despicable! The consumer is manipulated by green peace and friends. My biggest fear is that this wave will spread from Western Europe to here and we will lose a bunch of tools in agriculture that will make our life as a farmer a lot more difficult. Farmers are vilified by these groups and there is nothing we as a group can do. We need vocal allies in politics and other industries.

Wanting to set up an irrigation system for some lighter land bought specifically for that purpose. Gaining access over some crown land and rights to draw water from the river has been a long and frustrating process with no positive indication of success at this time. Area of concern is in the province of Manitoba.

Restrictions on letting us clear brush off our land.


Cross-provincial trade barriers in the vegetable industry. Poorly thought out government regulation (Bill 6 - Alberta).

We are looking for less red tape, not more.

Carbon tax imposition will increase our cost significantly while our competition in other provinces receives rebates.

Ag Services

Length of time it takes to bring new technology to the market.

They are taxing us to death.

The ever changing rules of the NRCB and its slowness.

Slow and not a simple process.

Proposed OHSA rules for farmers have put a damper on their purchasing decisions as they wait to see how these rules are going to impact their farming operations.

Mandatory adoption of already outdated trace-back technologies for livestock.

Registration process for new products.

Manure application regulations and road use for farm equipment.

The overall red tape and regulation is getting too much.


5 5

Alberta (cont.) Food Processing

Complications of interprovincial trade, i.e. provincially inspected (meat) processing should be allowed across the Canada. Federally, rules are prohibitive in complexity and cost.

During the building process of the new shop.

With carbon taxing being implemented we are not sure of full impact and therefore withhold upgrades till costs are known!

All the paper work (policies, procedures etc.) that have to be done and approved just to attempt a new product it makes it not worth doing.


As a manufacturer of products which are used to replace antibiotics used in livestock/poultry/aquaculture, the guidelines to have them approved with label claims in Canada through the CFIA takes years, even though the data is supported by peer reviewed data and published (in the highest accredited scientific journals). This process stagnates the science-based companies in Canada. If those companies are only able to market in Canada it is essentially a dead end for them. We are fortunate that we are international in scope and are able to sell our products and technology outside of Canada.

In the municipal government, they charge excessive fees for any development or changes to property or on-farm businesses. The taxes for Ag businesses are the same as for petroleum businesses, e.g. M&E tax. Provincially, the government has no basic knowledge of agriculture and its value structure upon which it is based, which puts fear into any development or ideas we may want to pursue because it requires base line education in the appeal before even getting into the mechanics of your proposal.

Other

Currently, trying to expand into the pet food market. As a Provincial establishment, shipping outside of the province is a very "grey" area, with not much guidance in the area of interprovincial shipment and sales. Even though the sale of pet food is basically unregulated, neither provincial or federal agencies will step up with answers and they both refer to the other agency to help out.

It takes a lot of time that can be better spent making innovated improvements. There is also extra cost related to government compliance such as, ear tags and time invested in compliance of regulations.

Truck inspections: the nature of our business requires trucks for just a short period in time over the 12 months of the year but yet we have to inspect the truck each and every year even with a very low amount of kilometers or hours that have been put on the unit. Administration time: The time to administer all the government documentation for GST, Government surveys, employee remittance, corporate tax, rebate/refund forms and etc.

We would like to replace our aging poultry processing plant, but have not moved forward due to the challenges of receiving approval from municipal government, Alberta Environment, NRCB, CFIA , Alberta Agriculture without upsetting our current ability to operate.

Carbon tax is going to be a huge problem and the WCB on the farm with my children and hired help.

PMRA and health Canada approval process for new products, almost impossible for small business.

Archaic laws banning raw milk. Quota systems limit the free market.

Saskatchewan Livestock

Ever changing sanitary and phyto-sanitary regulations around exported products.


6 6

Saskatchewan (cont.) Livestock

TFW process, paper work and process is out of date with today’s technology, a simpler application system is needed. We should be able to apply much earlier so if a TFW is denied entry into Canada that there is time to get another TFW at the required time they are needed.

Field Crop

New products coming from other countries.

Very slow approval of new weed control chemicals for minor crops, e.g. canary seed.

Removal of water from fields.

Too much paper work when it comes to government grants.

1. If we want to accept grants for environmentally friendly fuel tanks. We did the paper work & met with the govt agency --then found out we had to write letters for everything we tried to purchase & have them accepted or rejected. We decided it wasn't worth the effort & bought ordinary tanks with our own money. 2. In many cases, if you accept money to help with the environment on your farm, that agency had a strong say in what decisions you make even though they don't have the same experience the farmer does.

There are so many grants that have been available, but at the time they were available I didn't have the money to act on them or didn't know about them or the red tape made it take so long I just got frustrated with it.

Introduction of new products for control of weeds and fungal infections in crops.

Not allowing new chemicals onto the market that will help us combat the chemical resistance in some weeds.


Municipal regulations regarding signage, parking, licensing, etc.

Ag Services

Regulations as to SRM handling and logging of animals that are not going to end up in the food chain.

The difficulty and time required to get permits to grow, process, and ship industrial Hemp. This often holds up shipping for up to 2 to 3 months.

Other

Carbon tax will significantly affect my bottom line.

There is no government backing or defending patent rights so why spend all the time and money when big companies come in and take the technology and tell you they will just drag you through court until you have no more finances.

Manitoba Livestock

The last provincial government just about destroyed the hog industry in Manitoba with all those regulations.


7 7

Manitoba (cont.) Field Crop

Currently an organic mite treatment for treating varroa mite disease in beehives is registered to one producer of a product that is $4.35 per colony, there is a much more reasonably priced product produced in Canada with exactly the same organic product, but it cannot be sold to and used by Canadian beekeepers. It is sold to Europe and the USA, I would love to buy and use this product and it would save me money and allow me to use more natural and organic product more often.

Untrained staff that sets their own rules or guidelines. Far too much wasted time.

Water resources won't approve permits. Takes forever to get approval of a grain dryer setup and there are ridiculous building code rules.

Water management in our water basin as allowed in eastern/central water basins.

On-farm processing of product and government regulations on facilities to process.

Ag Services

Regulations regarding NH3 that create a greater hazard, rather than increasing safety.


We cannot put a dealer plate on a new manufactured highway trailer, and drive it to a farm show with other display items on top of the trailer. A vehicle with a dealer plate may not be loaded, but a car with a dealer plates can have a passenger and a driver- the normal "load" for a car - go figure- just a tax grab to collect provincial sales tax.

Other

No municipal tax breaks for environmental improvements.

Ontario Livestock

Paperwork in everything we do, audit, applications, records, etc.

Would like to do on farm processing, but it's a very difficult and lengthy process.

Access to import and export permits in a timely manner. Also, CFIA offices in various regions having a different view of the same regulation. CFIA vets, on farm, not trained to be on the farm (they are paper vets). CFIA slow policy review and lack of structure to formally view and review a region office decision that affects business for both exporter and importers. CFIA programs that are viewed as positive and extra-value added that are actually out of date and no longer relevant ex: Leucosis free herds (silly program which has no relevance in the industry any longer, but blocks access to obtaining health permits for animal import and export).

Getting any kind of funding seems to entail red tape.

Regulations and/or restrictions put in place not based on sound science that prohibit advancements in crop protection-these regulations also scare off some possibilities of new advancements due to people/companies not wanting to invest in the research or infrastructure to introduce something new into a market where policy may not be friendly to its long-term use.

Every time we apply for something, we have to report some financial information. The information categories should be the same for banks, tax purposes, census, etc. It is hard to go back in the books and separate information.


8 8

Ontario (Cont.) Livestock

When wanting to build, all the paper work, people you have to deal with, makes you not want to.

Regulation on land, how it is used, and water rights.

[Difficulties hiring] foreign labour, slowing our operation from expanding because no one in this country wants to work.

We are aquaculturalists. For all the growth in our area of agriculture, government on all levels do not acknowledge and treat aquaculture like other forms of agriculture. We have been told it is not agriculture. Municipalities do know or understand our type of farming.

Red tape, all the new regulations that have been put in place and more that are on the way, i.e. carbon tax!

Having to complete courses before you can apply for grants.

Would like to have three phase hydro on the property, but government/Ontario hydro has unrealistic expectations from it.

The overall tax burden and the recent reassessment of agricultural land values for increased property taxes will cripple a lot of the future farm improvements and reinvestment to keep operations going. Electricity costs have already doubled in the last year.

The myriad of rules and record keeping requirements for on-farm feed manufacturing is a detriment to doing it.

Property taxes are too high. Every time we do a building project, taxes go up on the buildings.

Building permits and environmental restrictions.

Growing Forward 2 - onerous slow application process. Some completely ridiculous nutrient management laws that are not consistently applied, and in many cases make no sense. Nutrient management rules are enforce/interpreted by people with no practical knowledge or experience with regards to farming operations.

It looks like the Government is more interested in lobby groups than scientific research to set policy, i.e. Neonics.

Field Crop

The neonic rules are a pain, especially in light of lack of scientific proof/data that actually proves that it’s killing bees, when poor beekeeper stewardship is one of the main culprits!

Time it takes to do the paper work and then having to wait six weeks for getting an approval.

Because we are overregulated, it adds costs and drives business away.

Time wasted on government red tape. Time!

Pesticide restrictions that are not scientifically backed.

Hydro. With the cost of hydro and all the windmills and solar driving up prices, I have to become a lot more efficient in my business just to expand, because the cost is so prohibitive. Also minimum wage has also made me very careful on expansion and has seriously made it harder on students who are looking for work, because of the wage per hour I need ones with work experience.

Documenting pesticide use and control.

Neonic training and paper work that is time consuming, ineffective, and no reward or incentive to solve the problem.


9 9

Ontario (Cont.) Field Crop

I rely on an ACC loan each spring as an operating line of credit. Government regulation and policy changes made me no longer eligible for this operating line of credit. I have had this loan many times in the past and repay everything borrowed according to the timeline laid out. Never had any issues. Because I am not enrolled in Agristability, a recently introduce rule, I can no longer get the loan. Agristability will not work for my business. I have a tree nursery that operates in a 10-14 year cycle. Agristability is designed for crops that grow and are harvested within 1 year. Therefore I could never claim anything from the program. And it would cost me about $1,600 to be in the program. Cutting off a reliable form of borrowing money, limits my ability to operate this business and make upgrades and changes prior to spring harvesting. Changes to the off-shore labour program makes paper work far more complicated, time consuming and stressful. One mistake and delayed workers...

Red tape involved in purchasing seed.

If we expand our farming business to add value-added to the products we produce we could be reclassified at a commercial or industrial tax rate which would totally wipe out any extra income to our operation that we may earn. So what’s the point of adding value? We would in effect be penalized for the investments and end up with less income! To my thinking, any registered farming operation should be allowed to add income producing activities at no change to their tax rate or category. Especially if it adds a service to the community!

All labour regulations especially hiring SAWP employees. Food safety paperwork to prove due diligence. Too much time spent doing paperwork to appease governments.

Labour regulations make it too dangerous to hire employees that will help with innovation on my farm. I can't deal with the liability burdens that employee rights and government policies place on my business, so now I am a one-man show which makes me work much harder and leaves very little time to grow my business. But it’s better than dealing with employees.

Restriction on the use of neonics.

Food safety regulations cause me to avoid looking into value added innovations. I stick with other avenues of development towards lower costs or higher return, instead of being open to packaging and food processing options.

Safety regulations, Water permits, every kind of lenience you need to do something on the farm. One needs their life-time to read them and then hire some to understand them.

Controls on selling alcohol products and access to market controlled by LCBO.

Any government law/red tape that increases the costs and reduces profitability which results in less profit to invest in innovation. Example: planning limitations/restrictions at the municipal level.

Government red tape and paper burden takes so much time away from what I do. Too much environmental paper work as well as red tape to just spread manure on my farm.

So many new rules apply to the farm industry we are busy trying to get those implemented.

Overall compliance burden takes up too much time.

Most of the branches of government consider themselves enforcement and are critical of any undesired effect of new practices, but do not aid in developing new technologies.

My product is wholesale and I lose about 50% value due to red tape compliance to sell retail, it is very frustrating.

Too much paperwork. I feel fortunate that I have someone capable of dealing with it. Many farms do not.

Every time you go to do a project like building a building, there are many more layers to deal with. Building permits have increased requirements, engineering costs, and now they are proposing development charges on farm buildings. We also do nutrient plans.


10 10

Ontario (Cont.) Field Crop

I spend so much time looking after government stuff I have no energy left to be innovative. The paper work is horrendous, and as soon as you are finished that you will have an inspector here to make sure you are doing it correctly. Absolutely ridiculous.

It seems as though we are over-regulated, as most things we try to do we end up dealing with some form government intervention which causes delays, frustration, and money.

Registration of new innovative products; many already approved in the EU or the US.


By tying up our resources;by introducing new regulations.

All the forms are too difficult to fill out and you cannot get answers from the civil servants.

New Machinery must be installed in a CFIA plant in order for market access.

Sales into the USA are ridiculously prohibitive due to red tape and government regulations.

Programs such as Growing Forward.

All levels, such as added cost to build structures, shops, barns etc.

Tree seed zones have made it more difficult to sell products.

Health and safety regulations.

Carbon tax- cannot expand in Canada!

Cost of hydro and water, increased cost of employee minimum wages forces us to increase all wages, tax burden, paper burden, etc. All costs more to our business therefore leaving less profit at the end of the year for capital projects and the funding of innovative practices.

Significant amount of time has been dedicated to dealing with creating an Abatement Plan and applying for an ECA as part of the Ontario Ministry of Environment inspection that deemed we needed to produce this paperwork to continue using the pond we've had for 50 years that is used to divert rainwater off our greenhouses. Even though there is no water runoff from our operation going into this pond we need to complete these documents. Thus far we've done it in-house but one Ministry employee recommended getting a consultant (at cost of $9000+) to deal with it for us. This distraction is a major concern and distraction from the core of our business, wasting time that could be used to innovate and improve our operation.

Permits for environmental compliance. Cost of electricity for "green" projects (wind and solar) that are not actually green.

Products that are natural should not be regulated; it takes too long for products to be registered if they are already registered in countries from which we import foods.

Employment Standards restricts us from expanding.

As we are going to expand our currently existing greenhouse operation we ran into all kinds of requirements from our local and regional and federal governments. Different departments give different answers and they are definitely not always giving the same information. This is very time-consuming and costly. We estimate that the red tape is going to cost us approximately $1 / square foot of the new to build facility. Which is almost 3% of the total building cost, including all technology. In previous years this used to be somewhere between 0.1% -0.2%.

Government audits that shut down my business for four months and resulted in losing $200,000 this year. How can I invest if I lose money?


11 11

Ontario (Cont.) Fruit, Vegetable and Horticulture

Wine production is highly regulated and supply chain managed. Little innovation allowed.

Pesticide registration.

Paperwork burden and rules for the Growing Forward program.

Government taxes and red tape.

Funding and finding partners. Cost of grant writing.

CFIA approval process for various bio control products already used in other countries to control pest and diseases on crops.

Ag Services

Government registrations on new herbicides takes much too long for Ontario/Canadian use.

Being involved in nutrient management business it has caused us to employ more people just to meet the act requirements. Bottom line - more associated costs mean less income.

TSA approval for fans and burners not yet CSA approved. Some inspectors make us fix everything in sight, not just what we are specialized to do.

Food Processing

We have had 3 payroll audits in 18 months with no infractions. The time and effort to accommodate these audits, not to mention the numerous Stats Canada surveys, is very taxing.

Regulation 63/09 - Seed Treatments - specifically Neonics. Export: new requirements for soybeans to USA.

The government regulations are becoming too intrusive in our every day functions. It seems they want complete control over our decisions by adding more paper work detailing why they should be involved. They hire more staff to check on us, making sure we keep giving them the paper work they need.

The red tape burden on agriculture buildings and expansion.

We are so busy dealing with government and marketing boards it takes away from time managing our business.

Rules and regulations.


Timeline for registration approval of products and labeling by CFIA - Canadian Food Inspection Agency. Timeline ranges from 24-36 months compared to 3-6 months for the FDA in the US. It is a huge impediment to introducing new agricultural feed and fertilizer products in Canada.

Registration of new products takes too long and a lot of paperwork. Less likely to bring in/ develop new products.

Amount of time and information required for funding opportunities. Time to complete funding requests. Additional requirements from various aspects of government.

Growing Forward is too slow for approvals.

Process of building permits for new and innovative barns for livestock production.

EDC is too slow to implement contracts. Seed development through CSGA is too cumbersome. Working with Ag Canada (crossing boarder) is time consuming. FDA in US is becoming a big problem. Some shipments are held up for 4 weeks.


12 12

Ontario (Cont.) Food Wholesale and Supply for Agriculture

Government restrictions on proven safe herbicides and insecticides have made farmers keep detailed records of uses of such. New herbicides approved for the Prairies cannot be licensed for Ontario especially when they are necessary for our region.

Paperwork required for such programs as the GLASI application took time and multiple customers applied only to find out that funding was all used up and they would have to wait for funding again.

The nonsense rules for "neonic" class 12 seeds has created a whole level of paperwork that was totally unnecessary. The new discussions on “social license to farm” are another nuisance and complete waste of time.

Dealing with unqualified inspectors who use a printed manual to do their job. These same people have major power over my business (can shut me down if they wish) but cannot do their job without help. I spend way too much time educating and instructing them on how to do their job. In some cases I have done their paperwork for them and just had them sign it.

Other

Recently - Neonic regulations in Ontario. In no-till/reduced tillage systems we use the seed treatment to protect the seed from many insects in the soil. The treatment also protects the soybean plant from soybean aphids which eliminates the need for an insecticide treatment in-crop. Overall the use of this product reduces pesticide use. With very little thought on the consequences, or consultation with professionals in the Ag industry, the Ontario Government went full bore ahead, pushing their own/activists’ agenda. We have honey bees on our farms, plant trees, put up bird houses and fully understand environmental implications of our actions. We grow cover crops to protect the soil and life within the soil. This practice and future experimenting are at risk unless the seed can be protected from some of the negative insects in the soil such as wire worms. Innovation requires the proper tools be available!

Would like to increase production of solar energy on a net metering basis, but application costs are prohibitive ($35,000!).

We are in the process of trying to have Silicon approved for mixing into growing soil by CFIA. Silicon is the second most abundant element on earth - essentially it is "sand" and various forms of sand. CFIA has now taken more than two years to agree that we can incorporate this naturally occurring product into a growing mix for use on flowers, (i.e. not even for food crops!). Ridiculous!

Quebec Livestock

Whilst I agree in principle with environmental programs, I feel most farmers are conscientious, and caring that they will be innovative in solving or correcting problems that are specific to their business. i.e. manure handling systems. In other words let the government run its business, and let us run our own.

Going organic is very complicated and not the same rules in all provinces.

Selling our own products, it has never ending of regulations. For example, if I wanted a small butcher shop on my farm , I need to be approved by all levels of government, pay for a study, could be told no, meet all rules, takes a long time, pay for vet to check the meat, and I haven’t sold 1lb of meat yet!

New Brunswick Field Crop

HST and salary deduction remittances.

The whole egg quota system is one example. We raise organic eggs and cannot meet the demand due to restrictions on allowable numbers of birds. Purchasing quota is not economically logical or feasible.


13 13

Ag Services

Funding for Growing Forward was distributed unfairly. Applicants were not informed this was on a first come basis, yet a deadline date for applications was set. No funding to a good majority of applicants was available. Those that could use the funding to grow their business were left in limbo with a very sour and negative outlook on administration of these programs.

Nova Scotia Livestock

Allowing the price of our product to fall well below cost of production.

Food safety has added a lot of cost and time to running a dairy farm.

Wildlife permits and resources and zoo permits - renewals and issuing.

Ag Services

Requirements for commercial kitchen for processing of food for small scale farm and production.

All animal feeds sold must be recorded and assigned to each individual customer. If the customer doesn't want to tell you their name you cannot sell to them.

Other

Our business is totally Agri-business, but is defined as land-based aquaculture. The Aquaculture Industry in Canada is ripe for expansion, is overly regulated, but has a much smaller lobby with significantly fewer supportive programs than agriculture does. We feel this has to change radically to develop the tremendous potential of our marine, land based fledgling industry.

Grants are not released with significant lead time to apply. By the time they come out, the deadline for application is about seven days away.

Prince Edward Island Livestock

Inter-provincial trade laws - provincially inspected meat cannot be sold province to province.

All the extra costs like environment animal welfare taxes which other countries do not have are making our costs too high which make us uncompetitive.

Other

When we look for funding there is no one-stop shop. Innovation PEI, ACAO, NSERC, SRED, Dept of Agriculture, and various other initiatives.

Newfoundland and Labrador Fruit, Vegetable and Horticulture

Access to crown land and the time it takes to get approval.

www.cfib.ca

Appendix B November 2016

Agri-business members’ comments Please explain why you are dissatisfied with the program(s) you’ve indicated. Please be as specific as possible and include the name of the program in your explanation. AgriInvest Livestock

AgriInvest makes no sense. It is a government handout with no accountability or risk associated with it. It goes to all farmers with qualifying sales whether they need it or not.

AgriInvest and AgriStability both are more for the bureaucrats than for the farmer, especially AgriInvest. It feels like Big Brother is watching you, and takes too many office hours from the farm.

AgriInvest is simply too small a program. There are better investments to make beyond what the government matches, and the amount the government matches is not enough to be useful in bad years.

Fruit, Vegetable & Horticulture

AgriInvest limit is much too low. Also, we have three family partners in our farm; if we operated as three farms we could triple our AgriInvest. This places us at competitive disadvantage.

AgriInvest is capped too low.

Our agricultural business has been declining for the past five years. In my opinion the AgriInvest program should increase amounts to be matched, not decrease amounts for those with declining income.

I have a small farm business, but AgriInvest has extremely low caps on account balances based on your production levels. I was allowed to deposit $88 last year and it was matched by the government. Approximately 5 years after opening and maxing out account balances and matching contributions and not taking any money out I have $1885. This will hardly advance our farm business or provide a retirement prospect.

Field Crop

AgriInvest has no direct link to the agriculture climate and actually gives more pay out in good years than bad years.

AgriInvest is capped.

Very complicated surveys to fill out to join. Some programs we will never be able to receive benefits but have to pay into them.

Criteria for applications are too restrictive and time lines for approvals too long.

As crop prices decline gradually the program declines with them.

Agri-business Member Comments on BRM Programs

2 2

AgriInvest (cont.) Field Crop

Why are we even bothering to have these programs? The cost benefit vs. the paper work make most of these programs a useless endeavor. Money would be better spent hiring or developing technologies to do a better job of enforcing existing legislation and protecting illegal products entering the country such as spent hens and dia-filtered milk.

AgriStability Livestock

The tier system for AgriStability doesn't give a producer much change if claiming. One would have to be in a disaster situation to claim.

It takes a long time to get paid. Nobody understands how [AgriStability] works! They must have a big wheel to spin to decide who gets what and then if it pays out it results in a long wait time.

I receive very little funding from them.

It hasn't helped us to stabilize the market swings. This year it’s totally unrealistic.

AgriStability has been a wonderful program for accountants and other government pencil pushers. Because of its current structure it punishes farmers who are intelligent and ambitious enough to be diverse in their operations. It does nothing at all except cost a farmer money, unless he is willing to mis-report income in order to access government subsidies and funds.

AgriStability does not provide any incentive for crop insurance whatsoever. On the cattle side, it takes so long to get reimbursement it is usually too late.

The levels of support at which payouts are triggered are so low that you would need to have a complete disaster to get a payout.

AgriStability in different regions of Canada was inconsistent and indeed, individual interpretations were made that violated the principles of the program. Appeal was long and arduous and obviously exposed the risk of repercussions for future claims by the same reviewers.

AgriStability: compliance cost too burdensome to justify current indemnification threshold levels. Also subject to 'erosion' of value in long-term weak commodity price cycle

I am dissatisfied with AgriStability. The 'rules' of the program have changed over the years and you must have a severe decline in farm income in order for it to be of any use.

AgriStability does not work proper on a diversified farming operation.

AgriStability is too complicated and the reference margins are too low.

AgriStability is no longer effective, especially to farms with multiple commodities - triggering payment is almost impossible.

After paying annual fees for AgriStability and accountant’s fees for the submission of the application for the fiscal year, we have never received any funds from the program and have been a part of it since its inception.

AgriStability provides too little protection for what it was intended.

Field Crop

You pay substantial premiums with little hope of receiving from the program because we have diversified to stabilize our income.


3 3

AgriStability (cont.) Field Crop

It is very complicated to fill out and it penalizes diversity. 70% coverage is just too low. We will be opting out next year.

AgriStability does not work properly on a diversified farming operation.

AgriStability requires a substantial amount of paperwork and a hefty premium for a program that is not likely to provide any benefit for diversified and conscientious farm managers. It appears to be a program more designed for single industry producers and/or poor managers. We are a grain farm with a small feedlot and have withdrawn from AgriStability as all analyses (done with AFSC as well) concluded that the program is unlikely to ever benefit our farm at a cost of over $5000 in annual premiums.

70 % threshold is too low.

We had a difficult time obtaining monies that were due to us. With a lot of effort on our behalf the money was finally paid.

Doesn't work well with nursery sod.

Timeliness of potential payments. Payments occur in the following year, which has the potential of increasing tax liabilities.

Slow at processing and not able to rely on program for what level/amount of support you will get or when. Not bankable.

Very complex to fill out. Have to get our accountant to do it. Costs money that cuts in to the payout.

My accountant doesn't know exactly if it's worth being involved in it; he will know this year because he has some clients that if they don't trigger a significant payment this year he said we would better to cover our risk some other way. He doesn't know exactly what dollar value we are covered at.

They've changed the way you qualify with expenses making it almost impossible to ever get anything. Seems like a win-win for accountants and government only.

Very unresponsive.

AgriStability -coverage too low-trigger way too low.

AgriStability only pays out based on 70% of average reference margin, this is disaster relief just before I go broke. The same applies to crop insurance, premiums too high for the coverage available.

I am dissatisfied with AgriStability program because of all the expenses that they don't allow in the calculation process, also crop insurance because of the cost of the program for what we get out of it.

AgriStability - The program’s effectiveness was reduced with lowering of the payout limits and it is delayed on getting the money to farmers who need it. It is also a very complicated program and it is time consuming to move through the system if you have questions or need a re-evaluation. For our farm, it is delayed about 1 to 1.5 years from when the money would be helpful.

AgriStability - with them reducing the margin and not allowing some expenses to be used has made the program virtually impossible to trigger, even in a disastrous year.

AgriStability is not designed for farmers who diversify their operations to try and manage their own risk. The expenses that are non-allowable are totally unreasonable (example: if I hire a custom sprayer to spray my canola because I am busy spraying other crops at the best strategic time it is a non-allowable expense). Another example: repairs to my combine are non-allowable, how do you expect me to combine my crops if I don't maintain my machinery? For the last 3+ years we have had weather conditions on the farm that have affected our crops both in quantity and quality. Our experience has been that if we get close to qualifying for a payment the application is reviewed and expenses are disallowed so that we do not qualify for a payment. We are very seriously considering not participating in this program any longer.


4 4

AgriStability (cont.) Field Crop

AgriStability has been cut back from the introduction of the program and does not offer the support level it once had.

The production levels for returns are so low as to be unusable.

They have done nothing to improve our business.

Too expensive for what you could expect in payouts.

I am forced to buy crop insurance when I would rather have option to be in or out and still qualify for AgriStability.

The new AgriStability has been trimmed to the point that it would now only help a little bit if we had a complete disaster. Under any other circumstances it would do exactly nothing. It was a good program under Growing Forward 1, but it has become useless under Growing Forward 2.

AgriStability does not help my business at all since I am so diversified. Diversity is my own risk management and even in a poor year I was not eligible to receive funds out of AgriStability.

AgriStability is only a disaster program.

AgriStability: in the last two years my operating has had a loss. I have had to go to the bank and borrow extra money to pay my bills. AgriStability has not triggered a payment. Cash crop has a more difficult time to trigger a payment.

Need to increase funding for AgriStability, make it easier to apply without having to pay the accountant. Lower premiums for Production Insurance.

AgriStability program does not have predictable outcomes.

Fruit, Vegetable & Horticulture

AgriStability does not work for the nursery industry. Our crops have too many variables in size, harvest time, price, etc. The program just doesn't work for us but the government doesn't seem to believe that it cannot be fixed. Our products are not priced as a commodity that can simply be sold every year at the world price. They are multi-year crops and every farm has a different price structure. It just does not work. We need a whole new BRM program for nurseries and the government needs to realize that. In the meantime they are dumping millions into other sectors through the current BRM suite which reduces our competitiveness with things such as purchasing inputs or land, etc. for our crops.

Had crop failure with horticultural Nursery Crop fell below margin, and they deemed us not able to participate.

Won’t trigger payments even when total farm income is below zero.

The loss's to get any money at all have to be huge. The cut backs were so much from 85% to 70% makes it a joke.

First, I don't think the programs will actually trigger any money for our business. Second, the programs are very complicated- it takes a professional to understand them (we use MNP). Third, if payments do come, they are very slow (years after). Fourth, why not just get government out of the picture altogether and simply lower our taxes and reduce red tape.

I have stopped using AgriStability this year. It’s getting too expensive for the amount of help you may get.

AgriStability is way too complicated for the greenhouse nursery sectors.

Farms are getting larger, not smaller. AgriStability is capped too low. The 70% of margin decline required is too low. Most farmers are leaving because they are too diversified to ever reach a 30% decline.


5 5

AgriStability (cont.) Fruit, Vegetable & Horticulture

When we got a payout with AgriStability, we got the money in a year that we did not need it. So the net result was that it was taxed away in the profitable year. Money paid out for the poor year should count for the poor year too.

The only way you get assistance with the AgriStability program is to have an absolutely horrible year. Often the income comes in a good year and for tax purposes is not retroactive so the farmers pay extra tax in the good year with the extra income from the government programs.

AgriStability forms are somewhat confusing as to what info is to be provided. The forms have improved somewhat but are still too onerous. This program has never paid off for us yet significant time is involved in providing information that is already readily available through our income tax returns. Seems like a rather useless waste of time endeavor in its current format.

The AgriStability reference margin is too low; it needs to go back to 85%.

AgriStability punished diversified farms. Coverage levels have been dropped so far to become relatively meaningless in any form of diversified farm.

The margins have to drop too low for AgriStability to become effective. The fees paid for it are not an allowable expense for the program.

As the premium has been the same over the years, the level of security in case of sudden decreased sales (income) has been downgraded with AgriStability.

AgriStability rarely pays out anymore. There would have to be an exorbitant disaster for it to pay out. Our costs are skyrocketing in every direction and making farming from a global perspective not viable. Taxes (carbon especially), labour (wages tied to inflation, CPP growth, fears of a 2nd provincial pension), hydro costs, red tape (environmental especially), labour regulations are making things more and more difficult and risky; it can't go on like this. And then drop AgriStability funding all at the same time? The greenhouse industry is facing challenges on its growth, but is still growing - but it will not continue in Ontario or Canada.

The AgriStability program is just paper work and a cash grab. We never trigger a claim even when our production is down.

Wholesale & Supply for Agriculture

AgriStability - We have withdrawn from this program as of 2016 because the paperwork was too confusing (we did it ourselves) and too costly in time and money to have someone else do it. Also the deadline was the end of September when we are trying to harvest our year's income and not focus on paperwork. Also the 12 month periods for which they required the information were very confusing since the period of the marketing year is different than that the crop year.

Ag Services

In the years when your margins decline for us in 2014 they adjust margin so you don't qualify. Our accountant advised that if you grain farm it's unlikely you would be in a claim position unless you had disaster.

AgriStability is a hard program for farmers as it’s a guess to what is in a bin and then having to reconcile it.

AgriStability is a program that is difficult to predict what the benefits will be.

AgriStability - we had a very poor growing season and in 2013 our financial statements reflected that. It was probably 18 months before our claim was processed and we were declined any funds from the program. We are not sure what our financial situation would have to be to ever be in a claim situation. It appears we pay into a program that we will never have a pay-out. Waste of time and accountant fees.

With the changes made in 2013 there is little chance of a payout.


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AgriInsurance Program Livestock

AgriInsurance always adjusts production in their favour when doing calculations for annual yield production. In several good years our numbers slightly increased. If it is a bad year our numbers significantly decrease.

AgriCorp's Production Insurance program uses aggregate numbers for each farm participating in the program. Therefore, our farm needs to experience poor yield results on all our acreage before qualifying for a PI payout, even though our land is spaced out over several miles. Different weather conditions make this an unlikely scenario. The program would be fairer if it would identify each property belonging to each farm participating in the program and insure the crops on each property individually.

The crop insurance program does not appear to benefit me. Over 3 years my yields have been too high for it.

Crop insurance with the hail rider. They need to do a better job of training the adjusters for hail concerning corn.

I have never had a successful claim even when I felt it was warranted.

Field Crop

Crop Insurance needs improvements for specialty crops.

Poor adjusters or their guidelines need to be changed.

The cost of insurance is high and when you make a claim you have to pay more the next year.

AFSC Crop Insurance: Cost is too expensive to acquire enough coverage for risk of cost of production. Yield claim levels are too low for producers to qualify for a claim of any significance, in a loss year.

The crop insurance coverage levels are far too low, I would pay more premiums if I could insure for more value.

Crop insurance uses a total crop area total. You can have a major loss, but if you have your guaranteed bushels you get no payout.

Premiums for Crop Insurance are too high for a decent coverage. I’m not happy with Crop Insurance because the rates are too high for the amount of coverage you get. It’s like no one has any idea how much it costs to grow a crop. Decreased coverage. Would like to see an insurance that would at least cover my cost of production so wouldn't fall behind on those bad years very hard to catch back up. Not high enough coverage and too difficult to get a claim. Coverage is too low. Insurance should at least cover cost of production. Poor coverage for our area. Risk management programs are not specific enough when paying out of the program. Payouts are not enough in 2015 & 2016 to even begin to offset the losses on the farm. Farms are producing food for this country and many are not making enough to put food on their own tables because the government is not looking out for these folks. It is a very grim future for the family farm.


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AgriInsurance (cont.) Fruit, Vegetable & Horticulture

High crop insurance, because you average your years and you do not insure your yearly potential it is always less.

We have been waiting for 3 years for a payment. How can that save you when the chips are down?

Crop insurance in Manitoba is based on the whole farm. We can lose a quarter, but the whole farm did too well for any payment.

Ag Services

Often, the insured price is calculated to be so low as to not make buying the insurance worthwhile.

As for hail insurance why does a policy not become effective till noon the next day even if it is purchased before noon?

AFSC often takes six months to let us know if they have questions and we have completely forgotten about a year ago. I don't know anyone who has gotten a payout and it’s been tough a few times.

Western Livestock Price Insurance Program Livestock

WLPIP provides very little incentive to invest. The payouts are far too little to provide any significant relief for depressed prices.

They cancelled my eligibility because I didn't have cattle figures for 1996 when I had no beef cattle. I explained several times, but they did not accept my numbers.

Ag Services

WLPIP the premiums go up and the coverage drops and I have no idea as to how they decide the settlement days and also hours of operation.

General BRM Comments Field Crop

I am dissatisfied with all the programs; it is too hard to get anything out of them. Yes, its money for nothing, but it seems that all we do is fill out forms and go to meetings to be eligible for programs, then, when you are finished they tell you that there is no money left, or you don't qualify. So I got tired of it and just went about my business, which is what the government wants.

Documents

Research November 2016 - CFIB · taxation and regulation, business risk management programs (BRM), market access, research and development, innovation, labour, and education. The