AIC reacts to Budget 2019

March 19, 2019| Agri-food Innovation Council | Uncategorised

A number of positive measures for agri-food research and agri-food in general were included in Budget 2019. Some of these measures will support agri-food research.

Key measures include the creation of a new Strategic Science Fund, expansion of the SR&ED program ($395 million over five years), an allocation of $100 million to the Strategic Innovation Fund to support innovation in the food processing sector.

Other measures related to food, food production systems, education and rural priorities are also positive steps taken by the government in its last Budget before the coming election.

However, the largest announcements were certainly the $5 billion over 10 years to support rural broadband and the $3.9 billion earmarked to support supply-managed farmers in their efforts to adapt to new trade agreements.

“AIC welcomes key budgetary measures on innovation and rural broadband,” said Serge Buy, CEO of the Agri-food Innovation Council. However, he noted that “the next few months will provide critical information on the way the government intends to implement its promises – and this will be key.”

A list of key budgetary measures can be found below:

Research (with relation to agri-food):

The government is announcing a New Strategic Science Fund (page 123) – this is to be a new tool to support third-party science and research organizations. More information will be provided by the government over the coming months but the fund is to operate in 2022-2023 (page 123);
The Scientific Research and Experimental Development (SR&ED) Tax Incentive Program will expand its income threshold to enable more businesses to benefit from the 35% tax credit (instead of 15%) on qualifying scientific research and experimental development. The cost of this measure is expected to be $395 million over 5 years (page 380-381 and 352 and 429);
Support for Genome Canada – $100.5M over 5 years to launch “launch new large-scale research competitions and projects, in collaboration with external partners” (page 122);
Budget 2019 also proposes to allocate $100 million over 5 years from the Strategic Innovation Fund to support innovation in the food processing sector (page 162).

Food:

Support for priorities under the Food Policy for Canada (15 million over 5 years). Four areas for action have been identified: helping Canadian communities access healthy food, make Canadian Food the top choice at home and abroad, support food security in Northern and Indigenous communities and reduce food waste (page 161);
A new $50 million Local Food Infrastructure Fund aimed at food banks, farmers’ markets and other community-driven projects;
A Buy Canadian promotional campaign of $25 million over 5 years to promote Canadian agricultural products in Canada and abroad;
$24.4 million to the Canadian Food Inspection Agency to fight food fraud.

Regional, rural and agri-food priorities:

More than $5 billion in support for rural broadband over next 10 years. This was a key request by AIC – and many other organizations (pages 92-97);
The government will provide $15 million over five years to fund community-led projects for local and Indigenous food production systems. This funding is to be delivered by the Canadian Northern Economic Development Agency (page 101);
The government will provide $100 million (on a cash basis) to Western Economic Diversification Canada to increase its programming in Western Canada (page 113);
The government will use regional economic development agencies to fund tourism initiatives, especially in five sectors including tourism in rural and remote communities and “farm to table” tourism (page 113);

Education:

Let’s Talk Science is a program to engage youth (especially girls) in science, technology, engineering and math (STEM). The budget will provide the program $10 million over two years, starting in 2020-2021 to support its work (page 122);
Increased support for student researchers, including paid parental leave – $15 million and additional graduate research scholarships – $34 million over five years through the Natural Sciences and Engineering Research Council of Canada (page 309);

To help more students access graduate studies, Budget 2019 proposes to provide $114 million over five years, starting in 2019–20, with $26.5 million per year ongoing, to the federal granting councils—the Natural Sciences and Engineering Research Council, the Canadian Institutes of Health Research and the Social Sciences and Humanities Research Council—to create 500 more master’s level scholarship awards annually and 167 more three-year doctoral scholarship awards annually through the Canada Graduate Scholarship program.

Farming:

The sum of $3.9 billion is earmarked to support supply-managed farmers adapt to new trade agreement requirements;
A retroactive tax measure (for taxation years beginning after March 21, 2016) to extend relief to Canadian-controlled private corporations to sales of farming products to any arm’s length corporation. The initial measure was limited to businesses directly farming (page 207);
As part of its carbon-pricing plan, the federal government is proposing to expand relief of the fuel charge for farmers for gasoline and light fuel oil such as diesel (page 87).