Ontario’s 2015 Budget: What’s in it for Food and Farming?
Posted: May 8, 2015
Categories: Food in the News / GoodFoodBites / News from Sustain Ontario / Policy News
“Building Ontario Up,” the 2015 Ontario Budget announced on April 23rd, lays out the government’s four-part plan for the province: invest in people’s talents and skills; build public infrastructure; create a dynamic environment for business to thrive; and build a secure savings plan. We’ve reviewed the budget to see how it relates to our 2015 Pre-Budget Recommendations, as well as reviewing some initial reactions from agriculture leaders in the media.
The Big Picture
The budget promises big spending on transportation infrastructure across the province, funded in part by the sale of government-owned assets including a majority stake in Hydro One as well as some valuable land and real estate. Overall spending is being pulled back, however, by approximately 5.5% across ministries with a few exceptions: health, education, post-secondary education and training, children’s and social services, and the justice sector (Building Ontario Up, p. 281).
The 2015 spending plan projects a $8.5-billion deficit, a $2.4-billion spending reduction from last year’s budget. The government is pledging to balance the books in two years. To do so, program spending will rise just 1.4 per cent this year, 0.8 per cent in 2016, and then face a 0.5 per cent cut in 2017, just in time for the next provincial election.
What’s in the budget for food and farming?
The Ontario Ministry of Agriculture, Food and Rural Affairs will see a slight increase in its budget, bringing it up to $1-billion. However, there have been no stated plans regarding recommendations to renew the Local Food Fund, to align program spending with the Local Food Act objectives, such as initiatives to meet the new food literacy targets, and to invest in value-added supply chains to grow regional markets.
The Jobs & Prosperity Fund, which includes a Food & Beverage Growth Stream, will see an additional $200-million investment (Building Ontario Up, p.94). The Food & Beverage funding stream is committed to creating sustainable jobs, enhancing innovation and market access, and strengthening supply chains in the food, beverage, and bioproduct processing sectors, with craft brewers singled out as a potential fit. However, eligible expenses must be greater than $5 million, limiting eligibility to established large scale operations. The Jobs & Prosperity Fund now totals $2.7-billion over 10 years.
As the final intake of the Local Food Fund closed in January 2015, there is now a significant gap in programming for small and medium-sized businesses and civil society organizations that do not fit the criteria for the Food and Beverage Growth Fund, and whose projects may not qualify for Growing Forward 2, given its focus on exports. We look forward to renewed programming that will fill this gap soon.
It comes as a surprise to see no renewed investments in the Local Food Fund or other accessible funding for small and medium agri-food businesses announced yet, considering the Premier’s challenge to the agri-food sector to double its growth and create 120,000 jobs by 2020 (Building Ontario Up, p.123), as well as the government’s recognition of SMEs’ major contribution to Ontario’s competitive economic strength (“Small and medium-sized enterprises (SMEs) account for over 90 per cent of all exporters in Ontario and have led the growth in exporting to foreign markets, focusing on niches such as quality food products,” Building Ontario Up, p. 105).
There is an important economic and environmental opportunity to take by supporting regional markets as well. Dollars & Sense: Opportunities to Strengthen Southern Ontario’s Food System, a research report released in 2015, shows that over 50% of food currently imported to Ontario could be produced within the province (Dollars & Sense, p.10). This research also shows that 3400 FTE jobs could be created by replacing 10% of Ontario’s top fruit and vegetable imports with locally grown products (Dollars & Sense, p.10). Providing financial support for these exporting small and medium sized agri-food businesses could be a timely, effective step for the government to take in supporting these transitions to meet the sector’s job creation targets.
Additional highly publicized revenue sources related to the food and farming portfolio will come from alcohol sale reform, specifically a new beer tax – the only new tax introduced – expected to generate $100-million annually and new grocery beer retail licenses (Building Ontario Up, p.85).
Regional Economic Growth and Rural Businesses
“The government continues to directly support regions around the province by making more than $150 million available annually through its funds. Regional and community development funds include the:
- Eastern Ontario Development Fund;
- Southwestern Ontario Development Fund;
- Northern Ontario Heritage Fund Corporation;
- Rural Economic Development program; and
- Aboriginal Economic Development Fund.” (Building Ontario Up, p. 95)
OMAFRA Minister Jeff Leal told Better Farming magazine that the Rural Economic Development program is the only agriculture program coming under review. (“National business organization casts critical eye on 2015 Ontario Budget.” Better Farming, 24 April 2015). As this program’s Advisory Panel is the same committee responsible for the Local Food Fund, we eagerly anticipate more details on this review.
In our recommendations, we also highlighted the need to review and adjust the Business Risk Management Programs (BRMP) in relation to the Pollinator Health Strategy to ensure that farmers would not be penalized for reduction in yield or income in their transitions to reduced neonicotinoid use. The government stated their continued support for BRMP with a view to making the necessary changes to support farmers through Agricorp (Building Ontario Up, p. 123). To this point, additional agricultural products such as livestock will be eligible for crop insurance under Bill 40, the Agriculture Insurance Act (Amending the Crop Insurance Act, 1996), 2015. (“Ontario bill expanding Agricorp insurance coverage passes second reading.” Canadian Underwriter, 13 March 2015). The bill was ordered for its third reading on April 16, 2015. Given recent outbreaks of animal diseases, this is good news especially for Ontario livestock farmers.
Infrastructure
With transportation and energy infrastructure as the major focus of the budget, it is also the target of criticism. NDP Agriculture Critic John Vanthof is among those cautioning that the sale of up to 60% of Hydro One could lead to higher rates and imbalanced/inadequate service for rural, low density areas due to lack of returns for private investors (“Agriculture & the Ontario Budget.” 27 April 2015). Ontario Federation of Agriculture President Don McCabe also wanted to see a reinstatement of a rural electricity rates program to provide some relief for rural businesses in the anticipation of increasing rates (“National business organization casts critical eye on 2015 Ontario Budget.” Better Farming, 24 April 2015).
Nevertheless, the government is making significant investments to expand natural gas access in underserved areas through Moving Ontario Forward infrastructure funding (Building Ontario Up, p. 57). Investments include $200-million to the Natural Gas Access Loan and $30-million to the Natural Gas Economic Development Grant. Community input on program design and expansion plans will be invited in the coming year (“Ontario Expanding Natural Gas Service To More Communities.” Ontario Newsroom, 24 April 2015). Expanding the natural gas network is anticipated to lower consumers’ energy costs.
Related Sectors
Base operating funding for education and healthcare will effectively be frozen. Globe & Mail reporter Adrian Morrow writes: “Much of the Liberals’ plan involves holding the line on funding for hospitals, school boards and other sectors – effectively compelling them to cut costs or find efficiencies. Hospitals have already shed registered-nurse jobs, while social agencies have cut their hours or made staff take unpaid days off. Some cities, grappling with the province’s rejigging of their funding formula, have cut back on daycares and other services.” (“Ontario budget touts transit spending, takes hard line on education, health.” Globe and Mail, 23 April 2015)
While we are encouraged by the government’s commitment to the Healthy Kids Strategy (Building Ontario Up, p.169), there is no further news on universal student nutrition program funding, a central recommendation. Significant related announcements in the 2014 Ontario Budget included $32-million over 3 years for Student Nutrition Program expansion. It remains to be seen how the 2015 budget will impact promising programs such as student nutrition programs, experiential education and food literacy in the curriculum, and enhanced nutrition services in hospitals. The budget document does highlight the current menu labelling bill, Bill 45, Making Healthier Choices Act, 2015, as an initiative that would support healthier kids and communities (Building Ontario Up, p. 169). If passed, the bill would make Ontario the first province to require food service premises with 20 or more locations that provide standard food items to post calories on menus. The bill was ordered for its third reading on April 30, 2015.
There is no stated reinvestment in the Healthy Communities Fund, which we highlighted in our recommendations as the only funding available to health units that allows them to aggregate baseline data and undertake research that they would otherwise have difficulty conducting. It is also the only funding available to public health units focused on policy development.
Education
“The budget holds kindergarten through Grade 12 education spending to an average of 2 per cent over five years; post-secondary is nearly frozen in that time. The province is pressing school boards to close schools, and is also taking a hard line in labour negotiations.” (“Ontario budget: A boost for businesses and a laundry list of transit projects.” Globe and Mail, 23 April 2015)
Even though the Aspirational Food Literacy Goals were released in January 2015, these funding changes do not bode well for the implementation and expansion of on-the-ground programs that promote food literacy such as school gardens, curriculum development, and teaching kitchens and other capital improvements.
Healthcare
“Overall, the healthcare sector will see average spending growth of just 1.9 per cent over five years. Given the relatively high cost of inflation in health care, this could amount to a cut in real terms.” (“Ontario budget: A boost for businesses and a laundry list of transit projects.” Globe and Mail, 23 April 2015)
With no renewed spending on health promotion (the Ontario Ministry of Health Promotion and Sport merged with the Ministry of Health and Long Term Care after the 2011 election), it remains to be seen how this budget will impact the broader public sector’s capacity to focus on local food, such as work to increase local food procurement for long-term care facilities.
Program Review, Renewal and Transformation (PRRT) Agencies
Two new agencies have been created to assess program impact and uncover spending efficiencies over the medium to long term: “A new Centre of Excellence for Evidence-Based Decision Making Support will be introduced within government to build capacity to assess how programs are performing, using evidence to inform choices and lead change in critical public services. The Centre’s work will also be supported by a new Behavioural Insights Unit (BIU) in government that designs interventions to assess programs and offer low-cost ways to redesign programs for better outcomes” (Building Ontario Up, p. 209).
These agencies demonstrate the increasing importance for sector-wide evaluation, including the creation of collective impact assessment tools. Sustain Ontario is contributing to (quantifiable) evaluation models through our new joint project on community food program impact evaluations.
Overall, the austerity of the 2015 Ontario budget and projected reductions in spending make it clear that, moving forward, recommendations to government will have to: show clear evidence for their implementation; and be revenue neutral, requiring no major expenditures from government. The province’s encouragement of public-private partnerships through initiatives such as the Social Enterprise Demonstration Fund, announced in February 2015, exemplify what we can expect of the future funding landscape.
Further Reading
Go to our 2015 Pre-Budget Submission (13 February 2015) to read our recommendations to help develop and implement on-the-ground, innovative solutions that will build healthy, sustainable, equitable and economically-viable local and regional food systems in urban and rural communities across Ontario.
S
ee our review of Ontario’s 2014 Budget and how it connects to food and farming.