Agriculture and Food a Key Economic Pillar in Canada’s Budget 2021

Author: Brady Chapman. This blog was prepared with the assistance of summer law student Reagan Munro.

On April 19, 2021, the Government of Canada released the federal 2021 budget (Budget 2021) entitled “A Recovery Plan for Jobs, Growth and Resilience.”

In Budget 2021, the Government of Canada signaled its position that Canada’s farmers are “major players in Canada’s fight against climate change.” Budget 2021 provides new opportunities for participants in the agricultural sector, identified as having “the potential to scale up climate solutions.”

This article provides an overview of the commitments made in Budget 2021 that may be of interest to Canada’s food and agriculture sector. For ease of reference, all headings below mirror those used in Budget 2021, which can be accessed in full here.

Chapter 5 – A Healthy Environment for a Healthy Economy

Developing the Canada Water Agency

  • $17.4 million over two years to for the Canada Water Agency to develop and support more resilient water and irrigation infrastructure in Canada

Price of Pollution Returns for Farmers

  • The Government of Canada intends to return a portion of the proceeds collected from the price on pollution in backstop jurisdictions (currently Alberta, Saskatchewan, Manitoba and Ontario) directly to farmers
  • The program is set to begin in 2021-2022 and it is estimated that farmers will be returned $100 million in the first year
  • Future annual returns will be based on the proceeds from the price of pollution in prior fiscal years, but the total annual returns are expected to increase on a yearly basis
  • The Government of Canada plans to announce further details on this program later in 2021

Agriculture Climate Solutions

  • Budget 2021 expands the $185 million already allocated to the Agriculture Climate Solutions Program and the $165 million Agriculture Clean Technology Program
    • $50 million of the $165.5 million Agriculture Clean Technology Program will be prioritized for the purchase of more efficient grain dryers for farmers across Canada
  • $200 million in additional funding will be provided over the next two years for on-farm climate actions, which will specifically target projects accelerating emission reductions
  • $10 million over the next two years will be used to assist farms in transiting off diesel and relying on clean energy sources
  • $60 million over the next two years from the Nature Smart Climate Solutions Fund will be used to target the protection of existing wetlands and trees on farms

Cleaner Fuels for a Cleaner Environment

  • $67.2 million has been allocated over seven years to implement the Clean Fuel Standard, which creates new economic opportunities for Canada’s biofuel producers, including farmers

Chapter 6 – Strengthening the Cities and Communities We Call Home

Supporting Food Processors Following Ratification of New Trade Agreements

  • $292.5 million over seven years will be used to help processers of all supply-managed agricultural products adapt to the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Support for Jobs in the Canadian Wine Sector

  • $101 million over two years has been set aside for Agriculture and Agri-Food Canada to support wineries in adapting challenges posed by Canada’s current trade obligations

In general, Budget 2021 provides opportunities for Canada’s agricultural sector. The Government of Canada views Canada’s agricultural sector as vital for Canada’s future economic and environmental developments.

Our agriculture and food practice group is well positioned to assist both public and private agriculture industry participants as they navigate the opportunities and changes arising from Budget 2021. We encourage you to reach out to a member of our team.

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.