The price of gasoline went up about $0.14 a litre Thursday in Ontario and Quebec. This had gas prices at about $1.77 a litre in Ontario and up to $1.90 a litre in Quebec. There were several reasons given for this increase: changing over to summer blends of gasoline, the tensions in the Middle East and the higher price of oil. However, as Canadians, I think we know how our oligopolies work. It makes it very easy for very few firms to increase the price of gasoline in select regions of the country.

It certainly doesn't make me happy, and it certainly would make many farmers quite growly around the country. Surely it is also very inflationary, but who knows. The price of gasoline is always kind of an enigma in Canada. I would hate to decipher the amount of tax on each litre of gasoline consumed. The price of gasoline is often a poster child for those who are dissatisfied with the government.

This all happened in the aftermath of the federal budget released this past week by Deputy Prime Minister Chrystia Freeland. This was a federal budget which proposed $52.9 billion of new spending over five years, including 8.5 billion in new spending for housing. To fund much of this spending, the government is increasing capital gains taxes by boosting the inclusion rate to 66% of the gain over $250,000. However, the government did increase the capital gains exemption up to $1.25 million and indexed to inflation after that.

You can just imagine across Canadian farm country, there was lots of talk about the sale of farmland and the new capital gains taxes.

There was also budget talk about increased funding for Canadian biofuels as well as artificial intelligence and its application to agriculture. However, at this early stage who really knows. With an election not until October of 2025, the Liberal government is certainly trying to change the political narrative in the hopes of changing its troublesome poll numbers.

I don't do politics here as I've seen through the years it doesn't really matter which political party we have in Ottawa. The agricultural policy developed by both parties is sub optimal to me in so many ways. I have come to believe that the politicians involved in Ottawa regardless of political stripe are diligent Canadians doing what they believe is right. I simply have a difference of opinion on some of the policies that they develop. However, much of it is a function of the fiscal projections to come out of budget day.

The federal deficit is set to come in at $39.8 billion for 2024-2025. In other words, the federal debt just keeps building, but it is the lowest debt to GDP ratio of any country in the G7. We must remember that it was only four years ago that the federal deficit ballooned to over $300 billion in response to the pandemic. So, the federal deficit has been contracted 10 times since then.

It begs the question what is the future regarding future deficits and future debt and how that might affect Canadian agricultural policy moving forward? The answer will certainly lie politically at the end of 2025 after we have an election. If the liberals win the election at that time, it will probably be more of the same with more focus put on reducing deficits. On the other hand, if the Conservatives win, which certainly seems likely now, I don't see much different. It will simply be a different set of Canadians doing their diligent thing with government finances.

From an agricultural policy perspective, this gives me pause. I got a call today from Agricorp reminding me to pay my AgriStability premium April 30. This program used to be named Canadian Agricultural Income Stabilization (CAIS) during the Paul Martin era, hated by farmers who voted en masse in Ontario for Stephen Harper who promised to scrap it. Well, we know how we got to today. The name was changed to AgriStability and the premiums are due on April 30. The program is still margin-based and incomprehensible to almost everybody.

You can tell that it still wears on me, this policy failure. Amen. It was the quintessential example that political stripe didn't matter when it came to agricultural policy. Now that we find ourselves with expanding government debt, any new big initiative in Canadian agricultural policy is a non-starter.

Of course, I would welcome a surprise with regard to that. With Ontario cash grains prices under $5 for corn, $14.81 for soybeans and $6.74 for wheat, its certainly needed. However, it's just such a long and winding road. Hopefully, that new government money for Canadian biofuels will spur more value-added opportunities. I'm open to artificial intelligence as well. Federal budgets are what they are, just don't get your hopes up too high.

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Philip Shaw can be reached at philip@philipshaw.ca

Follow him on social platform X @Agridome

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