Governments need to cut unnecessary spending

Governments should cut taxes. Governments should increase spending in key priorities such as health care and education. Meanwhile, governments shouldn’t run deficits. While the math says these three are incompatible, government budgets are simultaneously criticized on all three counts.

It’s easy picking for whatever party is in opposition. Even if a government has a lucky year and actually runs a surplus, it can’t win because then the cries become even louder for more spending.

Health care is insatiable even without the push to cover more dental and pharmaceutical costs. A school lunch program would certainly have benefits, but at what cost? Seems like a lot of people believe in the proverbial free lunch with little thought as to how it can be funded.

The population is already taxed 15 ways from Sunday. Meanwhile, the federal government and most provincial governments are running large deficits and piling up accumulated debt. In many cases, interest on that debt has become one of the largest expenditures. This is a huge drag on what governments can accomplish.

There is actually a way to cut taxes and increase spending in priority areas while decreasing and perhaps eliminating deficits. It’s to cut government spending in areas where they shouldn’t be spending money. Here are a couple examples from within agriculture.

Billions are flowing to dairy producers from the federal government to compensate for trade agreements. The first set of payments was to compensate for the impact of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

“As of 2024, the owner of a farm with 80 milking cows may receive compensation through a direct payment of about $106,000 in six yearly installments of a declining scale,” notes an Agriculture and Agri-Food Canada news release. It’s easy math to know what at dairy with 800 milking cows will receive.

But wait, there’s more. Another compensation package will make $1.2 billion in direct payments for the impact of the Canada-United States-Mexico Agreement (CUSMA). For 2023, the Direct Dairy Payment Program paid $459 million.

The payments are being made even though milk prices haven’t been reduced and quota allocation hasn’t been cut. Politicians of all stripes cater to the 10,000 dairy farms in the country and dairy has been promised no more trade deals that open the border to milk products, even if the opening is only a crack.

It’s time for government to have a backbone when it comes to the dairy sector. These are hard working people, but the sense of entitlement runs deep.

In the non-supply managed sectors of agriculture, AgriInvest stands out as a farm support that could and should be axed. Crop Insurance and AgriStability can be justified on the basis that they only provide support when things go bad. AgriInvest is free money annually even in years when a farm is very profitable.

The cost to federal and provincial governments for AgriInvest was nearly $315 million in 2023. That isn’t large compared to the $2.56 billion paid by Crop Insurance, net of premiums, but at up to $10,000 a farm, AgriInvest still a cost that governments shouldn’t be incurring.

Axing AgriInvest would generate howls of outrage, but it’s time for governments to take a hard look at all their spending and make the right decisions, even if they aren’t popular. And it’s time for lobby groups to push for what’s reasonable and needed rather than what they can leverage.