EN FR

AIDA and High Taxes Add to Farmer's Woes

Author: Richard Truscott 1999/07/21
While governments hold out a hand to hard-pressed farmers with the flawed Agriculture Income Disaster Assistance program (AIDA), their other hand continues to pick the farmers' pockets with increased property taxes and other levies.

As the income crisis has grown, so has the property tax bill for farmers, increasing by 52% since 1986, and growing by $20 million between 1994 and 1998. In fact, while the cost of other farm inputs (aside from machinery) has been dropping, property taxes have been steadily growing. Overall farm input prices increased 3.5% in 1996, and then fell by 0.1% in 1997, 0.5% in 1998, and 1.3% in 1999. Meanwhile, property taxes rose 7.3% in 1996, 4.3% in 1997, and 4% in 1998, only levelling off in 1999.

Ironically, property taxes are not considered an "input cost" by the AIDA program.

How bad is it for Saskatchewan farmers This province has 44% of all Canadian farmland in production, but only 2% of Canada's total realized net farm income in 1999.

As for AIDA, it has had little impact on the farm income crisis, but has certainly grown a bumper crop of bureaucracy. So far, Saskatchewan farmers have received only $11.6 million of the $175 million supposedly available to them through AIDA, not much more than the $6.9 million that has already been spent on administrating the program.

You may have heard of the fellow who received a cheque for $8 from AIDA after spending $100 for his accountant to fill out the application forms. The rest of his relief ($2) is in the mail. I'm sure that last "toonie" will go a long way to rescuing his livelihood.

So what's the problem with AIDA Like most bureaucracies, it seems more part of the problem than part of the solution.

Under its guidelines, only a fraction of farmers are eligible for significant relief. You can only get AIDA if your income is less than 70% of the average for the last three years. In other words, the more prolonged your "income disaster" has been, the less likely you are to qualify for assistance. So if you have had three good years and one bad year, you're all set. But if you have had a string of bad years, you're out of luck.

Farmers are also upset about the super-complicated 19-page AIDA forms, which fail to account for such farm realities as rent on land, buildings, machinery, livestock, taxes, and interests on loans. As MLA Bob Bjornerud said, "Who comes up with this stuff Do they know anything about farming "

Instead of actually helping farmers, the government is forcing them to navigate a costly maze in the vain hope of finding a bit of cheese at the other end. If our governments really want to help, they could start by cutting taxes, and leaving more money in farmers' pockets in the first place.

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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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