AGRICULTURE’S CRY FOR HELP

Consistently low levels of optimism in Canada’s agriculture sector are holding the sector back from prospering

The Canadian Federation of Independent Business (CFIB) works with our members in measuring optimism levels among small businesses regularly throughout the year, tracking how confident owners are feeling about the future of their small business. The levels are reported in the format of long-term (12-months) and short-term (3-months) indexes and are broken up into provinces and sectors.

Perhaps unsurprising to many in the sector, our data shows that there is deep-seeded concern among Canadian agri-businesses. Every month for the past year, optimism levels among agri-business owners have remained low, with agriculture’s sectoral levels of optimism sitting either at the bottom or second from bottom every month compared to other sectors.

The month of April showed us, yet again, agri-business owners’ confidence levels were the lowest among all the industries. For the 3-month index, agriculture reported one of the largest increases we have seen in a long time at 3.3 per cent in the confidence level but still observed a figure of 52.5 per cent.

The 12-month index showed that agriculture saw a slight increase of 1.4 per cent from March levels, but still sat at 46 per cent. CFIB tends to sound the alarm at any long-term optimism level below 50 per cent as it means the majority of the entire sector is not feeling confident about the future of their agri-business.

The alarms are sounding off.

Of course, this comes without saying, the numbers fluctuate heavily due to seasonality and the response rate for those in agriculture. However, almost a full year of the sector having the lowest optimism levels tells us that something is wrong.

In addition to optimism levels, CFIB also tracks what sort of trends could be affecting the small business outlook. The most important factors to agri-businesses are the limitations of sales and production growth, and major input cost constraints.

So, what could be causing such long periods of low optimism in the sector?

In terms of limitations of sales or production growth, the top issues that small agri-businesses are seeing are shortage of skilled labour (33%), shortage of unskilled, semi-skilled labour (31%), and shortage of working capital (27%) which is tied with insufficient domestic demand (27%).

Similarly, with the April 1st 15-cent rise in the federal carbon tax, CFIB released a snapshot entitled Fueling Unfairness: Carbon Pricing and Small Businesses. This snapshot highlights the unfairness in the carbon tax program; how the federal government has returned less than 1% of the promised carbon tax revenues collected by small businesses ($2.1 billion), back to small businesses. This is important as input costs continue to trend at all-time highs for agri-businesses across the country.

Meanwhile, the top major input cost constraints are product input costs (76%), fuel, energy costs (75%), and borrowing costs (49%) which is tied with wage costs (49%).

The agriculture sector is known for its strength and resilience. CFIB sees the dedication that our food producers put into their work, and we want to help make their lives easier and more affordable. This is why we have been working tirelessly to push Bill C-234: An Act to amend the Greenhouse Gas Pollution Pricing Act forward. Fortunately, this act is seeing traction as it passed through the House of Commons (HoC) and is now sitting in its second reading for Senate.

The time is long past due for policymakers to listen to farmers and stakeholders in the sector so they may make policy decisions that actually benefit the sector for the short and long term.

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These issues are not new to the agriculture sector, and they have been constantly present as a source of concern for most agri-businesses. This is why CFIB is vocal in getting our small business members’ voices heard across all levels of government.

Last year, to address our agri-business members’ concerns on labour shortages, we released a report and federal submission, Help Wanted: Labour Shortages Threaten the Future of Canadian Agriculture, which included identifying some of the causes that were contributing to the lack of willing people to work in agriculture, as well as a list of recommendations for policymakers.

SeoRhin Yoo is a Policy Analyst for the Canadian Federation of Independent Business (CFIB). CFIB is Canada’s largest association of small and mediumsized businesses with 97,000 members (4,500 agribusiness members) across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca. Businesses, available on the CFIB website in both English and French.