$1.75B in mystery money might allow Ottawa to start compensating farmers

OTTAWA — The federal government plans to spend $1.75 billion by March without having said what the money is for, though at least some of the cash is likely to go to farmers hurt by new trade deals.

The government remains tightlipped about how it will use the rest of the “non-announced” spending it allowed for in last week’s fall economic statement.

In all, the government has made room for $9.5 billion worth of still-to-be-unveiled commitments over the next six years.

A government source said some of that will go to dairy, egg and poultry producers, whose protected domestic markets were opened up to more foreign competition under new North American and Pacific Rim trade deals. The source, who was not authorized to discuss the matter publicly, spoke on condition of anonymity.

The fall statement said the government is still talking with farmers and processors about compensation for the new United States-Mexico-Canada Agreement and the recently ratified AsiaPacific trade pact known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The negotiations will determine the size of the final package and how the money will be rolled out over coming years.

In 2016, the Liberal government dedicated $350 million to help dairy producers deal with the impacts of Canada’s trade agreement with the European Union. The amount included a five-year, $250-million fund for milk producers and a second program worth $100 million for cheese-makers.

Looking ahead, Ottawa is also facing litigation related to Indigenous issues, including land claims, that could draw on some of the money. Most of the yet-to-be announced funding has been dedicated to the later years of the projection, with $2.1 billion set aside for 2021-22, $1.85 billion for 2022-23 and nearly $2.8 billion for 2023-24.

One possible use for the cash: national pharmacare. The Liberals have put together a group of advisers to consult Canadians and to explore options for a national program. The council is due to report in 2019, when the topic of pharmacare is likely to become an issue during the election campaign.

A spokesman for Finance Minister Bill Morneau argued the list of the government’s funding commitments in the fall update is comprehensive. But Pierre-Olivier Herbert noted some measures cannot be disclosed yet due to cabinet confidentiality or because ministers have yet to make a decision. Issues of national security, commercial sensitivity, or litigation or certain matters related to trade agreements must also be kept under wraps, he said.

“The net fiscal impact of these confidential or sensitive measures is rolled up and presented at an aggregate level and will be detailed in due time,” he said.

Thanks to a stronger economy, Morneau had more than $20 billion in extra fiscal room over the coming years, compared to the forecasts in last February’s budget. But he chose to announce new initiatives — including billions worth of tax incentives for corporate Canada — that will use up all that space and then some, contributing to larger annual deficits beginning next year.