Subsidies

Generally, the international community lumps subsidies into the following categories (adapted from OECD. 2004):

Producer subsidies Consumer subsidies General services subsidies
Market price support

Based on transfers to farmers to accommodate differences between domestic farm gate prices and border prices

Consumption subsidies in cash or in-kind Research and development
Payments based on output

Payments per tonne, per hectare or per animal

Payments to processors by taxpayers Agricultural training
Payments based on area planted/animal numbers

Payments per planted hectare or livestock held

Payments to vendors by taxpayers Food safety and quality
Payments based on historical entitlements

Payments for which farmers do not have to produce specific goods or incur costs, e.g., emergency payments or historical production patterns

Building distribution infrastructure and commodity chains
Payments based on input use

Based on use of specific inputs or factors of production

Marketing and promotion
Payments based on input restraints

Based on constraining input use

Public storage of agricultural commodities
Payments based on overall farming income

Based on farm income or revenue and not on production of specific commodities

 

Canada, however, employs only a limited number of subsidies in some categories.  General service subsidies are commonly employed, particularly for research, development, training, marketing and promotion, food safety and quality, and infrastructure.  Consumer subsidies are rarely employed, except that regional economic development subsidies have been received in the past by food processors and the Nutrition North program subsidizes food distribution to Northern and remote communities (see below).  Producer subsidies have been most commonly employed but these have been reduced over time to comply with Canada's perceptions of its trade deal obligations (see Goal 10 and Instruments, International Agreements).

Other jurisdictions have been more creative and adventurous with their use of subsidies.  Many of these are discussed under Goals.

 

Federal

Provincial / territorial

Municipal

Assessing subsidy effectiveness

 

Federal

(adapted from Committee on Agriculture, WTO. Notification: Canada (for 2013). G/AG/N/CAN/113/Rev.1 and Export Subsidies (2015/16, G/AG/N/CAN/118)

Because most of Canada's agricultural subsidies are provided through the Agricultural Policy Framework (APF, GF1, GF2, Canadian Agricultural Partnership), many are cost - shared and WTO reporting does not always break out the federal vs. provincial contributions.  When they are cost shared between the two levels, the typical funding arrangement is 60% federal, 40% provincial.

General service subsidies with significant federal contributions amount to about $838 million.

Income  insurance and income safety net, $445 million

Environmental programs $43 million

Market price supports (butter and skim milk powder), $485 million

Other product specific supports (AMS, a range of products), $263 million

Export subsidies (dairy products): $20 million

The Nutrition North program is funded by Indigenous and Northern Affairs Canada (INAC),  which administers the food retail subsidy and Health Canada and the Public Health Agency of Canada which support nutrition education. "The subsidy applies to perishable, nutritious foods (fresh, frozen, refrigerated, or foods that have a limited shelf life) that are shipped by air. Country / traditional food is also subsidized when processed in government regulated and/or approved - for-export commercial plants. The subsidy must be passed on to the consumer through the retailer reducing the price of subsidized foods in stores ..... Registered retailers in the North, country food processors/distributors located in eligible communities, and food suppliers in the South who supply small retailers, institutions and individuals in these eligible isolated communities, can apply for a subsidy based on the weight of eligible foods shipped by air to eligible northern communities. These subsidies are to be passed on to northern consumers by appropriate reductions in the selling prices of eligible foods" (Vanderlee et al.  2017).

The subsides go to perishable and nutritionally dense foods (fruit, vegetables, milk, eggs, meat and cheese) that are typically shipped by air. A higher subsidy rate is applied
to the most nutritious perishable food.  There are also subsides for air freighted country foods, arctic char, muskox and caribou.  The annual subsidy amounts to about $57 million (Nutrition North Canada).