Under the Agridome

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Do we love the "One Big Beautiful Bill" our American friends gave themselves recently? That kind of rhetoric doesn't exactly crop up in Canada. In fact, it's almost unimaginable. But here we are, Washington's just passed a sweeping piece of legislation that adds $68.3 billion over 10 years to the United States' farm safety net, along with a buffet of tax perks, base acre expansions and boosted crop insurance supports. It's enough to make a Canadian grain farmer blink twice, maybe sigh and consider retirement.

In Canada, I've been a critic of our Canadian farm safety nets during the last 40 years. Compare that to this latest U.S. move and it becomes clear: While the Americans have supercharged their ag sector with a long list of goodies, our programs remain so emasculated.

Take crop insurance. The U.S. just put another $6.3 billion into their programs over a decade, including enhanced premium support for supplemental plans and even special provisions for poultry producers. Canada's crop insurance (the federal-provincial version) is more stable, but rarely headline-grabbing. Ontario corn and soybean farmers rely heavily on Production Insurance, which is decent in coverage, but it's never been described as "beautiful." Unfortunately, it doesn't have a federal component. All governments since Jean Chretien (prime minister of Canada from 1993-2003) have denied that.

Then there's AgriStability -- the often-maligned pillar of Canada's Business Risk Management (BRM) suite. It's supposed to help with deep margin declines, but years of cuts and clawbacks mean few producers bother anymore. Ottawa and the provinces lifted the compensation rate and removed the reference margin limit, but many would argue it still doesn't match the precision or payment guarantees baked into the U.S. ARC and PLC (Agriculture Risk Coverage and Price Loss Coverage) programs, which now get higher reference prices and expanded base acres. That's real money tied to real risk -- and it's structured in a way U.S. producers understand.

On the tax front, the differences become even more stark. The American bill makes permanent the 20% deduction for business income, boosts Section 179 expensing to $2.5 million, and includes special depreciation allowances for everything from tractors to ag processing plants. They've even retooled capital gains rules to ease farmland transitions and expanded estate tax exemptions to $30 million for farm couples. Try bringing that up at a Canadian Farm Succession workshop; it would be like science fiction.

Canada's tax tools -- like the capital gains exemption on qualified farm property or deferrals on grain tickets -- are helpful, but nowhere near as robust or forward-looking. There's certainly no permanent 100% bonus depreciation on bins and sprayers, and the intergenerational transfer rules, though recently updated, still don't rival the flexibility now available south of the border.

Perhaps most revealing is how much of the U.S. bill hinges on ideology. There's plenty of red meat here for rural America: higher indemnities for livestock losses, new base acres, and enhanced trade promotion dollars. But it also comes with deep cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP) -- food stamps -- stirring partisan firestorms. House Republicans celebrated it as a win for rural prosperity; House Democrats denounced it as a gift to billionaires. In contrast, Canadian ag spending -- other than supply management -- tends to be consensus-driven and rooted in compromise. Nobody in Canada is cutting health care to pay for farm programs.

That's not to say Canada doesn't spend on agriculture. The current five-year Sustainable Canadian Agricultural Partnership (SCAP) commits $3.5 billion in cost-shared programming and another $1 billion in federal-only funds. It sounds big -- until you realize that's less than the U.S. will now spend on crop insurance enhancements alone.

SCAP's focus is more on environmental goals, innovation and competitiveness than hard risk-management payouts. That might serve a broader policy agenda, but it doesn't directly pad the farm safety net.

The contrast between the two approaches says a lot. American farmers get programs that act like revenue insurance, driven by politics, commodity lobbying and electoral math. Canadian farmers are encouraged to innovate, adapt and squeeze value from increasingly narrow margins for business risk management (BRM) programs. It's the difference between being turbocharged and told to hang tight.

So where does this leave us? Watching, mostly. The One Big Beautiful Bill is a reminder that governments can make bold choices for farmers when they want to -- especially if the political calculus works out. In Canada, our version of bold is a well-worded press release and a promise to consult stakeholders next year.

That's fine, if you're used to it. But don't think Canadian farmers aren't watching the Americans cash bigger cheques and write off their grain bins while doing it.

When you throw another $3.4 trillion over 10 years onto the debt pile in peacetime and call it beautiful, you're playing a dangerous game. On a per capita basis, the U.S. is increasing debt at a rate roughly four to five times higher than Canada. This isn't stimulus -- it's structural, and it's built on the hope that interest rates fall, and the economy stays rosy. If either falters, well, markets have a funny way of noticing.

As always, the challenge for farmers in Canada is to navigate our own reality -- one shaped by cautious policy and less funding which I've never been happy with. Daily market intelligence remains crucial, especially when the policy gap between Canada and the U.S. widens. Still, despite our grain fundamentals, there will be many grain marketing opportunities ahead. But our Canadian safety net? Don't expect it to be beautiful, because it's the antithesis of that.

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Philip Shaw can be reached at philip@philipshaw.ca

Follow him on social platform X @Agridome

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