Alberta
B.C. ranchers struggle as drought sends hay prices soaring
British Columbia rancher Suzanne Fradette had just got off the phone with a hay broker who had grim news amid an ongoing drought that has sent feed prices soaring: “It’s bad out there.”
“We’ve got a fairly small herd, like 140 head, but we are thinking it’s going to be about $100,000 this year for hay,” said Fradette.
That’s a 30-per-cent jump compared to recent years, and a painful price for a relatively small ranch.
Fradette runs the Back Valley Ranch ranch with partner Jerry Steves in the Deadmans’ area between Savona and Cache Creek, about 350 kilometres northeast of Vancouver.
Fradette said they are just “keeping their heads above water,” getting by one day at a time. Feeding their herd costs about $700 per day.
Fradette and Steves aren’t alone in their plight, with drought conditions pushing up feed prices across much of the country.
Agriculture Canada’s most recent drought monitor report says 76 per cent of the country’s agricultural landscape is either abnormally dry or experiencing moderate to severe drought this summer.
The B.C. Ministry of Emergency Management and Climate Readiness says most of the province remains at either Level 4 or 5 drought conditions, urging people and businesses to continue to conserve water, even as the first rain in more than a month falls this week on Metro Vancouver.
Low precipitation and historically early snowmelt have already pushed eight of B.C.’s 34 water basins into the worst Level 5 drought category, when all efforts should be made to conserve water and protect critical environmental flows. A further 13 are at level 4, meaning harm to ecosystems and communities is likely.
Fradette said that in previous years, her phone would be ringing briskly with offers of hay to feed her livestock, but things have changed this year.
“This time, I’m trying to phone around about it. There is no hay,” said Fradette.
Fradette said ranchers and farmers are struggling to get by.
“I always make the joke, I’m like, ‘I don’t want to be rich, rich. I just want to be change-my-oil-when-I-need-to rich.’ That’s our goal right there,” said Fradette.
Andy Wolfe operates Mount Lehman Farm, a family-owned beef ranch with 140 head of cattle in Abbotsford, B.C.
He said that thanks to “his farmer intuition,” he planned ahead this year to find three different suppliers to secure enough hay to cover him until next year.
“I basically took all the supply I could get from about three different local suppliers where normally I would be dealing with just one.”
Wolfe said loss of farmland to industrial usage led to shrinking production of hay, a problem compounded by the drought.
He said hay prices were skyrocketing. Large bales that cost $65 last year are now $130, said Wolfe, and even that price required negotiation with suppliers.
“Most people are paying way more,” said Wolfe, adding that some ranchers had to downsize their herd because of the hay shortage.
Although Wolfe said he has enough hay to make it through the year, he’s already worrying about next year.
“My concern is if this year’s drought is going to affect next year’s prices,” said Wolfe.
“I made it through this year and I am going to be OK this winter, but if the drought continues, I don’t know what I’m going to have to pay for hay. Next year is my biggest concern.”
This report by The Canadian Press was first published July 25, 2023.
Nono Shen, The Canadian Press
From the Fraser Institute
By Tegan Hill
According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.
The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.
For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).
And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.
In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.
This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.
Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.
Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.
Of course, if the government falls back into deficit there are implications for everyday Albertans.
When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.
According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.
Author:
Better, faster, more affordable auto insurance
Alberta’s government is introducing a new auto insurance system that will provide better and faster services to Albertans while reducing auto insurance premiums.
After hearing from more than 16,000 Albertans through an online survey about their priorities for auto insurance policies, Alberta’s government is introducing a new privately delivered, care-focused auto insurance system.
Right now, insurance in the province is not affordable or care focused. Despite high premiums, Albertans injured in collisions do not get the timely medical care and income support they need in a system that is complex to navigate. When fully implemented, Alberta’s new auto insurance system will deliver better and faster care for those involved in collisions, and Albertans will see cost savings up to $400 per year.
“Albertans have been clear they need an auto insurance system that provides better, faster care and is more affordable. When it’s implemented, our new privately delivered, care-centred insurance system will put the focus on Albertans’ recovery, providing more effective support and will deliver lower rates.”
“High auto insurance rates put strain on Albertans. By shifting to a system that offers improved benefits and support, we are providing better and faster care to Albertans, with lower costs.”
Albertans who suffer injuries due to a collision currently wait months for a simple claim to be resolved and can wait years for claims related to more serious and life-changing injuries to addressed. Additionally, the medical and financial benefits they receive often expire before they’re fully recovered.
Under the new system, Albertans who suffer catastrophic injuries will receive treatment and care for the rest of their lives. Those who sustain serious injuries will receive treatment until they are fully recovered. These changes mirror and build upon the Saskatchewan insurance model, where at-fault drivers can be sued for pain and suffering damages if they are convicted of a criminal offence, such as impaired driving or dangerous driving, or conviction of certain offenses under the Traffic Safety Act.
Work on this new auto insurance system will require legislation in the spring of 2025. In order to reconfigure auto insurance policies for 3.4 million Albertans, auto insurance companies need time to create and implement the new system. Alberta’s government expects the new system to be fully implemented by January 2027.
In the interim, starting in January 2025, the good driver rate cap will be adjusted to a 7.5% increase due to high legal costs, increasing vehicle damage repair costs and natural disaster costs. This protects good drivers from significant rate increases while ensuring that auto insurance providers remain financially viable in Alberta.
Albertans have been clear that they still want premiums to be based on risk. Bad drivers will continue to pay higher premiums than good drivers.
By providing significantly enhanced medical, rehabilitation and income support benefits, this system supports Albertans injured in collisions while reducing the impact of litigation costs on the amount that Albertans pay for their insurance.
“Keeping more money in Albertans’ pockets is one of the best ways to address the rising cost of living. This shift to a care-first automobile insurance system will do just that by helping lower premiums for people across the province.”
Quick facts
- Alberta’s government commissioned two auto insurance reports, which showed that legal fees and litigation costs tied to the province’s current system significantly increase premiums.
- A 2023 report by MNP shows
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