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Alberta

Canadian dairy plant becomes unlikely symbol of defiance for Ukrainian farmers

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KRASNE, Ukraine — The cows on Lyuba Pastushok’s farm are like her “cheeky children,” she explained in Ukrainian as she walked among her growing herd, gently cooing to them and softly petting their heads.

A few years ago there were only five cows on her small family operation in Holoskovychi, a rural community an hour and a half east of the nearest city of Lviv, in western Ukraine.

Now she tends to 25 cows, six of which she bought after Russian forces invaded the country. 

Wrapped up against the cold with a kerchief tied over her head, the Ukrainian matriarch pointed out each by name, her voice full of motherly pride.

She credits her success to the creation of a Quebec-style co-op in her community, and said a new Canadian dairy plant in the area is likely to help the local industry grow even more.

The project has become an unlikely symbol of defiance in the face of the Russian invasion.

Russia is stepping on Ukrainian farmers, Pastushok said through a translator during an interview in her farmhouse kitchen, “but we are developing in spite of them. We are who we are — Ukrainians.”

The $3-million dairy plant, funded by Global Affairs Canada, will produce milk, yogurt, sour cream and hard and soft cheeses using milk from the local dairy co-ops. Those co-ops will also have a stake in the management of the plant, which will employ 30 to 40 people. 

Construction was already well underway when war broke out last year and disrupted every aspect of life in the now embattled country. 

Investors at first shied away from putting their money into a project in conflict zone, said Camil Côté, the project officer for SOCODEVI, the Montreal-based development agency spearheading the project.

The invasion put a stop to the work for about three months, until Canada offered another $2 million to get it started again. 

“Just like the whole of Ukraine, we survived the winter,” Côté said in an interview from Nicaragua. 

“We have (had a) few dangerous situations near the plant,” said Andriy Blinovskyy, who manages the project on behalf of a corporation of local dairy co-ops called Nabil. 

“We have missile explosion near the plant, when the electricity transformer station was destroyed maybe 10 kilometres from the plant.”

That explosion late last year forced workers to continue building through the winter without heat, using a generator for power.

When it’s up and running, the plant will mainly supply the Lviv region with locally produced products. The equipment and the brand new, gleaming milk tanks in each room carry Canadian flags.

“The factory is perceived as our own. Our country, our home, our family,” Pastushok said.

SOCODEVI first brought the Quebec-style co-op to Ukraine nearly a decade ago. It allows local producers with just a few cows to band together to negotiate for better prices.

“The needs in Ukraine are very similar to to what they were in Canada 50 or 60 years ago,” said Erin Mackie, a program manager for SOCODEVI.

“They were created because farmers needed to have that collective response in order to get the value added and to be able to generate a better income for themselves,” she said. 

Ukrainian farmers were initially hesitant to sign on, since the co-operative model conjured memories of state-run operations under the Soviet Union. Mackie said the development agency worked to convince them that the plans was, in fact, democratic and capitalist.

The model is based largely on Quebec’s Agropur, the largest dairy co-op in Canada. 

“This is how Agropur started, with a small co-op where you process milk,” said Céline Delhaes, who sits on the co-op’s board of directors, in an interview from her farm outside of Montreal. 

She said it’s much easier for farmers to negotiate fair prices as a group than to negotiate one-to-one with large companies to process and sell their milk. She also said the profits will stay in local communities. 

Delhaes travelled to Ukraine several times before the COVID-19 pandemic to coach local farmers and help them with the administrative aspect of setting up their co-ops.

The Ukrainian programs were growing steadily, as more and more farmers like Pastushok signed on, before the war began.   

“People started selling cows. Some due to their illness, while young people went to work abroad. And it turned out that it became very expensive to cultivate the land,” Pastushok said. 

She hopes more farmers in the region will join. 

“We need to unite. Like this proverb, ‘One man in the field is not a warrior,'” she said. 

Mackie said the aim is to create a national movement in Ukraine, in line with Canada’s dairy industry, and Canada’s decision to continue with the plant’s construction is a show of faith in the country’s future. 

“It’s faith in the Ukrainian people, that they would overcome this,” she said. 

The milk plant is by far the most modern-looking building in the area, its white siding and black roof standing out in stark contrast to its wood and stone neighbours. 

Blinovskyy said he hopes it will be ready to accept milk from local cows this spring. 

“It’s very powerful sign for all — for our enemies, for our friends, that Canada supports Ukraine and that the plant will start producing,” he said.  

This report by The Canadian Press was first published March 15, 2023. 

Laura Osman, The Canadian Press

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Alberta

Alberta’s fiscal update projects budget surplus, but fiscal fortunes could quickly turn

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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.

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Alberta

Premier Smith says Auto Insurance reforms may still result in a publicly owned system

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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.”

Danielle Smith, Premier

“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.”

Nate Horner, President of Treasury Board and Minister of Finance

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.”

Nathan Neudorf, Minister of Affordability and Utilities

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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