Question Period Note: EXTREME WEATHER

Q1 What is the government doing to prepare the sector for increased extreme weather in the future? Q2 – How is the government addressing climate change through business risk management?

R.1 - The government is engaged in a broad set of actions to support the sector in managing future conditions, including potentially increased instances and severity of extreme weather events.
For example, the Sustainable Canadian Agricultural Partnership (Sustainable CAP) is a $3.5 billion investment over five years by federal, provincial and territorial governments focused on key priorities including science and innovation, resiliency, and environment and climate change. The Sustainable CAP is one important way that the government is helping position the sector to better face future challenges.
In addition, we are reviewing the BRM suite to assess its interactions with climate risks and how the sector is addressing them, in consultation with provinces and territories.
As part of the Strategic Plan for Science, increasing the resiliency of agroecosystems is one of four missions for the department. This mission enables outcomes like enhancing the resilience of the sector to a changing climate.
Other initiatives include the renewal of the Emergency Management Framework for Agriculture, a national integrated and collaborative emergency management agreement, with provincial/territorial colleagues. R.2 - Integrating climate risk management and climate readiness into business risk management programs is a top priority. We are conducting a BRM climate review that is looking at how climate change could impact future BRM payments as well as how BRM programs could encourage climate action.
Starting in 2025, the largest producers will need to have an agri-environmental risk assessment to receive the government contribution in AgriInvest. We are also working with provinces to pilot AgriInsurance premium rebates for producers who adopt practices that have environmental benefits and reduce production risks.

Recent Extreme Weather Events

The 2023 production season was highly impacted by extreme weather events that included drought, wildfires and grasshopper destruction in Western Canada and excess rainfall in Quebec and New Brunswick. Support under the AgriRecovery Framework was provided to impacted producers to manage the extraordinary costs incurred from these extreme weather events. Funding of Quebec and New Brunswick producers were attributed up to $47.22 million in funding ($28.33 million federal and $18.89 million provincial) to assist them with their extraordinary costs.

Emerging Risks and Challenges

The risk landscape for agriculture and agri-food is constantly evolving, and the factors that can lead to emergencies are increasingly complex and diverse.

Climate change is expected to have a significant impact on primary agriculture production in Canada moving forward. AAFC’s recent producer survey found that nearly 1 in 5 producers see climate change impacts, including natural disasters and extreme weather fluctuation, as the most important issue facing Canadian producers over the next five years.

Recent forecasts report that losses due to weather events alone (floods, droughts, and storms) will increase to $139 billion in the next 30 years, with agriculture among the most affected sectors. Between 2001 and 2010, insured losses from natural disasters in Canada averaged $675 million annually. From 2011 to 2020, this figure rose to $2.3 billion and surged to $3.1 billion by 2023 (Insurance Bureau of Canada).

Extreme weather events could have significant impacts that extend beyond economic concerns, including loss of public trust, and impacts to environmental and human health. This requires a shift from reactive programs to a comprehensive approach that manages risks proactively and maximizes the use of collective capacities.

Investment in prevention and preparedness is far less costly than the consequences of inaction. Recent data from the National Adaption Strategy notes that every dollar spent on adaptation measures saves up to $15, including both direct and indirect economy-wide benefits. Every dollar invested in adaptation generates significant benefits.

Livestock Tax Deferral

The Livestock Tax Deferral provision allows livestock producers who are forced to sell all or part of their breeding herd due to drought or excess moisture to defer a portion of their income from sales until the following tax year. The income may be at least partially offset by the cost of reacquiring breeding animals, thus reducing the tax burden associated with the original sale. In 2024, the Government of Canada streamlined the process to identify regions earlier in the growing season and instituted a buffer zone to adjacent regions to capture impacted producers on the edges of affected regions. An early list of regions eligible for the Livestock Tax Deferral in 2024 was announced on June 14, 2024. No regions have been recommended for early designation in 2025.

AgriRecovery

AgriRecovery is a framework for federal-provincial-territorial governments to work together when a natural disaster occurs to assess the impacts and determine whether there is a need for further assistance over and above the existing BRM programs. When the need is demonstrated, an initiative is put in place to provide targeted assistance to help with the extraordinary costs producers incur to recover.

AgriInsurance

The AgriInsurance program helps to stabilize producer income by minimizing the economic effects of production losses caused by severe but uncontrollable natural hazards. It provides support largely to crop producers, averaging over $1 billion per year since 2013, which represents approximately two-thirds of all BRM contributions.

Sustainable Canadian Agricultural Partnership

AAFC and its provincial and territorial counterparts are implementing programming under the Sustainable Canadian Agricultural Partnership (Sustainable CAP), a five-year, $3.5 billion federal, provincial and territorial (FPT) policy framework, that is the successor to the Canadian Agricultural Partnership.

The Sustainable CAP focuses on supporting environmental, economic, and social objectives across all five priority areas, including science, research and innovation, market development and trade, building sector capacity, and resiliency and public trust. The Sustainable CAP also emphasizes the importance of climate change action and the protection of the environment, which are critical to the continued prosperity of the sector as well as supporting economic growth and competitiveness.

AAFC’s Strategic Plan for Science

Higher-risk transformative science under AAFC’s Strategic Plan for Science will help ensure a sustainable, resilient, and profitable agriculture and agri-food sector by 2050. Mission-driven science will bring together multiple disciplines, including economics, social science, and natural science, from across the Department and other science organizations working towards a similar goal, including increasing the resiliency of agroecosystems.
The Missions are as follows:
• Mitigating and adapting to climate change
• Increasing the resiliency of agroecosystems
• Advancing the circular economy by developing value-added opportunities
• Accelerating the digital transformation of agriculture and agri-food

• Across Canada, the agriculture sector continues to face significant impacts from extreme weather events, including droughts, wildfires, excess rainfall and hurricanes.

• Our government is ready to support the sector in managing the impacts of weather events through a full range of programs and initiatives. This includes the suite of business risk management programs, as well as other tools.

• In addition, the Government is working with provincial and territorial counterparts, and industry, to support adaptation to extreme weather, climate change mitigation, and overall greater resilience.

• Initiatives such as the Sustainable Canadian Agricultural Partnership and ongoing research and development guided by Agriculture and Agri-Food Canada’s Strategic Plan for Science are contributing to these efforts.