Agricultural Support Policy in Canada: What Are the Environmental Consequences?

This paper reviews annual government spending on Canadian agriculture that attempts to stabilize and enhance farm incomes. Since 2010, two-thirds of the $3 billion spent on agriculture went into stabilization programs to support farm incomes. This level of support raises questions about the environmental consequences of enhanced agricultural production. Canadian government expenditures on environmental initiatives in agriculture, as a share of farm income, are more than 10 times smaller than those in the United States and the European Union. Canadian stabilization programs have modest impacts on production, but chemical and fertilizer input use may be higher than in the programs' absence. One possible course of action is to introduce cross-compliance between program payments and environmental objectives. However, there are no requirements that Canadian producers receiving support comply with environmental standards. Although cross-compliance could be considered in the Canadian context, policies that directly target specific environmental issues in agriculture may have greater impact.