2016-2017 Annual Report - Ministry of Agriculture and Forestry

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 Preface | Minister’s Accountability Statement | Message from the Minister | Management's Responsibility for Reporting | Results Analysis - Ministry Overview
. Preface

The Public Accounts of Alberta are prepared in accordance with the Financial Administration Act and the Fiscal Planning and Transparency Act. The Public Accounts consist of the annual report of the Government of Alberta and the annual reports of each of the 21 ministries.

The annual report of the Government of Alberta contains ministers’ accountability statements, the consolidated financial statements of the province and Measuring Up report, which compares actual performance results to desired results set out in the government’s strategic plan.

This annual report of the Ministry of Agriculture and Forestry contains the minister’s accountability statement, the audited consolidated financial statements of the ministry and a comparison of actual performance results to desired results set out in the ministry business plan. This ministry annual report also includes:
  • the financial statements of entities making up the ministry including the Department of Agriculture and Forestry, regulated funds, and provincial agencies for which the minister is responsible;
  • other financial information as required by the Financial Administration Act and Fiscal Planning and Transparency Act, either as separate reports or as a part of the financial statements, to the extent that the ministry has anything to report; and
  • financial information relating to trust funds.
Minister's Accountability Statement

The ministry’s annual report for the year ended March 31, 2017, was prepared under my direction in accordance with the Fiscal Planning and Transparency Act and the government’s accounting policies. All of the government’s policy decisions as at June 2, 2017, with material economic or fiscal implications of which I am aware have been considered in the preparation of this report.

[Original signed by]

Honourable Oneil Carlier
Minister of Agriculture and Forestry

Message from the Minister

This was a challenging year for many Albertans.

The low snow pack, coupled with a prolonged stretch of warm and dry weather in the spring, created extremely hazardous conditions that ultimately resulted in a devastating wildfire that destroyed approximately 2,400 homes and forced the evacuation of Fort McMurray. I want to take this opportunity to once again thank the emergency responders, wildland firefighters and countless volunteers and support organizations who came to the aid of the residents of the Regional Municipality of Wood Buffalo during their time of need. They did an incredible job under extraordinary circumstances and clearly demonstrated the strength of character and resilience of the people of our province.

As part of our ongoing efforts to enhance the safety of Albertans and their communities, our government passed important amendments to strengthen the Forest and Prairie Protection Act and regulation. The measures included stronger penalties for violations like abandoning campfires or burning during fire bans, and the ability to restrict higher risk activities during hazardous fire conditions.
While the wet weather in June and July helped reduce the wildfire risk, the conditions did create challenges for the agriculture community. Rain and snow during harvest resulted in approximately 900,000 acres of crops remaining in the fields during the onset of winter. Staff at the Agriculture Financial Services Corporation (AFSC) have been working closely with producers to provide interim financial assistance and to expedite insurance claims for the unharvested acres. Our government, AFSC and the federal government also worked closely to put an AgriRecovery program in place to assist southern Alberta cattle producers facing unexpected additional costs associated with a bovine tuberculosis investigation by the Canadian Food Inspection Agency.
Despite these challenges, there were some positive developments for both the agriculture and forest industries as agriculture and food exports reached nearly $10 billion, food and beverage manufacturing sales were over $14.5 billion, and forest product exports exceeded $3 billion.

Over the past year, our ministry has continued to focus on core programs that support wildfire management, research and innovation, improved market access, diversification, environmental stewardship, value‑added industry development and food safety.

We continue to explore new opportunities and trade partners for Alberta’s agriculture and forestry products in the global market place. Trade agreements such as the Comprehensive Economic and Trade Agreement and international trade missions have demonstrated that there is a worldwide demand for the quality products and services that are grown, manufactured or developed in Alberta.

Another key priority for the ministry has been to work with our stakeholders to help address climate change and transition to a low‑carbon economy. There are many examples of how agriculture and forestry are showing leadership and helping address greenhouse gas emissions such as providing agricultural offsets, improving environmental stewardship practices, planting millions of trees each year, and exploring bioenergy production opportunities. In October, our government announced an additional $10 million investment in programs that assist producers with the cost of improving on‑farm energy management, purchasing solar equipment, improving irrigation efficiency and adopting new energy‑saving technology.

As we move forward, our government is committed to working with our stakeholders to ensure the agriculture and forest industries are well‑positioned for responsible and sustainable long‑term growth. This includes the negotiation of a new agricultural policy agreement with the federal government, other provinces and territories to replace Growing Forward 2, which expires in the spring of 2018.

We will also continue to advocate on behalf of our forest industry in pursuit of a new Softwood Lumber Agreement to ensure fair and predictable market access for our lumber exports. And, we will continue to work closely with the agriculture community as we develop regulations that support farm and ranch workplace legislation.

Our government recognizes the importance of agriculture and forestry to a strong and diversified provincial economy. I look forward to maintaining a strong partnership with our many stakeholders as we work to address challenges and explore new opportunities that will contribute to our long‑term success.

[Original signed by]

Honourable Oneil Carlier
Minister of Agriculture and Forestry

Management's Responsibility for Reporting

The Ministry of Agriculture and Forestry includes:
  • Department of Agriculture and Forestry
  • Agriculture Financial Services Corporation
  • Environmental Protection and Enhancement Fund
The executives of the individual entities within the ministry have the primary responsibility and accountability for the respective entities. Collectively, the executives ensure the ministry complies with all relevant legislation, regulations and policies.

Ministry business plans, annual reports, performance results, and the supporting management information are integral to the government’s fiscal and strategic plan, annual report, quarterly reports and other financial and performance reporting.

Responsibility for the integrity and objectivity of the consolidated financial statements and performance results for the ministry rests with the Minister of Agriculture and Forestry. Under the direction of the minister, I oversee the preparation of the ministry’s annual report, including consolidated financial statements and performance results. The consolidated financial statements and the performance results, of necessity, include amounts that are based on estimates and judgments. The consolidated financial statements are prepared in accordance with Canadian public sector accounting standards. The performance measures are prepared in accordance with the following criteria:
  • Reliability – information used in applying performance measure methodologies agrees with underlying source data for the current and prior years’ results.
  • Understandability – the performance measure methodologies and results are presented clearly.
  • Comparability – the methodologies for performance measure preparation are applied consistently for the current and prior years’ results.
  • Completeness – outcomes, performance measures and related targets match those included in the ministry’s Budget 2016.
As deputy minister, in addition to program responsibilities, I am responsible for the ministry’s financial administration and reporting functions. The ministry maintains systems of financial management and internal control which give consideration to costs, benefits, and risks that are designed to:
  • provide reasonable assurance that transactions are properly authorized, executed in accordance with prescribed legislation and regulations, and properly recorded so as to maintain accountability of public money;
  • provide information to manage and report on performance;
  • safeguard the assets and properties of the province under ministry administration;
  • provide Executive Council, the President of Treasury Board and Minister of Finance, and the Minister of Agriculture and Forestry information needed to fulfill their responsibilities; and
  • facilitate preparation of ministry business plans and annual reports required under the Fiscal Planning and Transparency Act.
In fulfilling my responsibilities for the ministry, I have relied, as necessary, on the executives of the individual entities within the ministry.

[Original signed by]

Beverly Yee
Deputy Minister of Agriculture and Forestry
June 2, 2017

Results Analysis - Ministry Overview

Our ministry provides the framework and services necessary for Alberta’s agriculture and forest industries to excel, inspire public confidence in the quality and safety of food and wildfire management, support environmentally sustainable production practices, and lead the collaboration that enables resilient rural communities.

The ministry is comprised of the Department of Agriculture and Forestry, the Agriculture Financial Services Corporation, the Environmental Protection and Enhancement Fund, as well as other entities including the Office of the Farmer's Advocate of Alberta, the Alberta Agricultural Products Marketing Council and the Irrigation Council.

Department of Agriculture and Forestry

Food Safety and Technology – The Food Safety and Technology division protects public health through food safety and animal health systems and regulatory activities. Safety standards, surveillance systems and emergency response plans minimize the impact of diseases and allow for rapid response to emerging issues. Programs include the inspection of Alberta-licensed abattoirs and surveillance of bovine spongiform encephalopathy (BSE). Within the division, the Office of the Chief Provincial Veterinarian advocates the use of current scientific principles in the development of animal health legislation and disease control programs. The division also provides the technology and information management necessary to support ministry operations, including print and electronic publishing services.

Industry and Rural Development – The Industry and Rural Development division supports the agriculture industry and rural businesses. The division helps these businesses develop and commercialize new products and scale up their operations through such services as business incubation and value-added processing offered at the Food Processing Development Centre. The division provides research expertise and knowledge through multi-disciplinary project teams focused on specific industry challenges and opportunities. Research activities provide information and technology that is targeted, innovative and industry-oriented to capitalize on market opportunities. The division also administers 4H and FarmSafe programs to build life skills and leadership throughout rural Alberta and cultivate a culture of safety.

Policy and Environment – The Policy and Environment division supports the growth of Alberta’s agriculture industry. The division identifies trade and market opportunities through market and trend analysis. It provides statistical information, data on costs and returns, and market analysis to support sound decision-making by both government and industry. By also supporting industry to adopt best practices in environmental stewardship, the division helps businesses position themselves to meet emerging expectations for sustainably produced products.

Forestry – The Forestry division manages and protects Alberta’s forest resources through effective and efficient wildfire management, sustainable forest management, and maintenance of the health of our forests. The division supports and applies science-supported research, focusing on topics like climate change, biodiversity, hydrology and longterm planning, to ensure that continued economic and environmental values of forest resources are realized. Management of forest pests like mountain pine beetle and other invasive species further protects these values. The division is active in promoting market access for forest products and ensuring Albertans capture social and economic benefits from a robust forest industry.

Other Entities

Agriculture Financial Services Corporation – The Agriculture Financial Services Corporation (AFSC) provides a wide variety of unique financial services, including lending capital and risk management products, to fit the business needs of producers, the agriculture industry, and small businesses in Alberta. Working closely with clients, many made in Alberta products have been developed to address existing gaps in the marketplace. The corporation has helped position Alberta as a leader in business risk management programs for crops and livestock and plays a pivotal role in the development and delivery of insurance, income stabilization, and disaster recovery programs. AFSC is responsible for implementing all portions of the multilateral Growing Forward 2 Framework agreement that govern the management of agriculture risk in Alberta, including AgriInsurance, AgriStability, AgriInvest, AgriRecovery and the Wildlife Damage Compensation Program.

Environmental Protection and Enhancement Fund – The Environmental Protection and Enhancement Fund, established under the Environmental Protection and Enhancement Act, is used for environmental protection, enhancement and emergencies.

Office of the Farmers’ Advocate of Alberta – The Office of the Farmers’ Advocate of Alberta operates within the Ministry of Agriculture and Forestry by working closely with rural Alberta and provides the minister with information on issues concerning rural Albertans. The office exists so rural Albertans can make informed decisions, operate in a balanced legal environment, access information regarding industry policies and procedures, and have an outlet to settle disagreements.

Alberta Agricultural Products Marketing Council – The Alberta Agricultural Products Marketing Council advises the minister on matters related to the establishment, operation and management of the marketing boards and commissions established under the Marketing of Agricultural Products Act. The council also provides strategic support to marketing boards and commissions on board governance, leadership development, and regulatory and policy matters.

Irrigation Council – The Irrigation Council supports the Government of Alberta and irrigation districts by providing recommendations and advice, regulatory administration, and strategic funding decisions that facilitate the responsible allocation, management and use of water delivered through irrigation infrastructure.

Dissolved Entities – The Alberta Grains Council and the Alberta Livestock and Meat Agency Ltd. were dissolved in 2016-17. Programs previously delivered by these entities are now delivered by the Department of Agriculture and Forestry.

Strategic Context

Alberta faced considerable challenges in 2016, including low oil prices and wildfires in the Wood Buffalo region. Despite these difficulties, the agriculture and forest industries continued to be a significant contributor to the provincial economy.

In 2016, the total food and beverage processing sales reached $14.6 billion, a nine per cent increase over 2015, and accounted for 23 per cent of Alberta’s total manufactured goods, making food and beverage processing the largest manufacturing industry in Alberta in 2016. Higher sales in several areas of manufacturing including dairy products, meat products and grain and oil seed milling supported this increase.

For the forest industry, the revenues generated from wood product manufacturing were $3.8 billion, an increase of more than eight per cent over the previous year. After experiencing marked declines in 2015, wood product exports increased substantially to Japan and China. These markets have high growth potential, and would be vital for the sector’s ongoing performance. The continued depreciation of the Canadian dollar contributed to increased export volumes to these countries.

More information and further statistics are available in Appendix A.

The combined efforts of hardworking Albertans and the ministry’s programs and services are essential to contributing to the success of the agriculture and forest industries. However, in supporting the growth and diversification of these industries and the communities that rely on them, the ministry continues to face several risks that it is actively addressing, including:
  • Market Access – While Canada continues to open new prospects through trade agreements and works to maintain and enhance market access, there remain obstacles to capitalizing on market opportunities, such as the anticipated renegotiation of the North American Free Trade Agreement, the ongoing softwood lumber trade negotiations and the uncertain future of the Trans-Pacific Partnership. These issues have the potential to negatively impact Alberta’s trade in terms of the composition of our export destinations.
  • Competitiveness – In a globalized world, Alberta finds itself in a fiercely competitive environment. Through innovative policies, technologies and infrastructure, other jurisdictions are creating business environments that allow companies to thrive economically and compete with Alberta-based companies. This increased competition could have implications in trade, employment and innovation.
  • Disease and Pest Outbreaks – Disease outbreaks (e.g. bovine tuberculosis) or pest outbreak (e.g. mountain pine beetle) pose significant threats to the industries and the safety of Albertans. The economic impact of an outbreak is potentially significant as the ministry would have to manage the impact of cross-border trade closures, including animal welfare issues, monetary losses and large scale depopulation.
  • Public Confidence – Managing public expectations of ministry programs, services and initiatives presents challenges to inclusive stakeholder engagement and the overall public perception of the organization. Obtaining public support and input for key strategies is crucial to achieving the ministry’s business plan outcomes and forms the foundation of program development and implementation.
  • Climate Change – Extreme weather events create challenging decision-making situations for both the agriculture and forest industries. For example, extremely dry or drought conditions can begin slowly and subtly, and can have a significant impact as other more dramatic disasters. Such conditions can lead to water security issues that affect crop, forage, hay productivity and livestock water needs, as well as contribute to wildfire events that threaten Albertans, communities, forests, infrastructure and other values.
This annual report provides integrated results analysis for some of the most significant actions we took to achieving ministry outcomes and address ongoing challenges. Our consolidated accomplishments are presented from management’s perspective according to our outcomes, key strategies and performance measures, as listed in the 2016-19 ministry business plan. Discussion of ministry performance measures focuses on significant variances from targets and the previous year’s results.
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This information published to the web on June 29, 2017.