Alberta axes new agriculture research endowment fund

Plummeting oil prices have killed an Alberta endowment for agricultural research less than a year after it was announced with great fanfare. The beleaguered provincial government has eliminated the Alberta Future Fund. It included the $200-million Agriculture Food and Innovation Endowment (AFIE) which would have generated at least $9 million annually to support enhanced funding for basic and applied agricultural and value-added product development and commercialization.

The AFIE was one of two endowments established with the introduction of Bill 1 in March/14, the other being a $1-billion Social Innovation Endowment in support of Alberta's cultural industries. It was intended to be capitalized with $500 million in FY15-16, generating $22.5 million and an additional $500 million in FY16-17, yielding $45 million. It is also terminated.

Funding was secured by reallocating assets of the Alberta Heritage Scholarship Fund and the creation of the Alberta Future Fund.

The commitment to establish the two endowment funds responded to long-standing calls to diversify the Alberta economy and was made when a barrel of oil sold for $90. With the collapse of oil to less than $50/barrel, Alberta's projected surplus transformed into a significant deficit prompting a series of measures to curb spending.

"Our government is committed to being fiscally prudent and to make the tough decisions necessary in an environment of low oil prices," stated Alberta Finance minister Robin Campbell. "Promoting a skilled labour force is a priority for government and our conclusion was a scholarship approach was still the best option. As for the other accounts being eliminated, the associated spending could be funded through the normal budgeting process and work done to date will still help seed innovative ideas going forward."

The elimination of the AFIE has been met with disappointment in the agriculture and food sectors which viewed the endowment as a long-term mechanism for growing and sustaining the sector while diversifying the economy. It's unclear whether the endowment will be revived if rising oil prices help to re-capitalize the provincial treasury.

R$