Province fires back at Sask. Ag Producers after concerns raised about crop insurance surplus

The Government of Saskatchewan and the Agricultural Producers Association of Saskatchewan (APAS) were caught in a war of words on Wednesday surrounding the province’s deficit and crop insurance payments.

APAS said it is concerned about the province’s claim that Saskatchewan Crop Insurance Corporation (SCIC) payments “caused the provincial deficit in 2021,” in a news release Wednesday.

“In 2020, Saskatchewan Crop Insurance Corporation reported a $2.4 billion surplus accumulated over previous years, plus a sizable surplus in the reinsurance fund,” APAS vice president Ian Boxall, said. “It’s not fair to blame producers for a provincial deficit in a drought year when that surplus gets used up.”

The comments follow the government’s mid-year fiscal update on Monday, where the province said deficit is higher than was forecast at budget, despite mid-year revenue growth.

Deputy Premier and Finance Minister Donna Harpauer said funding to support producers affected by drought conditions offset the increase in revenue.

“Our government is here to provide support to Saskatchewan people when they need it. Absent the drought, we would have seen a significant improvement from budget and a much lower deficit, based on stronger revenue across all major categories,” Harpauer said in a news release Monday.

The provincial budget will record an additional $1.8 billion in crop insurance claims and $292.5 million in assistance to cattle producers. The crop insurance money came from premiums paid by farmers. APAS said it’s not fair to blame producers for a deficit in a drought year."

“The message that has been told to the people paints producers in a bad light and that’s what we’re trying to educate them on," Boxall said, Wednesday.

Boxall suggested the $2.4 billion SCIC surplus should have been invested into a dedicated fund, so it could have been used to pay out the significant number of crop insurance claims.

Minister of Agriculture David Marit and Harpaur responded to APAS’ claims in a letter addressed to president Todd Lewis on Wednesday afternoon, calling the suggestion that the province blamed producers for the deficit “false” and “offensive.”

“The comments provided by Vice-President Ian Boxall suggest that perhaps he is unfamiliar with the concept of summary financial reporting, a budgeting standard that the province adopted in 2014,” the letter from the government reads.

The letter goes on to say that when money held in surplus by province-run organizations is used, it has to be publicly reported.

“In fact, it only serves as a reminder that the premiums paid by producers are, in fact, being well managed by the insurance fund when surpluses are in place to cash-flow devastating years such as the one that producers in this province just experienced,” the letter continues.

The province urged APAS to retract their statement.

“It is disappointing, to say the least, that an organization such as APAS would, through either ignorance or deceit, willingly misinform its members with such callous disregard,” the letter reads. “It is somewhat disappointing that APAS has such limited comprehension of public financial reporting and doesn’t understand the difference between debt and deficit.”

The government said it hopes APAS doesn’t take provincial support for granted the next time it considers making a  statement. APAS feels the government should give more thought to their comments as well. 

With files from CTV News Regina's Wayne Mantyka

APAS Letter Dec 1, 2021 by Saskatchewan Web