March 15, 2004

Canada Cattle Industry Gets $500 Million Boost

The ailing Canadian cattle industry will receive a $500 million cash injection to help it survive until exports to the United States can resume. The announcement is set to be made in the March 23 budget.

The money will go directly to those most hurt in the crisis, and will come out of the existing surplus of this fiscal year, which ends on March 31, federal sources said.

The amount will be more than $500 million and could be as high as $1 billion, making it probably the biggest single new spending item in the budget.

And unlike most agricultural aid packages, this one will not require the participation of the provinces.

"It will be totally unprecedented to have a budget with agriculture as such a high priority," a federal source said.

There are still several hitches to be worked out on how to deliver the budget money and make sure all of it can be taken out of the existing fiscal year without running into accounting difficulties, the sources said

The U.S. border was closed to Canadian beef last May after a case of mad cow disease, or bovine spongiform encephalopathy, was found on an Alberta farm. Trade resumed for some beef exports last fall, and Ottawa hoped all the restrictions would be lifted early this year.

But the discovery in late December that a cow in the state of Washington that had tested positive for BSE originated from Alberta put an indefinite delay on cross-border cattle shipments.

Prime Minister Paul Martin has earlier said that easing the mad cow crisis was a top priority for him.