Federal budget prompts brokers to follow the food
Romana King
March 5, 2010.
Commercial brokers with clients in the food and agriculture sectors were given a boost in the 2010 Federal Budget with a portion of $1.3 billion in funds going to Canada’s food industry.
While Finance Minister Jim Flaherty’s “stay the course” budget offered little in the way of big tax cuts or major incentives, the budget did create opportunity for the country’s belaboured food industry—an opportunity that will have a big impact on brokers.
“As brokers, we do a lot of business on the direct side—insuring the processing plants” and agricultural entities, explained Ramy Dasuki, commercial account executive at Western Financial Group in High River, AB.
Dasuki explains that any increase in this sector will not only result in more business for the brokers from the primary business clients, but also from secondary businesses that service this sector.
“Meat packing plants generate a ton of [insurance] business,” said Dasuki. “When you start to break down this sector and see all the different companies, independent vendors and service personnel—all of which require commercial insurance or surety bonding of some kind—you begin to see the residual benefit of this” budget announcement.
In fact, governmental decisions can have a serious impact on how well a sector does—and subsequently how well a broker will do. Last year, oil & gas companies were hurt by government changes to royalty fees. “Now, no broker is going after oil patch work,” because the business has dried up, said Dasuki. Before the 2010 budget the agricultural “industry was hurting,” said Dasuki. “Now, with an influx of money there will be new investment, new entrants, and this is all really good stuff for us [brokers].”
Specifically the 2010 Federal Budget offers $1.3 billion in support to a variety of industries including agriculture. That means only a portion of this stimulus money will go to agriculture; other sectors that will receive an economic boost include: forestry, small business, tourism, shipbuilding and culture.
Minister Flaherty also announced that the 2009 economic stimulus in the agriculture sector—which included a $500-million Agricultural Flexibility Fund and the $50-million Slaughter Improvement Program—would be further supported by the creation of a Market Access Secretariat, which would be responsible for the promotion of Canadian agricultural products in foreign markets.
The budget announcement is prompting Dasuki to rethink his client prospecting strategy for 2010. “This might make me focus more on manufacturing and food facilities—knowing that there is more of an initiative [in this sector].”
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