Farmers forced to dry their grain with natural gas heating of silos after a wet season are contending with the added costs of the carbon tax on top of other expenses. (Bridget Yard/CBC)

Canadian farmers continued concern about carbon tax

Even before the federal government announced its carbon tax as a measure to reduce greenhouse gas emissions and global warming, farmers were concerned about how it would negatively affect them.

In this first year, farmers in Saskatchewan, Manitoba, Ontario, and New Brunswick were the first to feel the effects. Alberta is paying the tax as of January 1.

Already though farmers are saying its clearly hurting them, especially due to the wet year which necessitates heavy use of energy to dry the grain.

While there are some exemptions and credits for such things as fuel for tractors and farm trucks, farmers say there are many more energy costs involved in farmer that are taxed. They also say the costs accumulate all along the production path, from the cost of fertilizer (produced using natural gas) to shipping of equipment parts, heating for grain drying, transport of grain, higher, and much more adding a little more at each step to a final large cost to their operation.

Farmers, who are in a typically low-margin business, note that they can’t set the prices paid for their crops and are at the mercy of external domestic and international pricing forces, so as their costs rise from both suppliers and energy costs to run the operation, they can’t pass that along to purchasers. A situation that hurts their continued viability.  They also note that as they are particularly vulnerable to weather they are fully aware of climate issues but seem to be unfairly targeted by the tax.

Farmers have been calculating the added costs and been taking to social media about it. Some are angry at the reaction of Federal Agriculture Minister Marie-Claude Bibeau in spite of what they say is clear evidence of the extra costs and how it’s hurting their viability.  At the end of 2019 she said the tax may not be hurting farmers and she needs more information before talking with her cabinet colleagues.

The agriculture industry is not impressed by Agriculture minister Bibeau who says she’s not convinced farmers are hurting because of the carbon tax.(Andrew Vaughan-The Canadian Press)

In response to repeated postings from farmers about drying costs, Bibeau said “I cannot go just on feelings, I have to go with a case built on evidence and this is what I’m building right now, with the collaboration of my provincial colleagues and the collaboration of the industry that is affected.”

An email from her office this week added, “We recognize that this harvest season has been challenging for farmers and we are working with partners to find practical solutions. Our pollution pricing policy exempts many fuels used in the agriculture industry- including gasoline, diesel fuels for on-farm use, and fuels obtained from card lock facilities. The federal system also includes support for small and medium-sized businesses, including farms, which helps farmers make investments to become more energy efficient, saving them money while cutting pollution We have committed to do an early review of our pollution pricing system in 2020 focused on competitiveness issues in trade exposed industries, such as agriculture. We will continue to discuss this issue with colleagues to ensure we further help farmers.”

Both the Saskatchewan Premier, and leader of the opposition have written to Prime Minister Trudeau urging an exemption for farmers drying grain. Premier Scott Moe tweeted an example of one farmer’s bill of almost $5,500 in energy costs for one month.

A Saskatchewan challenge to the federal carbon tax is expected to be heard in the Supreme Court of Canada in March.

Currently the federal carbon tax is $20/tonne, but that will increase to $30 in April, to $40 in 2021 and $50 by 2022.

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