Canada’s farmers pay the price of carbon tax debacle

As I watch what’s been happening in the Senate recently with Bill C234, I become increasingly frustrated with our political system and how Canada’s farmers have become caught in the crossfire of a ridiculous political debate once again. Ridiculous because there should be no debate.

Bill C 234, which would expand the carbon tax exemption on natural gas and propane, should be passed without hesitation. When there are currently no viable or economically feasible alternatives for grain drying and barn heating, producers are doing the very best they can to grow food with the lowest emissions possible. At a grain operation in the dead of a Saskatchewan winter, solar and/or wind power simply aren’t going to work! 

The House of Commons has already passed this legislation and now the Senate is choosing to stall, deliberate and take a break? It begs the question, what is the purpose of our unelected Senate anyway? There are a few Senators I respect, namely Robert Black and Colin Deacon for their work on AGFO’s National Soil Study. But, where is the leadership to get this Bill approved? So much for a sober second thought. It is clearly time for Senate reform. 

I’m disappointed we haven’t heard much from our Agriculture Minister Lawrence MacAulay, himself a dairy farmer, on this issue.  

The cost of the tax

It’s hard to quantify exactly how much carbon tax producers pay since much of it is buried in the costs from suppliers pushed down to the producer. For example, the Agricultural Producers Association of Saskatchewan (APAS) calculates that in 2023 producers are paying over $5 per acre in carbon tax from grain drying, electricity generation and the significant costs pushed down by railways.

Some may argue the carbon tax (currently $65/tonne of CO2) is a drop in the bucket when it comes to all of the other expenses on the farm. But, depending on farm size, it is still significant for some. And, if the government follows through on plans to raise the cost of carbon to $170 per tonne, it would cost farmers close to $1 billion through 2030, according to the latest analysis by the Parliamentary Budget Officer (PBO). It would put carbon tax well over $15 per acre cost to farms. For a government that currently has a keen interest in the cost of food for voters, they seem to turn a blind eye to where food is produced.  Another comical point is that the carbon tax is charged on GST on such bills.

Effect on food prices

What many people don’t realize is the trickle-down effect the carbon tax has at the grocery store and on food prices. First, let’s all agree there are a multitude of different factors that affect the price of food. But, as many Canadian families struggle with the rising cost of feeding their families, especially with holidays approaching, continuing to make farmers pay the carbon tax on natural gas and propane does nothing to make home-grown food any more affordable. In fact, quite the opposite. 

Lack of investment in better technology 

This is what really gets me. When producers pay a carbon tax, that is less money they have to invest in new and more sustainable technologies. I know many producers who want to use the latest in precision ag technology, GPS, sensors, drones, etc. It’s expensive to make these changes on the farm and, in my opinion, we should be helping farmers acquire these new tools, not punishing them with yet another tax. The Agricultural Clean Technology Program, which helps farmers purchase more energy-efficient grain dryers and heating systems is a step in the right direction. But these technologies still have a long way to go in being reliable and efficient.

Dividing the country

I recently attended a luncheon hosted by the Business Council of Alberta where Premier Danielle Smith was the speaker. I enjoyed her take on many business issues, including the carbon tax. You can read her letter to the Senators here.

As she points out, food isn’t a luxury, it’s a necessity. And if the Trudeau government can temporarily pause the carbon tax on home heating oil which saves our friends in Atlantic Canada, why is there even a debate about exempting the fuels that farmers use to grow their crops and raise livestock? 

The carbon tax is a divisive tax that pits rural vs urban, east vs west, and haves vs have-nots. To hear that families are skipping meals and visiting food banks in record numbers is deeply concerning in a country as prosperous as Canada.

Email your province’s Senators and express your concern before November 21 when the Senate will resume. There is an easy way to do this via this form from the Agriculture Carbon Alliance. And, follow along with the Canadian Tax Payers Federation who have been doing a great job of keeping us up to date on the latest political maneuvers.