Producers in the four most productive agricultural provinces are paying carbon taxes on natural gas and propane that don’t reflect the realities of their industry. It needs to stop.
Alberta, Saskatchewan, Manitoba and Ontario don’t have working carbon tax programs so they are administered by the federal government. The federal plan has exemptions for fuels used in the field and for some greenhouse production, but when it comes to the direct costs of grain drying and barn heating and indirect costs including electricity and transportation, farmers pay the same rates as everyone else.
The provinces without their own programs could submit plans that meet federal approval and could include schemes that don’t place these tax burdens on farmers. But that might appear to be collaborative with the federal Liberals, so its untenable for provincial leaders.
In the meantime, farmers are paying.
Large emitters in the noted four provinces don’t pay as farmers do in the same locations. Food processors, fertilizer manufacturers, miners, steel and energy producers, are considered emissions-intensive and trade-exposed and are compensated using output-based pricing systems.
In nearly every case, farmers are classed as too small to take part in these federal relief programs. However, the last federal budget mentioned returning some of the taxes paid by farmers in the “backstop” provinces.
A recent and comprehensive brief from the University of Calgary’s School of Public Policy suggested fairness should be applied to farmers when it comes to this taxation program, and that some form of adjustable payment scheme be developed that compensates farmers while encouraging them to adopt alternative technologies that reduce emissions, “to take the form of either lump sum or output-based rebates.”
The brief noted the difficulties with these systems, which are administratively heavy and affected by weather, creating challenges in their application.
Agriculture Canada’s Agricultural Clean Technology Program has about $60 million budgeted for farmer rebates associated with the purchase and development of more efficient grain dryers. But these won’t substantially change energy use or cause Ontario or Manitoba producers to stop growing and subsequently drying corn. Or they might, if corn prices are low enough and carbon taxes high.
No single set of standards on natural gas or propane use can be fairly or practically applied to producers’ use of energy. The technology that would reduce their energy dependence doesn’t exist and a dryer rebate program and $10 million in development grants won’t create it. It’s a global issue.
Farmers didn’t move to reduced tillage and continuous cropping because it was more environmentally sustainable and sequestered more carbon. They do it because it is more farmer-sustainable. They will move to new grain drying and barn heating technologies when they become available at a practical price and make sense for the industry. Fining them for farming in the meantime is wrong.
Either the provinces need to set aside political pride and take responsibility for carbon pricing programs or the feds need to add propane and natural gas to the rest of farm fuels when it comes to taxation. And both government levels need to invest in new technology development.
Once delivered, and it makes sense, farmers will adopt it.
Karen Briere, Bruce Dyck, Barb Glen and Mike Raine collaborate in the writing of Western Producer editorials.
