Carbon tax: A bitter pill for farmers

What’s happening outside of B.C.?


From his west coast vantage point, Stan Vander Waal isn’t sure that carbon taxes do what proponents say: change behaviour to reduce greenhouse gas emissions.

The chair of the British Columbia Agriculture Council and owner of Chilliwack-based Rainbow Greenhouses has had nine years to observe the tax in practice.

He said his operation was already using the latest technology to reduce fuel costs when the tax was imposed July 1, 2008.

“On the greenhouse side, the perception was that we would burn less fuel,” Vander Waal said. “That’s one our highest input costs.”

But he had already installed innovations such as curtain and shade systems and double-walled panels to reduce that cost.

“There just isn’t anything that would support that next level of efficiency,” he said.

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Ottawa has said that carbon plans will be mandatory nationwide in 2018. Provinces are expected to design their own systems or the federal government will impose one. It can be a cap-and-trade system or a carbon tax.

In B.C., the initial tax was $10 per tonne of carbon dioxide equivalent on heating and transport fuel, rising to $30 per tonne, where it has been since 2012.

The idea is that a tax will cause people to gradually reduce fuel use and adjust their habits.

It is also supposed to be revenue-neutral, so all money taken in from the tax is returned through personal and corporate income tax breaks.

A Fraser Institute study earlier this year, however, said the tax ceased to be revenue neutral five years ago as the government moved to more targeted tax cuts, away from broad-based cuts that would spur economic growth.

Farmers have long opposed a carbon tax, arguing that with it, they can’t compete against producers in jurisdictions without a similar tax.

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The B.C. greenhouse sector was successful in obtaining a permanent 80 percent rebate on natural gas but others weren’t so lucky.

“A chicken farmer using natural gas is not getting a rebate,” Vander Waal said.

The government also later exempted farmers from paying the carbon tax on coloured gasoline and diesel used on their farms.

Vander Waal said that helps only a little because hauling crops to storage, delivering feed and trucking livestock to market are not exempt.

“All these add on layer after layer after layer of carbon tax,” he said.

The average farmer is paying about $1,000 per year in carbon tax, so no one is likely to go broke over it, he added, but it cuts into the money that farmers have available to reinvest and make their businesses more efficient.

The Pacific Institute for Climate Solutions, which is funded by the B.C. government, released a study in 2014 that found no evidence agricultural exemptions were needed. It noted there was no change in agricultural trade after the tax was imposed.

The study also said that fossil fuels represent on average only four percent of production costs. A carbon tax, therefore, adds only a small cost. It added that farmers may have changed practices to become more energy efficient.

Farmers across Canada could argue that’s exactly the point. In many cases they have taken measures to minimize their carbon footprint through better management practices that use less fuel and sequester carbon.

Yet, they will be paying the carbon tax all along the way without any ability to recover it.

In Alberta, the $20-per-tonne carbon tax implemented Jan. 1, 2017, applies to heating and transportation fuel but exempts farm fuels. The tax rises to $30 in 2018.

The tax is returned to some low-income residents through a rebate, but most of the money goes toward programs for renewable energy and energy efficiency.

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Ontario and Quebec both decided to use a cap-and-trade system rather than a carbon tax. This system caps emissions but allows flexibility in how that cap can be met.

Emitters who exceed their caps can buy credits from others with surplus credits.

The Ontario Federation of Agriculture was initially supportive of this type of system but now says it isn’t working. Fuel costs have risen with no way for farmers to offset them; they aren’t exempt under the cap and trade program.

The remaining provinces, except Saskatchewan, are still working on their plans.

Saskatchewan maintains it will not impose a tax that will hurt its agricultural sector.

If that is the case, then Saskatchewan farmers can likely look forward to a system similar to Alberta’s, according to federal Environment Minister Catherine 
McKenna’s announcement earlier this year.

It will start with a $10-per-tonne tax on fossil fuels and ramp up to $50 per tonne by 2022. The federal government is accepting comments on the proposed plan until June 30 at carbonpricing-tarificationcarbone@canada.ca.

Back in B.C., Vander Waal said he believes all governments would have been better off setting emissions standards rather than taxing inputs.

“The general perception is that most people are just not being more efficient. I think that’s nonsense,” he said. “Any business is always trying to reduce costs.”

He said public perception drove the need for a carbon tax but few city dwellers realize what was already being done in agricultural sectors.

“A carbon tax doesn’t drive efficiency,” Vander Waal said. “Governments should really learn what’s going on on the farm. There’s little knowledge of what’s really being done.”

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  • old grouchy

    I agree with the sentiments expressed by Vander Waal. Only problem – – – – that person that supposedly is our PM has to have the right optics around him. He needs to be seen as doing something. He thinks a tax is going to do something wonderful – – – well – – – it does – – – it gives the feds more money and he can claim that he is getting something done. Sort of like the farmer with a goat – – – – finally trained her to not waste anything – – – – dog gone if she didn’t die a couple days later. It is absolutely impossible to be 100% efficient (even the pm sleeps occasionally so then his bs efficiency slips). This is NOT about reducing carbon output – – – this is all about revenue generation for the feds.

    • Harold

      It is more than a fed revenue generation; it is the transfer of taxpayers wealth to Paris ($Billions) also the transfer of wealth to the “green” wealthy elite also taking the power of money out of the hands of the Canadian Citizen’s through taxation. The power of money in the hands of the citizens gives unlimited choices and those choices can bankrupt any corporation. Without money we are dependent upon government instead and the government’s choices become arbitrarily ours through legislation, and as we are seeing, we are in servitude to the government and not rightfully the other way around. Our government led education systems have built within us our apathy shown towards the government as well as teacher-manual led student indoctrination into a man-made sole cause of global climate change. (no other cause)
      The creation of the climate change religion and subsequent local and global taxation (Paris) and public indoctrination was started in 1968. They have been so successful in their methods that the public by in large have within them no reasons to deny their doctrine. So successful that “climate deniers” are seen in the same light as a “god denier” instead of truthfully a conversation seeker.
      Anyone of knowledge can educate the conversation seeker but unfortunately the “believer” hasn’t the knowledge, yet they believe nonetheless, and therefore the talking points are left to the creator of the doctrine. The conversation seekers are denied access to the creator of the doctrine and therefore the case is closed. Science does not operate in any such way and is evidence in its self that climate science has been hijacked and politicized and made taxable. If I were to give you the details of 1968 “think tank” conspiracy, the WP would “kindly” delete it from the talking points, however, this does not stop anyone from performing their own personal examination.
      Your gut and intelligence are telling you that there is something wrong between the tax and the political dialogue, so go with your gut and investigate. You will find that upon listening to the questions of the so called “denier” (31,000 scientists – 9000 PHD) that soon after those questions will become your own because the dogma you/we have learned did not have the answers and neither do the creators of the dogma. Furthermore, undeniably sitting in the face of all is the fact that this local and global taxation and wealth transfer is 100% dependent on finding “a man made cause” and therefore creating the elimination of all other known and contributing natural causes; It is a alarm bell for those who have any ears.
      What monkeeworks has said is true. The amount of carbon added into the atmosphere the last decade is so close to zero that its measurement cannot even be considered when compared to the last 100 years wherein climate cooled and then warmed again. The details can be heard directly from the scientists; unlike the illusionary 97% that have never been confirmed to anyone or any “believer”. (they are in fact only 2%) What is 97% of 100 or 200; the illusion of thousands? How great a number is the remaining 3%. Can any “believer” know or even guess? There is a reason why the “believers” are told 97% repeatedly instead of the actual numbers and names. In contrast there are 31,474 (9,000 PHD) signature proven scientists that are in opposition and they represent 97% of what number; are those remaining three percent the ones that the public are led to believe?

  • Monkeeworks

    Yet, there is not a single bit of proof carbon is causing global warming. In fact all the proof shows carbon follows temperature changes as found in the Greenland ice core samples. Don’t forget, carbon heat absorption is logarithmic and the most absorption is finished in the first 20 ppm. Today, at over 400 ppm we can not measure the temperature increase from increased carbon in the atmosphere as it is so small an amount.