Alta. greenhouse growers brace for carbon tax impact

Alberta’s carbon levy, set to go into effect in January, will cost greenhouse growers an estimated $10,000 per acre next year, says the vice-chair of the Alberta Greenhouse Growers Association.

The levy will raise natural gas prices by $1 per gigajoule in the first year and another 50 cents per gigajoule in 2018 under the provincial plan.

Albert Cramer, who operates the eight-acre Big Marble Farms greenhouses near Medicine Hat, said the levy will cost his business about $60,000 in the first year it is imposed. His is one of the largest fresh vegetable operations in the province, and it grows cucumbers and tomatoes year round.

All Alberta greenhouses will face higher natural gas costs, and Cramer fears it will reduce the industry’s competitiveness with the larger greenhouse sectors in British Columbia and Ontario.

“The government doesn’t understand that the greenhouse industry burns a lot of natural gas. That’s our main fuel stock,” said Cramer.

“I think what we’re trying to convince the government is that we also absorb a lot of that same carbon. Yes, we burn a lot of energy, but because we grow vegetables and the way that the greenhouses are designed, we absorb a lot of that carbon, too. We inject it back into the greenhouse.

“The government is taxing us on fuel that we’re also absorbing. If we’re using 50 to 60 percent of our carbon, should we still be paying a carbon tax?”

The levy is one part of the provincial government’s Climate Leadership Plan announced earlier this year. Other strategies are also aimed at reducing the province’s greenhouse gas output and complying with the federal government’s plan to impose cleaner energy measures upon provinces if they don’t develop a plan themselves.

Marked farm fuel will be exempt from the carbon tax, and Cramer said that exemption should be extended to natural gas used in greenhouses.

“We’re farmers. You didn’t exempt us,” he said.

“There should be no carbon tax placed on farmers because farmers grow food. Farmers grow plants. All plants absorb CO2.”

The government has said the carbon levy is designed to encourage all sectors to become more energy efficient.

Cramer said there is room for some greenhouses to improve their efficiency, and the federal-provincial Growing Forward 2 program has funds available to assist.

“The problem is, I could spend all that money and still I’m getting charged a carbon tax. If I spent $100,000 to save $10,000 but you’re still charging me carbon tax on the rest of my gas, it didn’t help anything,” he said.

“But if I spent $100,000 to save $10,000 and you reduced my carbon tax by 40 or 50 percent, now we’re going somewhere, right? We’re going to make those investments.”

British Columbia also has a carbon levy, but 80 percent of it is rebated to farming operations, said Cramer. The Ontario greenhouse industry also seems to be managing with a cap and trade system.

He thinks any carbon tax should be consistent nation-wide so all greenhouse operations are on the same playing field.

Cramer said the association has met with government officials to explain its position. Those meetings have been amicable, he added.

As well, the association has posted a video about the tax on its website and is seeking public support for local food production.

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