Varied carbon policies raise competition fears

Alberta has instituted a carbon levy but exempted farm fuel, while Ontario farmers will have to pay additional fuel costs

A $50 per tonne carbon tax will cost the average prairie farmer about $3,700 a year in higher operating expenses, based on an Agriculture Canada document from earlier this year.

In comparison, a $50 per tonne levy will cost the average eastern Canadian farmer about $2,400 annually, iPolitics reported in June.

iPolitics received the information through an Access to Information request.

The document was a memo to Agriculture Minister Lawrence MacAulay that was prepared by Agriculture Canada staff.

Canadian Federation of Agriculture president Ron Bonnett said there isn’t enough information yet on carbon tax policies to comment on the memo or to know if the numbers are accurate.

“This whole thing has been put together with the federal government setting the mandate and provincial governments (deciding) what they’re going to do,” he said, adding that provincial proposals and policies are inconsistent.

“It’s all over the map, and I think that’s one of the biggest issues we’ve had … is consistency of approach from province to province, which is not there.”

The inconsistencies are hard to miss. For example, the Alberta government, the only prairie province to institute a carbon levy so far, has exempted farm fuels.

Ontario farmers are pushing for a similar exemption, but the province is rejecting the concept.

“There hasn’t been wiggle (on an exemption) at the provincial level,” Bonnett said.

Assuming a $50 per tonne price on carbon emissions, the Agriculture Canada document said the average farmer in Eastern Canada would see the fuel bill go up by $1,500 annually. The average prairie farmer would likely pay $2,300 more in fuel because of the carbon tax.

However, such estimates are meaningless if one province has an exemption for farm fuel and the next one doesn’t. Lacking a consistent national policy, it’s difficult to say what the “average” farmer will pay in carbon taxes.

Even in Alberta, where there is a consistent policy, the government hasn’t released estimates of what a typical producer will pay.

Andrew Leach, associate professor at the Alberta School of Business who chaired the Alberta Climate Leadership Panel and is a major contributor to Alberta’s carbon program, said Alberta hasn’t issued such estimates because there’s too much variability from farm to farm.

Bonnett said the amount of carbon tax would vary from “commodity to commodity.”

For example, greenhouse operators rely on natural gas in the winter, and a carbon tax would increase heating costs. Irrigators, on the other hand, might pay higher rates for electricity.

Keystone Agricultural Producers president Dan Mazier in Manitoba also said it’s difficult to comment on national estimates.

“Since the federal government has left it up to the provinces, on a province-by-province basis, we really don’t know what those numbers mean to Manitoba.”

Like Bonnett, Mazier is more worried about differences in policies within Canada and what that could mean for KAP members.

“That’s a real headache for everybody,” he said.

“We (Manitoba farmers) don’t want to be uncompetitive with Sask-atchewan, never mind about our competitors to the south.”

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