Canadian agriculture has lined up against the carbon tax Ottawa announced would take effect in four provinces next April, saying it will make the sector uncompetitive.
Organizations denounced the tax imposed in Saskatchewan, Manitoba, Ontario and New Brunswick after those provinces failed to implement a carbon pricing plan that suited the federal government.
The $20-per-tonne tax will cost about 4.4 cents per litre at the gas pumps and be applied on natural gas, propane and electricity production.
Although on-farm fuel use will be exempt, as it is in provinces that already have a carbon plan, farmers say they will have to pay the tax throughout the production system without any way to capture any of the money back. For example, the natural gas used in fertilizer production will be taxed and railways will face the tax on fuel.
“The carbon price will add costs to farm inputs and to transporting our grains to market, making it more expensive to be a grain farmer in Canada compared to our key competitors around the world,” said Grain Growers of Canada president Jeff Nielsen.
The program offers relief for greenhouse growers who use propane and natural gas, and grain growers want the same exemption.
The Canadian Federation of Agriculture also said the two fuels should qualify for the farm fuel exemption, and that both heating and cooling of agricultural buildings for greenhouse, vegetable and ornamental production should be added.
Farmers argue they are part of the climate change solution through the amount of carbon they sequester by using new technology.
GGC says canola growers have used biotechnology to reduce carbon dioxide emissions by one billion kilograms, the equivalent of taking 500,000 cars off the road.
“Climate change has to be addressed but a carbon tax isn’t the way to do it,” said Grain Farmers of Ontario chair Markus Haerle.
Saskatchewan and Ontario premiers Scott Moe and Doug Ford, respectively, said they remain committed to fighting the tax.
Moe called the federal plan a “sham” and accused the federal Liberals of using it to buy votes by offering incentive payments larger than the tax people will pay.
In Saskatchewan, the average household will pay $403 in tax in 2019 but can expect a rebate of about $600. In Manitoba, the cost will be $232 and the rebate $336.
Both costs and rebates will increase as the carbon tax rises to $50 by 2022.
Residents of rural and small communities also receive a 10 percent top-up to reflect increased energy costs and limited transportation options.
A report from Canadians for Affordable Energy said that Saskatchewan will be hit harder than the other provinces because 80 percent of homes are heated with natural gas. The report said the carbon tax would increase natural gas costs by 31 percent by 2022, while electricity goes up 19 percent and gasoline by 10 percent.
Todd Lewis, president of the Agricultural Producers Association of Saskatchewan, said board members would meet with federal officials and opposition members this week to discuss the impacts of the tax.
No one knows exactly what the costs will be but it’s clear farmers will be hurt by extra expenses, he said.
“Everything in rural Saskatchewan is trucked in or trucked out,” Lewis said.
On the livestock side, the Saskatchewan Stock Growers Association said it is unconvinced that this policy would result in any meaningful reduction of greenhouse gas emissions.
The federal government said it expects greenhouse gas emissions to drop by 50 to 60 million tonnes by 2022 as a result of the plan.
The plan also includes an output-based pricing system that will affect large industrial emitters.
Ottawa expects to collect more than $2.3 billion in the four provinces and return 90 percent to households. The other 10 percent will go to small- and medium-sized businesses.
Meanwhile, CFA said it intends to work with all governments on new programs to address gaps. President Ron Bonnett said farmers experience climate change effects first-hand and must be at the table to develop policies and programs.
He said new pricing systems should come with investments. Canadian farmers are already among the world’s best in sustainability, he said, and research and support are critical.