Carbon tax a grain-drying mystery

Saskatchewan Premier Scott Moe says the province’s farmers need relief from the carbon tax on escalating grain drying costs.

But the province acknowledges it is difficult to measure those costs.

It has no idea what the average grain farmer is paying in carbon tax on grain drying, said Matthew Glover, media relations officer for the executive council of the Government of Saskatchewan.

“The challenge is that while SaskEnergy calculates the total amount of natural gas they sell to an individual customer, they do not track how much individual pieces of equipment use and therefore cannot provide an estimate of the impact of the carbon tax for one specific use, such as grain drying,” he said in an email.

“The amount of carbon tax paid depends on the size of the dryer, capacity of the drying equipment, type and dampness of the grain and how long or how much fuel is used.”

SaskEnergy estimates it will be collecting and remitting $70 million to Ottawa for the carbon tax on all the natural gas it sells to consumers this year but it has no breakdown on how much of that will come from farmers.

What the government does have is anecdotal evidence of what impact the tax is having.

Moe recently tweeted the natural gas bill for one Saskatchewan farmer showing he paid $5,495.18 in carbon tax in September.

A couple of Moe’s Twitter followers noted that must have been a massive operation because it consumed 133,849 cubic metres of gas that month. By comparison, it takes 2,700 cubic metres to heat an average home for a year.

A number of farm groups are weighing in on the issue.

The Western Canadian Wheat Growers Association has sent a letter to Canada’s federal agriculture and environment ministers lamenting the extra financial burden caused by the tax.

“We get calls every day from irate farmers,” said association president Gunter Jochum.

The association has launched an online petition calling for the end of the tax on farm inputs and energy.

The tax has ranged from 13 to 19 percent of the total energy bill based on three monthly bills that have been forwarded to The Western Producer. That can amount to thousands of dollars in extra costs.

Jochum said there are no viable alternatives to using natural gas or propane for grain drying.

“I haven’t seen a solar powered grain dryer yet,” he said.

The Agricultural Producers Association of Saskatchewan (APAS) is doing its best to quantify this new cost for prairie farmers, but it is proving a difficult task.

Consumers are being charged $0.0391 per cubic metre for the carbon tax on natural gas and $0.031 per litre on propane.

APAS believes the tax will cost the average farm 36 cents per acre in 2019, rising to 89 cents per acre by 2022.

Duane Haave, general manager of APAS, thinks that estimate is going to prove low considering how much grain drying is taking place this year.

“I don’t remember a year where so many people were drying in every part of the province,” he said.

“Other years it might be simpler because it would be one or two crop districts but it’s everywhere. When guys south of Assiniboia are telling me they’re drying their crop, I’m like, what? That has never happened.”

Last year was an unusually busy year for grain drying, according to the Canadian Propane Association. Sales for some propane production facilities were two and a half times higher than normal.

That surge in demand in conjunction with new transportation regulations caused logistical problems getting product to farms, said association president Nathalie St-Pierre.

The association believes propane sales to western Canadian farmers in 2019 could eclipse last year’s levels due to excess harvest rain and snow.

But she doesn’t anticipate the same logistical problems despite the strike at Canadian National Railway.

“In the Prairies it’s mostly pipeline and trucks, so service is continuing,” said St-Pierre.

“It is working. It is going well. Certainly in the Prairies there is no issue at this point.”

Propane accounts for 1.6 percent of Canada’s energy supply and the agriculture sector accounts for seven percent of Canadian propane sales.

St-Pierre said the Canadian Propane Association supports farmers in their call to eliminate the carbon tax on grain drying.

“We believe it’s the way to go to assist the agriculture sector to not depend so much on diesel and gasoline,” she said.

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