Give us a break.
That’s the message Saskatchewan farmers are sending to Ottawa following a 50 percent increase in the federal carbon tax.
Effective April 1, the federal carbon tax that’s applied to consumption of non-exempt farm fuels in Saskatchewan increased by 50 percent to $30 per tonne of carbon dioxide equivalent, up from $20 per tonne previously.
On the average Saskatchewan grain farm, the $30 per tonne tax will boost a farmer’s average annual crop production costs by an estimated $2.38 per acre above pre-tax 2018 levels, according to the Agricultural Producers Association of Saskatchewan.
Saskatchewan grain farmers can expect to lose eight percent of their total net income in 2020 as a result of the carbon tax, APAS has calculated.
In an April 1 news release, the Western Canadian Wheat Growers Association urged Ottawa to eliminate the carbon tax on agriculture.
“In the midst of a global pandemic, the federal government is using April Fool’s Day to increase the carbon tax from $20 per tonne to $30 per tonne,” WCWGA said.
“At a time when hundreds of thousands of people are being laid off and many businesses are at least temporarily closing, the tax on just about everything is
increasing. Many individuals and businesses are facing financial ruin and yet everything from their groceries to a litre of gas is going to cost more.”
Saskatchewan grain farmer Daryl Fransoo, a WCWGA member from Glaslyn, Sask., said Ottawa’s decision to hike the carbon tax will mean “thousands of extra dollars out of his family’s bank account.”
The tax hike comes at a time when the Canadian economy is already on life support due to the COVID-19 pandemic, he added.
“I just think it’s so foolish right now, with the situation we’re facing, that any government would think about raising taxes,” Fransoo said.
“Agree with the policy or not, it’s just not the time to put that extra burden on our food producers, on our logistics companies or on any Canadian citizen to be quite frank.”
Fransoo said the carbon tax hit prairie farmers particularly hard in 2019. A significant amount of last year’s crop was harvested tough and was dried using non-exempt fuels, such as propane and natural gas to avoid spoilage.
“The added cost of grain drying was obviously a big hit last year but the other thing that we don’t talk about enough is transportation,” Fransoo said.
“Every farm part, every bag of canola, every jug of chemical, everything that’s transported has a carbon tax attached to it, and it all gets passed down to the farmers….”
Susan Ewart, executive director of the Saskatchewan Trucking Association, said the carbon tax increase couldn’t have come at a worse time.
Depending on what products they are hauling and what business sectors they are serving, some Saskatchewan trucking companies are facing a severe reduction in revenues. Others have been forced to lay off drivers until economic conditions normalize.
“It’s just another added cost to our businesses’ operations,” said Ewart.
“It’s an onerous and burdensome task to administer it as well.”
“I think with the economic uncertainty now — not being sure if your business is going to be operating today or in the next three months — adding another layer of tax is not a good thing.”
Ewart said the Canadian Trucking Alliance, which represents provincial trucking associations across Canada, has contacted the federal government proposing a three-month suspension of carbon pricing on diesel.
A suspension would allow the trucking industry, deemed an essential service, to operate with greater certainty during difficult economic times.
“Suspending carbon pricing on diesel for the next three months while we get ourselves through this COVID-19 pandemic is probably the right thing to do,” Ewart said.
“If the federal government is looking to help out small- and medium-sized enterprises across the country, they should look no further than the carbon tax.”