Agricultural Producers Association of Saskatchewan’s new estimate for wheat based on Ottawa’s recent tax hike plan
Updated calculations from the Agricultural Producers Association of Saskatchewan suggest the carbon tax could cost $12.52 per acre by 2030.
The estimate, for wheat, is based on the December federal government announcement that the tax would rise to $170 per tonne over the next 10 years.
At $20 per tonne, in 2019, the cost to an average Saskatchewan grain farm was calculated to be $1.74 per acre.
This year, the estimated cost is $2.93 per acre at $40 per tonne.
President Todd Lewis said staff are also calculating the costs for other crops and for livestock producers.
He said these are significant costs that farmers can’t pass on.
“That’s hundreds of millions of dollars in Western Canada that’s going to come straight out of western Canada’s agriculture economy,” Lewis said. “We really need to get some relief and more exemptions put in place for farmers and ranchers.”
Farmers are exempt from paying the tax on fuel used on the farm, but have argued they shouldn’t have to pay other costs, such as that for natural gas or propane used to dry grain.
They also pay the tax on things like heating fuel and electricity, plus indirectly on rail transport and fertilizer.
Lewis said prairie farmers are at a competitive disadvantage as major grain growers who are the farthest away from tidewater.
They have led the move toward low carbon agriculture through direct seeding and range management but haven’t been recognized for that.
“I think everybody needs to do their part, without question, but if you look at other industries that have international trade exposure those exemptions are in place,” he said. “Agriculture is being left out of that. Even within agriculture we see it; a good example would be the 80 percent exemption that greenhouse operators are able to claim on their natural gas costs.”
APAS has written to federal environment minister Jonathan Wilkinson and agriculture minister Marie-Claude Bibeau to state the case on behalf of western farmers. Lewis said lobbying efforts will redouble.
“I think there has been a disconnect between the bureaucracy in Ottawa and what actually is happening on the ground in Western Canada,” Lewis said, adding that those in power need to better understand how agriculture is doing its share and even more than its share.
“We’re producing many more bushels of grain and pounds of meat with a lower and lower carbon footprint and taxes like this, these costs being passed on to producers, really it’s counterintuitive to what they’re trying to accomplish, because if we don’t have money in the pocket we won’t be able to make investments to further lower our carbon footprint,” he said.
APAS is also concerned that adding to farmers’ costs will pose environmental risks. Farmers may have to convert grassland to cropland just to stay viable, which works against the federal goal.
The details of how the estimate was calculated, including assumptions, are available on the APAS website.