Canada’s fertilizer retailers need up to $90 million in federal aid if they are to upgrade their security to meet anti-terrorism rules that take effect within four years, a representative told MPs last week.
The alternative is that many retailers will stop selling fertilizer, David MacKay, executive director of the Canadian Association of Agri-Retailers, told MPs on the public security and national security committee of the House of Commons June 19.
Terrorist use of ammonium nitrate as a bomb-making base or criminals stealing anhydrous ammonia to manufacture the addictive drug crystal methamphetamine means retail sites need enhanced security fences, lighting and surveillance cameras, he said.
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But it can cost an average $124,000 per site to upgrade and that is more than most retailers can afford. Once new rules come into effect Jan. 1, 2011, retail sites that do not meet security rules will be unable to receive targeted farm chemicals.
“With manufacturers blackballing non-compliant sites from receiving products with no-ship orders, retail closures will be imminent,” MacKay told MPs. “The entire agricultural chain will be adversely affected with growers and rural communities taking the greatest hit.”
His proposal is that the federal government pick up 75 percent of the cost of upgrading sites. The sector would absorb the remaining $30 million.
He said he presented that proposed cost to Agriculture Canada officials and they were shocked at its size.
“I’m not surprised it came with some degree of sticker shock,” said MacKay. “So we’re going to make sure that we absolutely validate those numbers and be able to present that to the government in the fall.”
When some Conservative members of the committee said they had a problem subsidizing security upgrades at sites owned by large and profitable companies, the industry representative said a lack of government action would favour the large companies.
“To do nothing would be the greatest disadvantage for the little guy because you will guarantee that small independents will close,” said
MacKay. “Farmers will travel hundreds of more miles to get product. The bigger companies potentially will be laughing, so to do nothing to equalize this issue could be a nail in the coffin for rural communities by disadvantaging and closing up retailers and thereby disadvantaging the growers.”
Edmonton Conservative Laurie Hawn noted companies that invest in security receive some benefit from government because it is a tax-deductible expense so they are not out of pocket $124,000.
MacKay agreed but he said the tax deduction is not lucrative enough to entice retailers to make the investment: “Clearly, our members aren’t jumping right now to make these upgrades.”
