Opposition to federal carbon tax becomes increasingly futile

As the COVID-19 pandemic ravages oil markets, driving fuel prices to lows not seen in decades, farmer opposition to the recent increase in federal carbon taxes isn’t gaining much traction in government circles.

In fact, the case against the climate policy is futile.

Gas prices across the country currently sit abut 40 to 50 per cent lower than what they were at this time last year. Demand has flattened as the nation continues to isolate and, by extension, stay in one place.

There are no immediate signs of this changing. Modelling from health experts suggests Canadians can expect to stay isolated for at least a few more months. The OPEC-Russia standoff over oil prices that caused the initial price slump has only just ended, but flooded the world’s markets with supply.

All of this should have made the scheduled April 1 carbon price increase, which adds pennies to a litre of fuel, more palatable for farmers.

It didn’t.

Grower groups say the tax rising from $20 per tonne to $30 per tonne causes uncertainty as farmers, like everyone else, look to the fall.

“We really don’t know what this fall is going to be like. And we have received no word with regard to exemptions for propane and natural gas used for food production,” said Keystone Agricultural Producer President Bill Campbell.

Farmers don’t pay additional carbon fees for fuels used on the farm and are only asked to pay the tax on non-farm fuel use. Of course, applying the tax on propane and natural gas for grain drying became an issue last fall.

But farm lobbyists have so far failed to convince the federal government that further exemptions are needed.

There was some hope among farmers that a supposed review of the policy’s impact on agriculture would result in exemptions; but Agriculture Minister Marie-Claude Bibeau has remained unconvinced.

Bibeau reviewed data from grain farmers and the provinces outlining the additional carbon costs associated with grain drying, and deemed it to be “not that significant.”

If Ottawa was unwilling to offer further exemptions on fuel prices in the midst of the so-called “harvest from hell,” then it will certainly not be seriously considering exemptions now, when fuel prices are lower.

Dubbing the 2019 harvest with such an ominous title gave the federal government more evidence the wet harvest that required so much grain drying was an anomaly, unlikely to be repeated soon and undeserving of any special treatment (or exemptions).

The unprecedented budgetary pressures caused by COVID-19 have overshadowed lobbying or the introduction of legislation aimed at gaining further relief. Efforts to lessen the policy’s impacts on farmers, though admirable, have failed and they will continue to fail.

Now is the time for grower groups and others opposed to the policy to consider whether this is the hill they want to die on.

Already some of the more vocal groups on the carbon policy — such as the Grain Growers of Canada — have turned their focus to mitigating the impact of COVID-19.

These efforts have more potential, especially since the government has listed food as part of Canada’s critical infrastructure.

Calls for improvement to business risk management (BRM) programs are being heard in Ottawa, particularly in Bibeau’s office. Rather than being lost in the noise around the pandemic, the unprecedented risks brought by it provide further support for sound BRM policy.

There are indications from Bibeau’s office, and her provincial counterparts who help fund BRM programs, that tangible changes are coming, likely this summer.

If those programs are improved, farmers unduly affected by carbon pricing will be better positioned to mitigate the damage.

In fact, sound BRM programming might also be of value mitigating the next harvest from hell, global pandemic or rail blockade that hurts farm incomes.

D.C. Fraser is Glacier Farm Media’s Ottawa correspondent. Reach out to him by emailing dfraser@farmmedia.com.

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