A Saskatchewan farm group is optimistic that a private member's bill will lead to an exemption from the carbon tax for grain drying and heating on farms, which are dependent on natural gas.
Bill C-206 has passed its second reading and will be reviewed by the Standing Committee on Agriculture and Agri-Food before returning to the House of Commons for its third reading. If the bill passes through the House it will allow for carbon tax grain drying exemptions.聽
The bill was introduced by Northumberland鈥擯eterborough South MP Philip Lawrence and seconded by Provencher MP Ted Falk. It received support from all Conservative, NDP, Bloc Quebecois, and Green Members of Parliament.聽
The Agricultural Producers Association of Saskatchewan (APAS) has supported the passage of Bill-C-206, which would exempt on-farm natural gas and propane use for grain drying and heating from the carbon tax. APAS has been pushing for carbon tax exemptions since the tax was introduced by the federal government.聽
鈥淥ur members have been very concerned about the impact of the federal carbon pricing system on unavoidable energy inputs like fuel to dry grain or heat livestock facilities,鈥� said APAS President Todd Lewis. 鈥淲e have been calling for the federal government to recognize these impacts and provide relief through exemptions, or rebates at the very least. We would like to thank the members of the House of Commons that heard the concerns of producers.鈥�
Cost estimates developed by APAS in 2019 and updated in 2021 showed a $1.04 per acre production cost increase for wheat, rising to $4.44 per acre by 2030.聽
The APAS estimates were calculated using key indirect costs that are not exempt from carbon taxation, such as rail and road transportation, electricity, and grain drying. These costs would be even higher in years like 2019, when most of the grain and oilseed crop required grain drying due to a wet harvest.
鈥淲e have argued for years that producers cannot pass these additional costs along to our customers, and that they further reduce our financial viability,鈥� Lewis said. 鈥淭his additional cost of carbon taxation does not help to solve the problem of carbon emissions.鈥澛�
In December 2020, the federal government announced that the carbon tax will increase to $170 per tonne by 2030. In January, APAS released updated estimates of the impacts the carbon tax will have on agriculture. 聽
鈥淥ur updated numbers show that the cost of producing wheat could go up to over $12.50 per acre in 2030 due to the carbon tax,鈥� said Lewis. 鈥淭his cost increase is carried entirely by farmers and can鈥檛 be passed along to our customers. We鈥檙e looking at a reduction of net farm income by hundreds of millions of dollars in Saskatchewan alone, and the modest rebates provided by the federal government won鈥檛 make up for these losses. It鈥檚 unsustainable for our members.
鈥淭he carbon tax is designed to provide incentives to reduce energy consumption, but these dramatic cost increases will decrease our ability to adopt the new technologies that help us do just that. In some cases, producers will pay for efficiency gains like high-capacity grain hopper cars through their freight rates, and yet those cost savings will go to the railways. Our members expect us to stay on this issue until our concerns are heard.鈥�
Lewis isn鈥檛 only worried about the economic impact of a carbon tax, but APAS has concerns that it will actually cause a negative environmental impact as well.聽
鈥淲hen you add costs to a producer鈥檚 bottom line it creates incentives for them to convert grasslands and other natural carbon sinks into cropland just to remain viable,鈥� he said. 鈥淭hat works directly against the goals of the policy. Agricultural producers have waited decades to see some recognition of our environmental stewardship, and we have seen a lot of lip service, but not much concrete action.鈥�
With the bill passing through its second reading in the House, Lewis sees it not only as a big step for the agriculture community, but a big step in members of parliament gaining a better understanding of grain drying and how impactful the carbon tax will be on it.
鈥淭he C-206 passing (second reading) is good news, especially with the people voting in favour of it being all the opposition parties and even one member of the Liberal caucus did as well,鈥� he said. 鈥淚 think having support from all parties is pretty significant鈥攅ven the Green Party is on our side with it.聽
鈥淥bviously we鈥檝e gained some traction and understanding around how important grain drying is and there really are no alternatives to using propane and natural gas to dry grain. I think that was a real positive and after the bill passed the government has said they鈥檙e going to look at grain drying so there鈥檚 been some movement there as well whether it be with a rebate program or an exemption or whatever they鈥檙e going to come up with. It鈥檚 very positive on both sides and we鈥檝e seen all political parties in Ottawa recognize that it鈥檚 an issue.鈥澛�
Since the introduction of the carbon tax, Lewis and APAS have made lobbying for exemptions a priority and now they鈥檙e beginning to see the hard work come to fruition.
鈥淲e鈥檝e had a long sustained lobby on this and I know we鈥檒l continue to push it every chance we (get to) talk to decision makers,鈥� he said. 鈥淚t goes to show with the passing of C-206鈥攅specially in a minority parliament鈥攈ow important this is to be in touch with all parties down in Ottawa. You never know where support might be needed and it鈥檚 always good to talk to opposition and government members and that鈥檚 something we鈥檝e really strived to do over the years. We want to approach everyone in Ottawa to tell them what we鈥檙e lobbying on and what our concerns are and certainly in a minority parliament it鈥檚 paid some dividends.鈥�
Seeing their efforts pay off has been huge for APAS says Lewis, and it only furthers their drive to continue to ensure there鈥檚 a stronger understanding of agriculture and the negative impact a carbon tax can have on Canada鈥檚 producers.聽
鈥淔armers support the ag groups and certainly our membership has given lots of feedback about Bill C-206 and also another bill about farm transport,鈥� he said. 鈥淭hose are both good examples of long-term lobbying efforts that we鈥檝e been doing for a number of years.聽
鈥淪ometimes it seems like you鈥檙e out there just spinning your wheels, but we鈥檙e finally getting some traction鈥攅specially on the carbon pricing model. It鈥檚 so important to get these exemptions right to start with and we look forward to continuing to tell agricultures story when it comes to things like carbon sequestration and carbon sinks on both pasture land and crop land in Saskatchewan, we鈥檙e world leaders and hopefully we鈥檒l see some traction on that鈥攕ame thing with clean fuel standards. The carbon file is getting to be more and more relevant and of course agriculture is really part of the solution.鈥�
The environmental changes in modern agriculture over the last few decades have been vast and Lewis thinks there鈥檚 starting to become a better grasp by decision makers of just how important these changes have been.
鈥淚 think there is a general understanding now,鈥� he said. 鈥淲e saw last week, members of parliament from coast-to-coast鈥攊t鈥檚 safe to say that two to three years ago they didn鈥檛 even know the grain was dried鈥攙oting on this. There鈥檚 more and more understanding around modern agriculture and what we have done for the environment and there鈥檚 lot of opportunities for recognition of what we do. We鈥檙e always trying to make improvements, nobody is saying that agriculture can鈥檛 improve its carbon management, but at the same time, we鈥檝e been doing it for years and we will continue to with or without carbon pricing.鈥澛�
